Under Armour’s (Sportswear and Apparel) Generic and Intensive Strategy
Under Armour is best known for its innovative brand image. The brand has continued to innovate and bring new products since its inception. This is also the main source of its competitive advantage. Today’s business environment is highly competitive where Under Armour is faced with tough competitors like Adidas and Nike. The market environment is highly challenging and to survive the challenge is difficult unless Under Armour has a distinct source of competitive advantage. Michael E porter has highlighted three key strategies that a brand can use to build a source of sustainable competitive advantage. They are cost leadership, differentiation and focus. The last one he has subdivided into two categories that are cost focus and differentiation focus. Apart from these generic strategies there are intensive strategies that a brand can use to grow its market share and revenue. This is a discussion of the generic and intensive strategies that Under Armour has used to build competitive advantage and grow its market share.
The generic strategy used by Under Armour is that of differentiation. It has differentiated its brand and products from its competitors like Nike and Adidas. The brand has used them formula of innovation to make its products superior to that of the competitors. Its foundation was laid with an idea of innovation. The idea was to make a T-shirt which was far more suitable to the use of athletes than the existing sportswear. Under Armour had come to the market with a T-shirt that could keep the athletes cool and dry and that boost muscle performance and help them play better.
Under Armour’s main focus is to bring apparel and footwear that better caters to the needs of the athletes and which can be used to boost performance in sports. One important need of the players is to remain season proof. Under Armour makes cold gear, heat gear and all season gear so that athletes can play without bring affected by the effect of season. Innovation has helped Under Armour build a distinct and unique identity against its competitors and acquire an impressive market share. While compared to Nike and Adidas, its market share may be smaller, it has grown into a well-known brand. Innovation is at the root of everything at Under Armour and it invests a lot in design and product innovation whose results are footwear and apparel designed to boost performance.
There are four intensive strategies that can be used to grow market share and to expand one’s customer base. They are market penetration, market development, product development and diversification.
Market penetration involves selling more to the existing customer base. As Under Armour’s brand grew and it kept adding more products to its product line, the brand grew its sales by selling more to its existing customer base. It mainly targets the athletes or people involved and interested in sports.
Market development means selling to new customers or expanding to new markets in new regions or areas. This is also a key strategy that the brand has utilized to grow its market share and customer base. Over time it has expanded its market to several nations outside US. The Asian markets and particularly the Chinese market has grown highly important for Under Armour. In the past few years, it has aggressively focused on expanding its international presence. The international sales are now a significant part of its overall revenue. In the Asian nations, it sales have increased fast. In this way, UA has used market development strategy to enter new markets and increase its sales and revenue globally.
This is another major strategy that US has continued to use to grow its customer base and market share. While innovation is its main focus it has continued to roll out innovative products one by one. Staring from the first Compression T-shirt to the Speed form Slingshot, UA has made several innovative products that are designed to help the athletes perform at their peak. In this way, UA has successfully used the product development strategy to grow its popularity, customer base and market share.
This was a discussion of the generic and intensive strategy of Under Armour. While, US chiefly focuses on product innovation and has formed a distinct brand image, it is facing stiff competition from the market rulers like Nike and Adidas.