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Under Armour And The Sports Apparel And Footwear Industry In 2008 Harvard Case Study Solution

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Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution & Analysis


Introduction

Historically, the business's core consumers consist of the Original Equipment Manufacturers (OEMs), which used to sell Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help items withtheir own brand name. Its consumer circle consists of Original Devices Manufacturers (OEMs), who utilized to offer Enterprise items with their own brand name. He repositioned Org as a global brand name and informed his divisional supervisors to comprehend marketing and its significance.

Issue Statement

Corp's shift from a product based to a marketing company is not going as efficiently as planned.Overcoming the hesitation of divisional managers to include marketing effectively is still a significant obstacle. Creating a constant brand name identity across the entire world and employing marketing techniques that best fits the local culture is no easy job.
Executive Summary
Situational Analysis

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help efforts for constructing its brand name throughout the world was begun after introducing the "brand-new management effort" by Chairman Lee in 1993. The goal was to transform Organization from an inexpensive OEM to a high value-added item provider. To make the vision of Venture a truth, Chairman Lee designated Yun as a vice chairman in 1997. Yun had a quite clear photo in his mind about how Business can change from a low end to a high end item provider. He knew that change can only be done through positioning Corp as a business using high-end items and this could only be done through high level of marketing.

In spite of having a clear vision about how to build Enterprise brand, with a prospective support of its executives, Yun faced several marketing obstacles in early years of its efforts.

Among the marketing obstacles for Yun was the understandings of executives about the value of marketing. They considered marketing and selling as same tools and believed that quality products do not required marketing for increasing sales. As their focus towards marketing was rather low in their previous organisation practices, and the existing marketing requirement was excessive high, the gap was too broader and to fill this space with wrong understandings about marketing was quite difficult for Yun.

Along with it the product variety of the business was increasing with the ripening of new item ideas by the R&D sector of Org. Yun had a challenge to perform marketing preparation and to produce marketing budgets for existing as well as for new items from the very start, and this would take a big time.

A big shift would be required in existing marketing expenses to build the Org brand. This would result in increased marketing expenses for Org and might interrupt the administration relating to increased costs, as they were reluctant to marketing expenses formerly and an unexpected huge shiftwould make them interrupt.

Internal Analysis
SWOT Analysis
Strengths


Company strengths depend on its huge product portfolio. Enterprise has biggest variety of patents in the industry with overall number of 15499 patents approved in United States( USP). Big amount of R&D costs has made it possible for the business to grow its product portfolio at a greater rate than its competitors. Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its total incomes.

Another strength of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution is its capability to establish ingenious items at a constant rate. It significant proves for the development and product creating of Enterprise is that the business has gotten numerous awards for its innovation and item design.

Unlike Apple and other competitors, Business is focused on producing gadgets which can be quickly incorporated with any type of open source Operating System (OS) and software application. This supplies Company an edge over Apple gadgets.
Porter's 5 Forces Analysis
Company's ability to produce luxury items at low expense of production is likewise one of the major strength of Enterprise as it makes it possible for the business to record more market by supplying quality products with expense control.

Weak points

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis weak points are hidden in the company's reliance on outsourcing software application for its gadgets due to company's inability in establishing software, unlike Sony. Venture also has low profit margins as compare to Apple due to substantial difference in the costs of Apple and Enterprise with a much lower difference in quality. The varied focus of the business due to a great deal of items in its portfolio, result in the less efficient production and make the company unable to charge greater rates like Apple. The company is also inefficient in managing its patents and regularly faces the issue of patent violation.

Opportunities

Opportunities for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help lie in the growing Smartphone market and the company's performance in the market. Corp currently runs in about 80 countries and the company has a chance to increase its geographical growth by moving towards more emerging markets outside Asia.

Dangers

The vibrant market environment of technology industry present a severe risk on Corp's survival and require the company to invest much of its profits share on R&D in order to make it through in the long run. The market saturation in industrialized countries i.e. saturation of mobile company is likewise a big hazard for the business's development in the existence of strong competitors like Apple.

4 P's of Marketing
Swot Analysis
Item

Organization offers quality items and has a rather abundant portfolio which caters to various sections. LCD and mobile phones are the biggest items of Corporation, whereas DRAM is also not far behind in comparison of them.

• LCD/ TELEVISION
• Laptops.
• Cellphone.
• Air conditioner.
• Desktop computer.
• Hard disks.
• Washing machines.
• Refrigerators.
• Cameras.
• Microwaves.
• Flash memory.
• DRAM.

Cost.

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution utilizes both market competitive and market skimming pricing methods for its wide array of items. In competitive pricing it adjusts the rate according to the competition in order to gain benefit, whereas, it uses market skimming method where the item has actually an included worth and by offering a couple of items it can reach break-even.

Location.

It has one of the best supply chain networks, with retail distributors, their own sole distributors, E commerce channels like Amazon and so on. All its items are prompt provided to the selling place/ delivered to the clients directly in case of online order.

Promo.
Vrio Analysis
It uses both offline & online channels of promotion to market their items. Paid product ads, social promotion and digital advertisements are utilizes to create awareness about Organization items.

Value Chain Analysis.

It's an analytical framework for determining business activities that add worth or competitive benefit for the business.

Incoming Logistics.

For its incoming logistics it owns various logistics firms as it subsidiaries. It looks after its suppliers and produces a harmonious relationship with them and even reduced their payment cycles to boost this relationship even more which includes worth to their chain network.

Operations.

Corporation's core proficiency is its mass manufacturing it produces 90% of its items in-house. Divided into 3 different divisions its operations are specifically IT & Mobile Communications, Device Solutions and Consumer Electronic Devices. It is preserving operation centers worldwide to even more include value to its value chain network.

Outbound Logistics.

Its outgoing logistics system efficiency is among the main factors Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution is able to take on Apple. Company's own Electronic Logitec system plays a significant function in the outbound logistics operations. It even performs the tasks of collection of payment, settling insurance coverage claims, etc. on behalf of Corp.

Marketing and Sales.

Attracting target customer attention towards the item is done through marketing and sales to interact with them the value and competitive advantage the item offers. Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help advertising budget plan is continually rising because they began their repositioning globally and will continue to do so as they are continually aiming to invest and expand in high possible growth markets. The budget is spent on occasions, print and media advertisements, public relations and so on.

Company Service. Corporation put their customers at the top and continuously strive to deliver unmatchable customer service requirements. As after sales service is ending up being very essential to keep customers delighted and engaged, they even conduct studies through third parties to find out their client's feedback and implement it in the favorable way to reduce or if possible entirely remove their consumer concerns. By adding a direct support line to contact them 24 hr they have actually even more increased the included worth of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help service.

Division.

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help has diversified market segmentation, based upon its arrangement of wide range of products to a great deal of customers. Venture target customer sectors can be divided into 3 categories i.e. Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution IT and Mobile Communications, Corporation Customer Electronics and Org Device services.

Geographic.

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help geographic segmentation is based upon two requirements i.e. region and density. Corporation serves about 80 nations worldwide with its products provided to Urban in addition to Rural areas of the country. The Org is also growing its global existence and the business's versatility in finding its plants encourages global growth of Corporation.

Group.

The market segmentation of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution is based upon gender, age, life-cycle phase and profession. Corporation produces products that can be used by both females and males. The target customers for Organization IT and mobile interaction products have an age range of 18-65 with bulk at a young or freshly married life process stage. They are primarily staff members, trainees and specialists. Apart from it, Company Customer Electronic devices are targeted to a client section with an age range of 25-65. They are primarily employees and specialists. Venture Device Solutions are targeted at students, workers and specialists with an age variety of 25-65.

Psychographic.

The psychographic division of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution s based upon the social class and the lifestyle of the customer. Organization target clients on the basis of social class are mainly upper middle, middle and working class consumers, as Company sell items like cellular phone very little more affordable i.e. Motorola as well as not much expensive i.e. Apple. It supplies quality items to middle level consumers at a slightly high cost than others targeting the same section.

Behavioural.

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis bulk target customers have distinct behavioural qualities. They are brought in towards Org due to the fact that of its moderate costs with an extent of quality.

Quantitative analysis.

Sales of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis has actually increased remarkably from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net revenue of.48 billion $ to 5.9 billion $. Digital media is the biggest selling category of Venture with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales.

Qualitative analysis.

Whereas, the core strength of the business is currently making however long gone are those days when excellent items were selling themselves. Kim has actually currently started to reinforce the marketing activities of Corporation and very soon it will become one of its core strength like manufacturing if not much better.

VRIO.

Worth.

Business operates designs, makes and sell a vast portfolio of customer electronic devices. It runs in an exceptionally competitive environment and has successfully placed itself as the maker of quality items. The answer is yes.

Rarity.

As, stated earlier that Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution operates in an extremely competitive environment, which indicates all the companies have similar products. So, the response for rarity is no.

Imitability.

Due to the nature of the market, it is very easy for competitors to comprehend the performance of the items and easily make their own designs. Yes, Enterprise is just behind IBM in signing up brand-new patents each year, however the advantage is really short term in this industry.

Company.

Chairman Lee has totally turn-around Organization, from going practically bankrupt throughout the Asian monetary crisis of 1997 to the top 25 business worldwide. Certainly yes there appertains company in the company and the results promote themselves.

External Environmental Analysis

PESTLE Analysis

Political

Being a multinational brand spread nearly in every country worldwide, majority of the environments like USA, Europe, China etc., are extremely conductive for its operations. Nevertheless, it deals with some political pressures in less developed nations where law and order scenario is bad. Latin American, African and some Asian nations fall in this category, where political instability do have an effect on Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution operations.

Economic

Purchasing power of customers is crucial for business like Corporation to succeed and grow. Emerging markets like India, middle-eastern nations and so on supply development chances, whereas, due to recession even the customers of developed nations suffer severely. Hence it is very crucial for the company to watch on the continuous financial circumstance of the nation prior to entering the marketplace.

Socio-Cultural

International business need to deal with different social and cultural problems during its operations in a foreign nation. Business has also faced numerous problems however have actually adopted to the regional environments of the majority of the nations incredibly well. It has tailored its items, practices, policies etc. accordingly in order to succeed.

Technological

With an annual expenditure of 2.4 billion dollars in Research & Development, and with consistent ingenious item launches, Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis is among the top innovative business of the world. With a clear mission to be ahead of the rest when it concerns technological developments, Organization has risen to the no 25 of the leading successful companies of the world.

Legal

Each nation has their own laws and policies, being a multinational company Organization have to strictly follow those laws in their jurisdictions. Failure to do so, will lead to major legal repercussions. So, it has to study or work with a regional law professional prior to starting its operations in a particular country.

Environmental

With the rising awareness among consumers about the ethical & ecological violations of business, Corp needs to ensure that it follows all the safety guidelines. Ecological damages, ethical misbehaviors are not appropriate and in some nations the effects can be really serious. On the other hand it needs to do some Business Social Responsibility practices to show the locals that it appreciates their environment and individuals.

Porter's Five Forces

Hazard of Alternative

Hazard of substitution for Corp's each item category is quite considerable. Running in a very vibrant market lead the business to deal with a high danger of replacement. Aspects for high danger of alternative for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Help Mobile phone consist of the existence of high number of providers and Market saturation in industrialized countries, which make the cost of changing for consumers practically no. Replacement risks for Corporation visual screen depend on the changing life style of clients. Clients can switch to viewing visuals in the house towards outside activities. In addition to it, Business printing solutions items are threatened by the increasing destination of clients towards cloud storage.

Competition Amongst Existing Companies:

The rivaly amongst Business and its close rivals is extreme. The significant reason behind this is the method of market saturation in numerous number of product classifications, forcing Company to introduce more innovative functions in existing items and new ingenious products to preserve its development. The major rivals for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis samrtphones include Apple, Motorola, LG, Nokia, Huawei, OPPO etc.

( Company Sustainability Report, 2016) Supplier's bargaining power for Business is low as Organization runs economies of scale and its orders are of prospective size and worth. Due to incapability of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis to construct its own software, it has to outsource its software application development to Google, which becomes a possible supplier of software application for Enterprise, resulting in high bargaining power of Google.

Bargaining Power of Buyers:

Negotiating power of buyers for various variety of product categories of Company is extreme. One of the factor resulting in the extreme bargaining power is the schedule of large number of competitors in practically each product classification i.e. competitors of Corp Smart device, with a really little differentiation. The high schedule of providers of Mobile phones with minimum distinction, make the switching expense for buyers practically zero, thus increasing the bargaining power of buyers. Market saturation in the majority of the product categories also make the bargaining power of purchasers more intense in for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution. In spite of igh bargaining power Corporation is quite capable of selling its items at a higher rate than much of its competitors, due to luxury quality item and a reasonable brand name image.

Risk of New Entrants:

Threat of new entrants for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis is rather low. Along with it, requirement of huge knowledge and research study and development expenses for survival in the industry also make brand-new entrants hesitant to go into in the market. Market saturation is also one of the barrier of entry in innovation industry.

Competitive Analysis

Venture's high product diversity offers it distinction from its rivals. Unlikely to its close rivals including Sony, Intel and Nokia, who focus majority on a single item classification with Sony focusing on consumer electronics, Nokia on cell phones and Intel on chips, Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis had a big R&D costs on all of its product categories which make it possible for the company to earn possible revenue from sales of almost all of its products.

The business ranks first in 4 item classifications i.e. DRAM Chips, LCD Displays, Big Screen TVs and Microwave, in terms of global market share, among 8 different item classifications. Enterprise was the global leader in producing DRAM, SRAM and NAND flash chips. Corporation revenues from chips was less than Intel but its profits from chips was growing faster than Intel and has grown close to the revenue levels of Intel, as offered in the case Display 2.

Along with the chips Corp mobile market was likewise flourishing at a high rate than its competitors i.e. Motorola and Nokia. Corporation's cell phone's sales growth was 51% as compare to Motorola with just 4% and Nokia with no sales development. The major reson behind Org's high growth despite of greater prices than Nokia and Motorola was the business's high-end quality cellular phone.

Venture was also profiting from increasing market share of luxury LCDs as given in case Display 3. The major reason, making the business enable to get the opportunity is its mass production at low cost. Sony was the greatest rival for Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis in LCD market, nevertheless, it had also begun joint endeavor with Venture in 2003 for LCD producing, minimizing the competitors for Org.

Porter's Competitive Technique

Low Expense Management technique of porter is fully carried out by Company the way they accomplish economies of scale by strengthening their core proficiencies of manufacturing. They always bring something new and ingenious whether it's a product or a service.

Alternatives

Alternative Option 1

The Chief Marketing Officer (CMO) of Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Solution would develop a new brand name image by targeting the younger generation of the specific nation. As, specifically smart phones of Corporation are incredibly popular among the younger group.

Pros

1. It is the very best technique to develop Consumer Life time Value (CLV) by creating a long-term relationship with consumers. Build commitment through providing value and reap the benefits for long-term, as research study has actually revealed it is much cheaper to retain current clients than to draw in new ones.
2. Another pro of this option is that word of mouth spread faster among more youthful people and which in turn will bring in brand-new clients for my items.

Cons

1. Old consumers who were associated with Venture before may not like this new image the company is attempting to depict.
2 It will sustain additional expenditures to rearrange some items and it might not even bring success as the trends alter very rapidly among the more youthful market.

Alternative option 2.

Enterprise has made manufacturing its core proficiency for the many part of their organisation and due to which its managers are not afraid to completely step out of their comfort zone. It would be done by organizing training workshops throughout which significance of marketing will be taught and numbers will be provided. Failure to get the passing scores will get benched. Marketing environment need to be produced internally initially as real marketing begins inside the corporation.

Pros

1. Its pro will be that all the marketing technique advocates will come out and likewise the opposite ones.

Cons

2. Its con can create an extremely unhealthy environment in the workplace, as people typically withstand modification because they fear it.

Recognize the very best alternative

Option is the finest as it plainly has more pros since once a Customer Life time Worth is developed the business will profit from it till that customer is alive and has acquiring power. Plus, our target customers are the younger generation which are bound to live longer than the existing aging individuals. However, Org's main objective is to develop loyalty amongst its clients and make them redeemed it from them and even purchase their different items as well.

Execution Plan

• Targeting younger generation through social marketing, developing a link with them like Pepsi finish with music. And set the expectations reasonable and achievable.
• A group including finest marketing and sales professionals ought to be put together, and both views ought to be considered prior to protecting the resources needed to execute the plan.
• Thorough communication of the strategy need to be done as it is really crucial for everyone to be on the exact same page to make it work.
• Jobs and timelines must be develop and interacted accordingly to each individual responsible.
• The manager should use a dashboard which shows the progress of all the tasks which have been done or about to be done and by whom.
• The supervisor need to keep an eye on and keep a consistent look at the general and individual efficiency.
Because any new pattern or policy might come in due to which all the things already planned have to be adjusted, • Everybody must be ready to adjust midway. It's much better to have contingency strategies currently prepared.
• At the end of the project the manager ought to interact the results and if successful need to commemorate with the team.

Budget plan

The M-net program revealed compelling analysis about the low and high development prospective locations and just how much marketing budget plan should be designated accordingly. This modification the budget allowance of numerous managers and different countries were unhappy and argued but the analysis done by the program was accurate and revealed figures like North America and Russia development potential merited a 35% allocation while they were getting 45%. Whereas, China and Europe must be getting 42% however were instead provided 31%. It truly assisted to fairly distribute the resources and catch more customers by investing more on advertisements on the high growth capacity regions of the world.
Recommendations
Conclusion

Under Armour And The Sports Apparel And Footwear Industry In 2008 Case Study Analysis is a top 25 company on the planet now and prepares to get ahead of Sony who sits presently at no. 20. Its continuous financial investment in R&D and innovative practices have moved them to new heights but for them its' only the start and they wish to be amongst the leading 3 brands on the planet. They totally turnaround from practically declaring bankruptcy throughout the Asian Financial Crisis to a world renowned brand name, understood for quality and development. Their value chain and their core competency their production ability, along-with international brand image structure have actually seen their sales go from 16 to 44.6 billion $ from 1997-- 2002. With more growth in China and other emerging markets those numbers will only increase even more in the future. Their marketing efforts should be directed towards more youthful market amidst the internal arguments about marketing and should develop Consumer Lifetime Worth as it will not only provide advantages now however will continue to enjoy it till the customer lifetime. As the cost of retaining the consumer is much cheaper than bring in a new one.