Nikkei and Ideas are firmly entrenched in cozens of markets across the globe, with hundreds of high-quality products available, and numerous endorsement contracts with world-renowned professional athletes. Yes, Under Armor’s goal is to become the world’s largest retailer of sports apparel, but trying to simply out-muscle the competition might not be the most effective way to achieve that. The following are several strategic alternatives that the company could consider: Divert domestic resources to fund research and development: In 2011, Nikkei spent $2. Billion on advertising alone. That’s nearly a full billion more than Under Armor’s total sales revenue. Successful international expansion will certainly require advertising to create brand awareness, but here in its home market (U. S. ), under Armor already has built a strong reputation. Rather than waste resources on bidding wars with Nikkei and Ideas for top-tier athlete endorsement contracts, why not use that money to instead further the already existing gap in product quality?
Much of Under Armor’s initial success can be credited to its fabrics that were specifically designed to jugulate body temperature and increase performance better than what everyone else was selling, so maintaining and building off that advantage is critical, if Under Armor wants to remain competitive within its industry. Selective expansion: Internationally, Nikkei and Ideas have both invested heavily in building product lines and developing marketing strategies that emphasize the popularity of soccer and basketball.
Particularly in Europe where both are firmly entrenched as market leaders, it would require a huge investment by Under Armor to gain a foothold. It might be in the company’s best interest to first look elsewhere, to places such as China, and some of the Central American countries where Nikkei and Ideas haven’t been able to completely take over the market yet. Differentiate the brand’s image, not just the products: What do most people think of when they see the Under Armor log? High-performance athletics, right? What do they think of when they see Nine’s, or Ideas?
Likely the same exact thing. In such an intensively competitive industry, differentiation is key to winning over consumers, and Under Armor has an opportunity to do just that if it can slightly retool its image. Fitness, health, and wellness have seen a dramatic rise in popularity recently, and if under Armor can find a way to associate its brand with those lifestyle facets, then it would likely be able to tap into additional market segments, and give consumers in general one more reason to pick Under Armor over one of its competitors.
The problem with this strategy is that it would require a significant amount of marketing resources, and potentially loud damage the image that Gender Armor has worked hard to build over the past 10-15 years. The company wants to be known mainly for performance athletics, and if that image becomes clouded with other lifestyle virtues, it could lead consumers to be confused with who exactly Under Armor is. However, if it could pull off a multi-faceted brand image known not only for performance athletics, but also for things such as health and wellness, then that would give Under Armor a significant advantage over its competitors.