Competitive Edge: Under Armour
Under Armour is an American sporting goods manufacturer that supplies athletic and casual apparel and footwear (Tighe, 2021). Under Armour’s mission is to make all athletes better through passion, design and the relentless pursuit of innovation (Under Armour, n.d.). Under Armour was created in 1996 and has its headquarters in Baltimore, Maryland (Tighe, 2021). Under Armour has 15,000 retail stores around the world (Under Armour, n.d.). They have employed over 16,500 employees at offices and retail locations around the world (Tighe, 2021). In 2020 $4.5 Billion (USD) dollars of revenue (Tighe, 2021).
Competitors’ Profile
Nike Inc. is a sportswear and equipment supplier and has become the world leader in athletic footwear and apparel (Tighe, 2021). Nike’s mission is to do everything possible to expand human potential; by creating groundbreaking sport innovations, by making their products more sustainably, by building a creative and diverse global team and by making a positive impact in communities where they live and work (Nike, n.d.). This year marks 50 years since the creation of Nike ; whose original vision was to create the best running shoes in the world in 1964 (Nike, n.d.). Nike’s headquarters are located in Beaverton, Oregon and includes the Nike, Converse and Jordan brands of products (Nike, n.d.). Nike has also acquired several brands including Cole Haan, Bauer Hockey, Hurley, Starter and Umbro (Tighe, 2021). Nike currently has 1,048 retail stores and 73,300 employees around the world (Tighe, 2022). In 2021 Nike’s revenue was over $44 Billion (USD) dollars (Tighe, 2022).
Adidas is a sporting goods manufacturer in Europe and is second to Nike in the world for athletic footwear and apparel (Tighe, 2022). Adidas’ mission is to be the best sports brand in the world. Everyday, they come to work to create and sell the best sports products in the world, and to offer the best service and consumer experience — and to do it all in a sustainable way (Adidas, n.d.). Adidas was created in 1949 with the belief that through sports, we have the power to change lives; sports keep us fit, mindful, bring us together and allow athletes to inspire and help us to get up and moving (Adidas, n.d.). Adidas’ headquarters are located in Herzongenaurach, Germany and also owns a schare of the German football club Bayern Munich (Tighe, 2022). Adidas currently has 2,184 stores and over 61,000 employees around the world (Tighe, 2022). In 2021 Adidas’ revenue was over $21 Billion (EUR) dollars (Tighe, 2022).
Reebok is an American- inspired sports brand with the clear objective to become the leading fitness brand in the world (Sabanoglu, 2021). Reebok’s mission is to provide consumers with innovative products, experiences and inspirations (Sabanoglu, 2021). Reebok is a subsidiary of Adidas (Sabanoglu, 2021). Reebok’s history began in 1890 when a shoemaker named J.W. Foster developed the first known running shoes with spikes, enabling athletes to run faster than ever before (Sabanoglu, 2021). In 1958, Foster’s grandsons, formed Reebok in England to carry on the family tradition of making athletic footwear (Zippia, n.d.). Reebok has 233 stores and 5,000 employees world wide (Tighe, 2022). In 2020 Adidas’ revenue was $1,409 Million (EUR) dollars (Sabanoglu, 2021).
Puma is a multinational sports apparel company that is engaged in the design and manufacturer of both casual and athletic footwear, apparel, and accessories (Tighe, 2022). Puma’s mission is forever faster; they aim high, and when we score our goals, we aim even higher. All to achieve one thing: to be the Fastest Sports Brand in the World (Puma, n.d.). Puma was created in 1948 and is headquartered in Herzogenaurauch, Germany (Tighe, 2022). Puma has 832 stores located around the world (Films Division, n.d.). Puma as 16, 100 employees around the world and in 2021 created a revenue of $3.26 Billion (EUR) dollars (Tighe, 2022).
Product / Service Comparison
Under Armour, Nike, Adidas, Reebok and Puma all sell athletic and casual footwear, apparel and accessories. Each brand also sponsors professional sporting leagues and or teams, while also signing some of the world’s top athletes to be brand ambassadors for their companies. All of these companies have products that range from affordable to more expensive, which allows anyone the opportunity to purchase their products.
Both Nike and Under Armour use collaborations with some of their athlete brand ambassadors in order to increase their market share:
- Nike = Kobe and Jordan
- Under Armour = Steph Curry
Both Under Armour, Adidas,Puma and Reebok have collaborations with other celebrities to create products. Under Armour has the Project Rock Collection which contains footwear, apparel and accessories designed by Dwayne “the Rock” Johnson. Adidas has the Ivy Park Collection which contains footwear, apparel and accessories that are designed for Beyonce and Yeezy which is a partnership with Kayne West. Reebok has a collaboration with Cardi B that contains apparel and footwear. Puma has a partnership with Dua Lipa for a limited collection of footwear and apparel.
Under Armour and Nike are the only top sporting goods companies that have origins in the United States. While Adidas, Puma and Reebok all have origins in Europe.
Although Under Armour is younger than all of the other sporting goods stores, they have also differentiated themselves by not starting the company with footwear as the original product. Under Armour started with a T-shirt that provides compression and took the perspiration off of your skin rather than absorb it (Tighe, 2021). Under Armour is the creator of performance apparel that is designed to keep athletes cool, dry and light throughout the course of a game, practice or workout (Tighe, 2021). Under Armour makes a majority of their revenue through their apparel rather than footwear like the other top brands. Due to their specialty being performance wear they have had the ability to become a permanent fixture for many of the professional sporting events (Tighe, 2021).
Market Niche and Share
Under Armour has become the fourth highest owner of market share in the niche of athletic apparel, accessories and footwear globally (Tighe, 2021). They differ from their competition as their success isn’t attributed to footwear but instead attributed to its innovative use of fabric technologies, eco-friendly operations and high brand recognition, from both professional athletes and local communities (Tighe, 2021). The Under Armour Logo is a permanent fixture at many of the professional sporting events from football and boxing to snowboarding and gymnastics (Tighe, 2021). Under Armour provides sporting equipment for collegiate sporting events, which helps to increase knowledge of Under Armour and increase the number of potential consumers (Tighe, 2021). Purchases can occur through their website, their brand stores, as well as through sporting good store partners (eg. Sport Chek). They also offer discounts to military and first responder personnel, with special days that they get a larger discount for purchases in store and on their website. They offer products that range from affordable to more expensive which allows people from all classes to purchase their products.
Nike is the leader in market share, closely followed by Adidas with Under Armour following in fourth and Reebok and Puma trailing behind. This is likely to continue to be how the different brands are separated in the market with there being some increases as some of the smaller brands have potential decreases in their market share with location being a big determinant of who holds the market share in certain areas of the world.
Comparison of Strengths and Weaknesses
Under Armour’s strength is their fabric technologies and the performance wear they create. By creating their performance apparel they raised the bar in the sporting world for what athletes want to wear while they are competing, practicing or training by providing a product that allowed the athlete to be comfortable and not worried about being in soaking wet clothing, being cold or too hot to perform. A weakness for Under Armour could be that they are playing catch up in the footwear market share, as this is not their specialty they are still creating revolutionary footwear but not many individuals think of Under Armour first when it comes to running, training and sporting specific footwear.
Nike, Adidas, Reebok and Puma’s strengths are their footwear, they all created a name for themselves in the sporting goods industry based on this and then followed it up with apparel and accessories. Nike has increased it’s name by its partnerships with some of the biggest names in the NBA with both Michael Jordan and Kobe Bryant. Adidas and Puma are both based in Europe and have made a bigger names for themselves with the cleats they created for Football (Soccer in North America). Whereas Reebok created its name by creating spikes for runners that helped some Olympic athletes to compete in the early years. Their weaknesses are that they are playing catch up in the apparel market share as they are following Under Armour in the creation of performance apparel.
Under Armour and Nike have the strength that they are located in North America where there are multiple professional sporting leagues that have viewers from around the world, which increases their potential of creating a larger percentage of potential consumers.
Adidas and Puma have the strength that they have the professional Football leagues, which also gives them the market share that comes with Football (Soccer). These are the brands that sponsor professional and world teams so become known as Football brands to players and viewers around the world.
Reebok has the strength that it is a brand for Adidas and therefore falls under their market share but also allows individuals to purchase their products for a more reasonable price.
In North America, Reebok and Puma have a bit of a weakness as they are not leaders in the footwear industry. Puma is a bit of a more expensive brand so isn’t readily available for people of all classes.
References:
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