Under Armour is a well-known brand in the clothing domain. It has spread its wings in many countries and is quite popular for reaching consumers with great responses. In this article, you will see Under Armour SWOT analysis for the year 2023. First, we can see a brief overview of the company and later move to the SWOT analysis.
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Brief Overview Of Under Armour
Under Armour was founded by Kevin Plank in 1996. The company is based out of America. Keving was a football player who did not like his cotton clothing getting heavy with sweat. This inspired him to create an alternative fabric that would absorb the moisture and keep the clothing light and dry.
Kevin started Under Armour out of the basement of his grandmother’s house in Washington D.C. and began selling his new shirts to college football teams and other athletes. The company quickly gained a following and expanded its product line to include other types of athletic apparel and accessories.
From these humble beginnings, Under Armour has come a long way. It is now a global brand with a presence in almost 100+ countries. It is selling a wide range of sportswear, footwear, and accessories for athletes of all levels.
Products Offered By Under Armour
- Athletic Shoes
- T-shirts
- Jackets
- Hoodies
- Pants
- Leggings
- Shorts
- Athletic bras
- Athletic bags
- Face masks
- Bags
- American football, basketball, and soccer uniforms, among other sports.
Kevin Plank | |
Washington, D.C., United States | |
17,000+ | |
US$5.683 billion | |
Under Armour |
Under Armour SWOT Analysis
Having a brief overview of Under Armour, we can now see the SWOT analysis for it. I will explain everything in pointers with a brief description related to it.
Strengths Of Under Armour
Remarkable Brand Image
Under Armour has built a strong brand image over the years, which is synonymous with quality and innovation. Whenever people think of buying athletic or active wear, Under Armour is always one of their choices to look for. This brand value has got stronger over the years and has helped the company position itself as a strong leader in the clothing line. It is an achievement for Under Armour to be called out in the same list of companies as Puma or Nike.
Diversified Product Range
Many companies put effort into and succeed in one or two product ranges. However, Under Armour offers a wide range of products, including clothing, footwear, and accessories, which appeal to a diverse range of customers. This is one major strength that has helped Under Armour acquire a large chunk of the market all to itself. Not many clothing line companies expanded into footwear and accessories. This is surely an addition to the brand’s offering for its consumers.
Global Presence
Under Armour has a diversified geographical presence, with a strong presence in North America and expanding into new markets in Asia and Europe. As of 2023, you can see around 100+ countries selling Under Armour products. This is quite amazing and remarkable in the sense that many other companies are still not able to expand at this scale.
Strong Distribution Network
Under Armour has a strong distribution network, including its own retail stores, as well as partnerships with major retailers such as Dick’s Sporting Goods and Foot Locker. Such a complex distribution network is handled with ease by the company. This is one major strength that is quite underrated. Around 60% of sales for the year 2022 were done through the wholesale network. The rest around 38% was a direct-to-consumer selling network. The remaining 2% was due to licensing.
Strategic Partnerships
By collaborating with numerous renowned athletes, teams, and organizations, Under Armour enhances its brand visibility and credibility, leveraging these partnerships to elevate its presence in the market.
You can find sponsorship partnerships in sports like golf, auto racing, football, Judo, Gymnastics, Ice Hocket, Olympic Teams, and much more. All this strengthens the brand from its core and establishes trust among the customers.
Investment In Digital Apps
Under Armour has embraced digital transformation by incorporating applications like MapMyFitness, MyFitnessPal (a calorie and nutrition app), and Endomondo (a fitness app maker). This strategic move has not only boosted its revenue potential but also enabled the company to diversify its resources and further unlock its transformative capabilities within the industry.
Weaknesses Of Under Armour
Heavy Reliance on North American Market
Yes, Under Armour is present in almost 100+ countries. However, if you look at the stats, the majority of the business comes from the North American market. This becomes a weakness for Under Armour in certain circumstances. If the North American market fluctuates, it can impact largely the sales and network of Under Armour. Any economic slowdown or policy changes in the North American market can hamper the profit margins to a large extent. As of 2023, around 80% of revenue is generated from the North American market alone.
Slow E-Commerce Adaptation
Online selling of products is quite common in the current era. There is a famous saying that if your business is not online, it won’t sustain itself in the long run. As compared to its competitors like Nike and Puma, Under Armour expanded into e-commerce selling quite late. This has been a weak point for Under Armour. The company focused mainly on in-store selling for its consumers. However, now Under Armour is expanding into e-commerce selling as well.
Federal Probe Resulting In Negative Brand Image
In November 2019, the U.S. Securities and Exchange Commission made public that Under Armour’s accounting policies had been under scrutiny for more than two years. In July 2020, the company confirmed that the U.S. Securities and Exchange Commission had sent Wells Notices relating to Under Armour’s accounting in 2015 and 2016. This federal probe has resulted in a negative brand image. Overall this news has created a negative impact in the minds of the consumers of the brand.
Heavy Dependence On Athletic Sponsorships
Under Armour heavily relies on athlete endorsements as a key component of its marketing strategy. While this approach can be expensive, it does not always guarantee a positive return on investment. Moreover, any incident related to the athlete directly impacts the brand image.
Opportunities For Under Armour
Diversify Revenue Sources From New Countries
As I mentioned that around 80% of the revenue for Under Armour comes from the North American market. Although this helps the company sustain its operations, it also puts the company in a vulnerable position. Relying on one market for your major revenue source can be a liability under certain circumstances. Under Armour has the opportunity to expand in the Asian market where buying capacity is increasing and you have a greater population to sell your products.
Use Of Innovative Technology
The current era is of fitness applications. You can find tons of fitness applications that help you calculate your calories, heart rate, and many other metrics. Under Armour acquired MapMyFitness, MyFitnessPal and even Endomondo. This creates a great opportunity for Under Armour as these fitness applications provide data on fitness, nutrition, and users related to athletic and fitness routines. The company is planning to use this data and technology to expand into the Asian and the Europe market.
Expand Into the Women’s Market
Under Armour has a significant growth opportunity by targeting and expanding its presence in the women’s athletic apparel market. By capturing a larger share of this market segment, the company can tap into the growing demand for women’s sportswear, thereby boosting its revenue and market position. With effective marketing strategies and product offerings tailored to the preferences and needs of female consumers, Under Armour can capitalize on this opportunity and solidify its position as a leading brand in the women’s athletic apparel industry.
Threats To Under Armour
Intense Competition
Any company has its own share of competitors. For Under Armour, this story is no different. It faces strong competition from brands like Nike, Adidas, Puma, and many more. Although Under Armour has its own position in the market, these brands still lead the market and the consumers do prefer other brands as well under many circumstances. Moreover, the brands I mentioned are doing better business in the Asian and Europe market as compared to Under Armour.
Product Flammability Reports
The products offered by Under Armour are top-notch. However, there is always a scope for improvement. There have been reports that the United States Forest Service found that Under Armour’s material was more likely to result in a burn injury of the wearer than most other undergarment materials.
Competitors Performing Better in Asian And Europe Markets
The competitors of Under Armour are performing better in the Asian and the Europe market. As Under Armour is quite well-received in the North American market, it still lacks a decent presence in Asian and European countries. This is a major threat for Under Armour as its competitors have expanded well in these markets. Under Armour is yet to match the numbers for these markets.
Some Negative Product Reviews
Experts have criticized Under Armour’s chin straps and athletic cups, raising concerns about the potential for athletic injuries caused by these products. If these concerns prove valid and result in actual injuries, it could significantly harm the brand’s reputation and deter athlete endorsements. Ensuring the safety and quality of its sports equipment is crucial for Under Armour to maintain its credibility and protect its market position. Addressing these concerns promptly and effectively is essential to mitigate potential damage to the brand’s reputation and maintain trust among athletes and consumers.
Bottom Line
Like every company, Under Armour, has faced various challenges in recent years, including accounting controversies, executive turnover, and increased competition. Apart from this, Under Armour has major strengths too due to which revenue growth in the last few quarters has been positive. Under Armour has also been investing in sustainability initiatives and social responsibility, which could improve its brand image and appeal to conscious consumers. In summary, Under Armour’s future success will depend on its ability to maintain strong brand identity, effectively compete in the sports apparel market, and adapt to changing consumer trends and preferences.