Wednesday, April 20, 2016

Hey Under Armour, Can You Say What Your Strategy Is?


One company that has taken criticism for an under performing strategy is Under Armour.[1] In 2014, the sportswear company unveiled its biggest ever global market campaign for women-“"I Will What I Want."[2] This campaign signaled to competitors and consumers alike that “women’s marketing was no longer an afterthought.” It is this fragmentation that is the root of UA’s shortcomings. As Collis and Rukstad highlight in their article, “in an astonishing number of organizations…no clear strategy exists for the company or its lines of business” (1). Even when a strategy exists, often management fails to execute their plans. 
CEO David Plank admitted that UA’s women’s line “has failed to live up to the advertising” adding that “we don't think when you walk into a store you're getting the best version of Under Armour yet.” Plank sees a need for UA to extend its relevance “beyond just strictly in the gym or what she is wearing beneath" by offering more and better merchandise for outside the gym.[3] This challenge requires reconciling the new line with the overall brand identity built on two main concepts: innovation and an underdog attitude in athletics. UA’s I WILL WHAT I WANT® women’s campaign strategy is described as a "woman-a-festo" that celebrates women "who had the physical and mental strength to tune out the external pressures and turn inward and chart their own course."[4] This female empowerment campaign is part of UA’s strategy to build “its women’s business even larger than its men’s business.”[5] One might ask, is this goal compatible with the success of the men’s line? Competition with “big players like Victoria's Secret and Lululemon,[6]” might require a change in fundamental strategy. Generally, bras and the like are a fungible product which requires UA to compete more on price rather than on brand recognition or innovation which is a fudnamental shift in strategy.[7] A lack of product differentiation is at odds with UA's innovative spirit. Also, price competition is bad for business because it cuts into profits. Continuous back and forth price cutting will ultimately hurt the competing businesses and the consumers by forcing some competition out of the market.[8] If this trend develops, then UA will be faced with an internal conflict having to reconcile their innovative brand identity with the lack of product differentiation that foster's price competition. 
Still, there is time left for UA's executives to correct course. Collis and Rukstad begin their article with the questions, “Can you summarize your company’s strategy in 35 words or less? If so, would your colleagues put it the same way?” (1). So I decided to ask an Under Armour sales representative to summarize UA's strategy and this is what he had to say:

“Integrating innovation, technology and comfortable athletic wear to enable people to make daily enhancements in their health and well-being”

His response closely parallels a UA press release about their women’s campaign which stated that, “the Armour High Bra is the focal product of the campaign and combines unique style with key design innovations to empower the wearer in every way possible.” 

What's more, the proposed future direction of the I Will I Want campaign appears to align with UA's articulated strategy. For example, UA recently acquired several fitness apps (MyFitnessPal, MapMyFitness) to “help the company better communicate with and understand its female customers.”[9] It is hard to think of a clearer example of integrating technology with athletic wear to enable personal betterment. Nevertheless, ultimately time will tell as to how well UA implements their strategy while maintaining a coherent brand identity and profitability.  




[1] http://www.businessinsider.com/under-armour-ceo-on-womens-business-2015-4
[3] http://www.businessinsider.com/under-armour-ceo-on-womens-business-2015-4
[4] http://adage.com/article/news/marketer-year-armour/296088/
[5] http://www.forbes.com/sites/laurengensler/2016/01/11/under-armour-women-sales/#1d4d5a61482d
[6] http://www.businessinsider.com/under-armours-new-sports-bra-collection-2015-7
[7] http://www.forbes.com/sites/laurengensler/2016/01/11/under-armour-women-sales/" \l "1d4d5a61482d
[8] http://www.investopedia.com/financial-edge/0810/the-pros-and-cons-of-price-wars.aspx

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