7
Global Sport Business Plan – Under Armour in Australia
Goal Setting
Define long-term goals
Question: What are the long-term goals for this business in the next five years?
Under Armour owns about 2% of the global share of sports ware with a market cap of under $10 billion, and it proves to be an opportunity for improvement. The long-term goal is to increase the market share from 2% to double-digit percentage by 2025.
Question: How will the international trade market help you reach your long-term goals?
Sports and athletic ware continues to grow throughout the world. The U.S market, which accounts for 36% of athletic apparel, shows a market demand for under Armour to offer athletic clothing. Further diversification into yoga clothing, which saw a rise of 144%, will increase the gender market demand to help increase the company’s market share.
Define short term goals
Question: Select one or two target markets; research product standards and certification requirements; make modifications, if needed to get product export-ready.
Target markets reach a greater audience from ages 18 to at least 30 with under Armour apparel and accessories. Licenses have been developed under agreements to design consistent products in maintaining brand standards with performance advantages. Digital platforms have also liaised with licenses, subscriptions, and advertisements to be included in net revenues.
Question: What are your two-year goals for international business products?
Under Armour’s two-year goals for going international involves identifying new target consumers from the initial ages of 18 to 24 to include consumers of ages up to 30. Further, it also aims to include more women in its product range. The second goal is to significantly impact its technological front through the digital platform “connected fitness.”
Question: Develop an action plan with timelines to reach your short-term goals.
Problem – Slow growth in global market share due to insufficient customer base.
Goal – Increase market share to a double-digit percentage by 2025
Timeline
Business in six months – meet, create customer demand and diversify products to generate more sales.
Business in 12 months – locate and participate in regional selling events.
Business in 24 months – review competitors’ offers and improve our products targeting shortcomings in their offers.
Identifying Products With Export Potential
Select the most exportable products to be offered internationally
Question: What are the major products my business sells?
Apparel – We have a wide variety of styles to provide the market for consumers in various regions that various weather conditions may impact. We have COLDGEAR to be worn when it is cold, HEATGEAR for hot temperature regions, and ALL-SEASON gear designed to be worn in extreme temperatures (Under Armour, 2021).
Footwear and accessories – Footwear is designed with performance attributes designed for athletes in sports like football, softball, and basketball. Accessories like bags and gloves complement apparel with the same level of performance.
Connected fitness apps – A digital platform, is designed to bring fitness to digital life and work with fitness enthusiasts to offer a gym experience at home.
Question: What products do you feel have the best potential for international trade?
Apparels and footwear have the preeminent prospective for trading in various regions.
Evaluate the Products to be Offered Internationally
Question: What makes your products(s) attractive for an overseas market?
There are few global competitors, and the company offers different quality of products compared to others. The sports and recreational activities are expanding, which provides an opportunity for the overseas market. The company also has a diverse range of products suitable for diverse customer needs.
Question: Why do you believe international buyers will purchase your company’s products?
The products are associated with improved performance opting for them to buy. The apparels are functional ware that provides freedom of movement, which proves beneficial to the purchaser. Footwear and accessories such as gloves help protect and prevent injuries.
Determine Your Company’s Export Readiness
Advantages
Disadvantages
The company has a strong local market share.
Inconsistent supply of cotton and petroleum products.
Its products are perfomance based and of high quality.
Few factory outlets in foreign countries.
Technological advancement in company operations.
Loss of top management staff.
The company can establish sponsorship agreements.
Uncertain consumer needs.
The company can offer manufacturing licence agreements.
Long time required for design and production.
Increased retail outlets.
Short term licensing agreements
The athletic apparel industry is highly competitive. Various renowned brands, including Nike and Adidas, are fierce rivals that Under Armour has to out-compete to dominate the market. Nike and Adidas have embraced product differentiation and pricing strategies that have increased customer loyalty for their products. Even though Under Armour faces stiff competition from the longstanding giants in the apparel industry, it has demarcated its niche by relying on superior, innovative products, along with unique selling approaches. Additionally, the company has invested in insightful strategic management decisions, such as the acquisition of EndoMondo, MapMyFitness, as well as My Fitness Pal. The company’s ability to innovate exemplifies that it will continue producing better products that will influence customers’ preferences, essential for future success.
Your Business/Company Analysis
Question: Why is your business successful in the domestic market? Give specific reasons. What is your company’s annual growth rate?
The company products which incorporate athlete attire are designed to improve their performance and for consumer satisfaction. The company has contractual licensing, which has helped in manufacturing their products to meet market demand. Sponsorship agreements with sports teams have pushed brand awareness and enhanced growth and expansion. At the same time, the company’s annual revenue decreased due to the 2020 COVID19 pandemic, and it is expected to increase by 33% annually over the next five years (Senteza, 2020).
Question: What is the competitive advantage of your products or business over the domestic and international businesses?
The company incorporates innovation in materials used as it buys large volumes at a lower cost. It has also established a brand name through endorsement deals that have given the exposure of its products to consumers. Innovation technology in the supply chain has helped distribute its products on demand.
Question: What is your level of commitment and that of your company’s top management to expanding into the international market? How much preparation time, planning, and resources are you willing to commit to implementing an export program?
The goal of the export program is to strengthen the relationship with consumers. Management aims at eliminating 50% of its stock-keeping units to ensure every product has something to offer to achieve global expansion. Management aims at slashing costs and optimizing inventory levels. Top leadership wants to develop a culture for marketing investments and new product innovation and, hence, has a long-term preparation time.
Industry Analysis
Question: Find export data available in your industry.
Under Armour’s principal business involves designing, marketing, and distributing sporting apparel, footwear, and accessories. It has 19 offices around the world aimed at improving athlete performance. Its local region, North America, generates $3 billion in revenue. Latin America had $164 million, Asia-pacific had $628 million, and Europe, the Middle East, and Africa have $598 million in net revenues as of 2020.
Question: Research how competitive your industry is in the global market.
Under Armour has an apparel market share of 14% in the North American market, which surpassed Adidas to become the second sports brand in the region (James, 2018). Its expansion in footwear makes up 6% of the market share, ranking third behind Nike and Jordan. It has seen growth as sales have been going up compared to the decline of Adidas apparel, eating aware of its market share.
Question: Find your industry’s growth potential internationally.
The company seeks opportunities in the global footprint. It has a long-term goal of improving sales through innovation. Investments in its stores and the online platform allow reaching consumers. It is also focused on brand strengthening, increasing its direct-to-consumer revenues by 11%, knocking out other competitors.
Question: Research federal or state government market studies that have been conducted on your industry’s potential international markets.
Current customers are mostly male, and there is a potential to attract female consumers through yoga apparel (Pafitis, 2021). Consumers are sporting amateurs or athletes and fitness individuals who are inspired by their performance-oriented products and moral values. Devoting more money to international marketing, sponsoring colleges and universities, and offering competitive pricing will increase their customer base
Marketing Plan
In the sports wear industry Under Armour has good competition like Nike, Adidas, and Puma. They also have a strong presence internationally. To set Under Armour a step above the competition it will need to provide new and different ways to market the brand. International buyers will purchase the product because clothes and shoe are high demand items that people need every day. Currently North America is Under Armour’s largest market. The demand for clothing and shoes will always be in high demand. With athletic wear becoming more of people’s everyday wear and not just for working out or physical activities In the next couple of years, the market size will continue to grow.
The Customers that Under Armour currently attract are athletic, active, and considered to be a younger crowd. The brand will benefit by expanding to another location and trying to grow the brand with a new audience.
For a successful Marketing campaign to be successful in Australia, Under Armour has to understand the demographic of its customer base. According to the industry statistics:
$340.5 Million in Online Sporting Apparel in Australia Market 2021
12.9% Online Sporting Apparel Market Size Growth in 2021
18.1% Market Size Growth from 2016- 2021
Revenue in the Apparel market amounts to US$19,408m in 2021. The market is expected to grow annually by 3.10% (CAGR 2021-2026).
The market’s largest segment is the segment Women’s Apparel with a market volume of US$10,435m in 2021.
In global comparison, most revenue is generated in the United States (US$317,563m in 2021).
In relation to total population figures, per person revenues of US$752.58 are generated in 2021.
In the Apparel market, volume is expected to amount to 1,783m pcs. by 2026. The Apparel market is expected to show a volume growth of 4.6% in 2022.
The average volume per person in the Apparel market is expected to amount to 62.18 pieces in 2021.
By 2021, 89% of sales in the Apparel market will be attributable to Non-Luxury goods.
With the extension of the coronavirus lockdown, Australia saw a jump in online fitness sales in 2020-2021. Gaining an online focus in Australia is key. Over the past three years, Australia’s e-commerce market has grown at a 21 percent CAGR, with online retail sales of around $32 billion. The pandemic stay-at-home orders have given consumers an opportunity to embrace the convenience of e-commerce. Even older generations, which have traditionally been anchored to brick-and-mortar purchases, are turning to online shopping. Kearney’s April 2020 Consumer Research Study reveals that shopping online during the pandemic is synonymous with product availability, convenience, and safety. As consumers become accustomed to these luxuries of online shopping, this channel is likely to become their preferred way of shopping once the pandemic is over. To win in this new normal, retailers will need to consider both the immediate and long-term implications of consumers’ changing behaviors (Kearney).
Marketing Steps for Under Armour
Under Armour prides itself in its amazing marketing plan that compounds various strategies – product, pricing, promotion, and channel distribution. The company rivals its competitors by using innovative materials of high quality preferred by consumers. Also, the company has leveraged its reputation of producing quality sportswear products by embracing a value-based pricing strategy (Boone, 2020). It charges slightly higher prices on its products, knowing that loyal consumers will still prefer its products over other competitors. Besides, the firm’s successful promotion of its products has been touted as the primary reason for its increased popularity. It uses multiple promotional mixes, such as sporting endorsements, along with online and offline communications that have substantially marketed its products to a wide range of customers. In addition, the hybrid distribution channels utilized by the company have helped it efficiently deliver its products to customers. Undoubtedly, Under Armour’s marketing plan has made the company develop high brand equity, making it a customer preference. Under Armour must move through a series of five steps for a successful marketing campaign in Australia.
Step 1
Market factor assessment: currency, inflation rates, availability, controls, stability of exchange rates
Balance of payments
Per capita income and distribution
Disposable income and expenditure patterns
Country Australia
High
High
Sustainable
High
Rating
5
5
4
4
Country
New Zealand
Low
Medium
Medium
Rating
3
4
4
Social/Cultural Environment :
Literary rate, education level
Existence of Middle class
Similarities and differences in relation to home market
Language and other cultural considerations
High
High
High
4
5
5
Medium
High
High
Low
4
5
5
2
Market Access :
Limitations on trade, high levels quotas
Documentation and import regulations
Local standards, practices and other non-tariff barriers
Low
Low
High
4
5
5
High
High
Low
5
5
3
Patents and trademark protection
Preferential treaties
Legal considerations for investments, taxation, repatriation,employment,code of laws
High
High(Central Intelligence Unit,2021).
High
5
5
5
Low
Low
Medium
3
3
4
Product Potential :
Customer needs and desires
Local production, imports consumption
Exposure to and acceptance of product
Availability of linking products
Industry-specific key indicators of demand
Attitudes towards products of foreign demand
Competitive offerings
High
High
High
High
High (International Trade Administration, 2021).
Positive
Low
5
5
5
5
5
5
5
4
Low
Low(Central Intelligence Unit,2021).
Low (International Trade Administration, 2021).
Medium
Medium
Average
High
4
3
3
4
4
4
5
Local Distribution and Production:
Availability of intermediaries
Regional and local transportation facilities
Availability of manpower
Conditions for local manufacture
Yes (International Trade Administration, 2021).
Present
Yes
Favorable
4
4
4
5
Low
Low
Medium (International Trade Administration,2021).
Moderate
3
3
4
4
Total
117
Total
91
Step 2: Research how competitive your industry is in the global markets.
The industry is highly competitive due to the limited barriers to entry for new entrants. International buyers will purchase the commodities because we offer a variety, affordable and highly attractive goods that meet the needs of different client segments.
Question: Much of this information can be obtained from an industry trade association for your particular industry. What is your present U.S. market percentage?
The American market percentage is at 33%. For the North American segment, the region indicates a value of 14% in the market share for apparel products and commodities (International Trade Administration, 2021). The high values indicate a great market potential within the American markets. The figures mean that the company’s success rate can be so high and sustainable in American-based markets.
Question: What are the projected sales for similar products in your chosen international
markets for the coming year?
Projected sales indicate the success rates of the commodities at an 11 % revenue increase (Senteza et al., 2020). Managing the competitors with the right strategies highlights a significant rise within the Australian markets.
Question: What sales volume will you project for your products in these international markets for the coming year?
The projected sales volume is about 75% for the coming year, with the competitive factors intact and sustainable enough. The company can have the best outcomes within the year.
Question: What is the projected growth in these international markets over the next five
years?
Over the next five years, we expect a 100% growth in the identified international market. If exploited effectively, market factors can have the most lucrative outcomes (International Trade Administration, 2021). The elements make the conditions viable and sustainable enough for the identified teams.
Step 3: Identify Customers within Your Chosen Markets
Customers entail gym populations, fitness groups, and other sports fanatics within the locations. The teams help increase the market demand for the commodities. By targeting them, one increases their revenues.
Question: What companies, agents, or distributors have purchased similar products?
Sports, fitness, and other athletic firms have purchased the products for their activities. The groups helped meet targets and ensure progress in the identified market spheres.
Question: What companies, agents, or distributors have made recent requests for information on Similar products?
Some companies and distributors that have made inquiries for the commodities entail recreational facilities, hotel groups, and fitness clubs around the globe (Senteza et al., 2020). The categories showed massive interest in the commodities due to the value guaranteed.
Question: What companies, agents, or distributors would most likely be prospective customers for your export products?
Prospective product groups entail single-line commodity sellers and local retailers dealing with footwear and other sports accessories (Senteza et al., 2020). The teams are the most viable in product marketing to increase sales and make experiences much better.
Step 4: Determine Method of Exporting
Models entail air and shipping methods. The first depends on the urgency of the commodities, whereas the latter depends on the shipping costs and other freight characteristics of the goods (Under Armour, 2021). The two considerations determine the approaches selected.
Question: How do other U.S. firms sell in the markets you have chosen?
Other companies sell through international distributors and subsidiary companies. The groups help secure the most profitable markets to explore and meet their rising demands.
Question: Will you sell directly to the customer? 1. Who will represent your firm? 2) Who will service the customers’ needs?
Sales will be made directly using representatives with adequate information about the commodities. The groups address queries and help meet the demands of Australian clients.
Step 5: Building A Distributor or Agent Relationship. Plan to travel to the country in question as many times as is necessary to build a successful relationship.
Question: Will you appoint a rep or distributor to handle your export market? Consider legal advice from the Export Legal Assistance Network (ELAN). A free initial
consultation is available by request through a U.S. Export Assistance Center.
A distributor can be hired to make the export process much easier for the company. The methods help reduce trade barriers with more opportunities of learning about the target market and clients (Senteza et al., 2020). Having the teams is also useful in market research to have the best competitive outcomes.
Question: What facilities does the agent or distributor need to service the market?
The needed facilities entail internet connectivity, product distribution gadgets, and other people to make the process seamless (Under Armour, 2021). The first improves communications, whereas the others ensure timely delivery of the commodities. The elements make the categories vital for the international distributor.
Question: What type of client should your agent or distributor be familiar with to
sell your product?
The local supply and distribution channels alongside language competency entail some of the requirements for the distributor. The factors minimize time wastage to ensure client satisfaction. The practices also promote effective sales, especially in culturally and linguistically diverse client populations.
Question: What territory should the agent or distributor cover?
The largest territory to cover is Australia’s Sydney due to its many economic activities and client concentration. The moves help attract a huge following while satisfying the market demand for the commodities. The elements enhance the outcomes of the sales activities within the region.
Question: What financial strength should the agent or distributor have?
The financial strength required is accountability and integrity to minimize losses. The values help foster ethical dealings while reducing theft incidents that might adversely affect sales outcomes (Under Armour, 2021). The factors make the two necessaries in the scenario.
Question: What other competitive or non-competitive lines are acceptable or not acceptable for the agent or distributor to carry?
Competitive lines entail the product documentation and manuals that help market and ensure understanding within target groups. Testers can also be carried to promote effective marketing of the commodities. The considerations make the activities effective and successful for the teams.
Question: How many sales representatives do the agent or distributor need, and how often
will they cover the territory?
Covering the territory will require at least seventy representatives, given the vast nature of the location. The aspects help meet the market demands and foster progress within the identified locations.
Question: Will you use an export management company (EMC) to do your marketing and
distribution for you?
Yes. The EMC will be useful in exploring prevailing market trends and giving the best strategies to increase international market presence. Doing so helps in sustainability and the management of the aggressive competition in the Australian industries.
EMCs do not have to represent your company exclusively on a worldwide basis. Rather, they sometimes can represent you in specific regional markets. For example, you might contract with an EMC to sell your products in Latin American markets while you continue to handle direct export sales to Europe and Asia. If yes, have you developed an acceptable sales and marketing plan with realistic goals you agree to? Comments for either yes or
no.
Yes.
References
James, C. R., & Whitney, K. (2018). Under Armour: repositioning for the global stage. The CASE Journal.
Pafitis, E. (2020, September 30). Under Armour’s marketing strategy: A case study: Sb. Under Armour’s Marketing Strategy: A Case Study | SB. Retrieved November 11, 2021, from https://www.startingbusiness.com/blog/marketing-strategy-under-armour.
Senteza, J., Suh, I., & White, T. (2020). Under Armour, Inc.: will a fallen titan recover?. International Journal of Teaching and Case Studies, 11(4), 285-301.
Under Armour. (2021, March 26). Under Armour Annual Report. AnnualReports.com. https://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_U AA_2020.pdf
Global Sportswear Market Share & Trends Report, 2019-2025. (n.d.). Retrieved November 21, 2021, from https://www.grandviewresearch.com/industry-analysis/sportswear-market.
Sportswear market size, share & covid-19 impact analysis, by product type (footwear, apparel, and wearables), end-user (men, women, and children), distribution channel (e-commerce stores and retail stores), and Regional Forecast, 2021-2028. Sportswear Market Size & Share | Trends Analysis, 2021-2028. (n.d.). Retrieved November 21, 2021, from https://www.fortunebusinessinsights.com/sportswear-market-102571.
Boone, L. (2020). Contemporary marketing. New York: Cengage Learning.
Prange, C. & Kattenbash, R. (2019). Management practices in Asia: Case studies on market entry, CSR, and coaching. New York: Springer.
Boone, L. (2020). Contemporary marketing. New York: Cengage Learning.
No Author, May 31,2021, Online Sporting Apparel in Australia Market Size 2007-2027, November 21, 2021, https://www.ibisworld.com/au/market-size/online-sporting-apparel/
No Author, No Date, Statista Australia Apparel, November 21, 2021, https://www.statista.com/outlook/cmo/apparel/australia
No Author, No Date, Covid 19 and Its Impact on Your Business, November 21, 2021, https://www.kearney.com/covid-19/article/?/a/as-covid-19-fuels-a-surge-in-online-shopping-will-e-commerce-be-the-new-normal-
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