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Conduct an external analysis of Under Armour, including a STEEP and Porter’s Five Forces analysis.

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STEEP analysis

Sociocultural

Social Factors that Impact Under Armor, Inc.

      Society’s culture and how things are done in an organization affect the culture of a company within an environment. Attitudes, beliefs and behaviors of a population is an important role in how marketers at Under Armor will understand the tastes and needs of the customers of a given market and how they will design the products for the industry consumers. The analysis around the Under Armor social factors takes into account the dominant class and power structure in the society, class structure, hierarchy and power structure in the society, education standard and level in the Under Armor and health behaviors and environmental consciousness attitudes.

Examples: Under Armour has developed extensive sponsorships throughout the sports world to build its brand image, supplying  material to NCAA IA football programs and NFL, MLB and MLS. 

Technological

Technological Factors that Impact Under Armour.

    The technological part encompasses the level of communication inside and outside the company, the energy sources used in the production process, patent regulations, the type of transport, innovation and research and development processes. Within the under armor, how the company produces the products, what materials it uses, in addition to transportation, sources of supply and new manufacturing and managerial processes. Recent technological developments by Under Armor competitors impact on product offering and cost, as well as in value chain structure (performed activities that add value to the product) in consumer goods sector.

Environmental

Environmental Factors that Impact Under Armour.

    As a multinational company, Under Armour operates in different markets, which means that the company is subject to different norms and standards regarding the environment and the impact caused by its actions. These regulations may impact the profitability of an organization and how your production process will be done. Another problem is that, as in the USA, states have laws of their own which require careful attention at the time of production and transportation. Another important factor is that in certain areas, as in some countries in Europe, there are tax reductions for companies that have policies in favor of the environment. The company has to evaluate the environmental standards that are required to operate in those markets. Some of the factors that Under Armour need to worry about is Weather and how it changes throughout the year, laws to control air, water and environment pollution. and recycling and waste policies

Economic

Economics Factors that Impact Under Armour.

    In the Macroeconomics environment, the elements determine the aggregate demand, supply and investment. On the other hand, micro environment components such as employees,  customers, investors, media and competition  impact the competitive advantage of the company. economic indicator from countries, states, as well as the economic health of the company are used to forecast the growth trajectory, as well as present and future expectations in the collection and growth of the company. Under Armor on an external economic analysis of the market should be concerned with, first, the type of economic system adopted by the country, with the degree of government intervention in the economy and if the country is stable not only politically as economically, economic growth rate, discretionary income, unemployment rate, inflation rate and exchange rates (value of the currency). Moreover, the company should be concerned with Infrastructure quality, comparative advantages of host country, skill and education level of workforce and the labor costs.

Political

Political Factors that Impact Under Armour.

   Political elements play an important and directly role in Under Armour’s long term profitability. The political issue has to do with exposure to a political environment and the risks arising from the type of system and the form of government. The issues of laws and how the company can establish itself should be studied before the company thinks about opening a factory in a certain place, because depending on the code of laws, the company can suffer losses or even have to close in case it is not according to some determined norm. Under Armor has to be careful with government corruption and bureaucracy, intellectual property protection of its technologies, methods, products and ideas, trade regulations & tariffs on domestic and foreign trade, product pricing, wage (minimum wage and overtime) and labor regulations and Industrial safety and labeling requirements.

Porter’s Five Forces analysis.

Threats of New Entrants

Under Armor is a consecrated brand in the sportswear market and shares with large companies such as nike and adidas. The threats of new entries will be of great impact because as it has an established brand, it can have lower pricing strategies or even reduce the costs of prices to gain competitiveness. All these media create an effective barriers to protect the company from new competitors. Under Armor can fight new companies by innovating new products and services. New products brings new customers and keeps the old ones. Moreover, for being in the market, Under Armor can lower the fixed cost per unit and invest the saved money in other areas such as research and development projects. 

 

Bargaining Power of Suppliers

The power of suppliers affects the price of goods and services, depending on the number of suppliers and how much would cost to a company to move from one supplier to another. The raw material required by Under Armour to produces their products are available in the market in abundance. At the same time there are many suppliers of those materials in the industry. Suppliers in dominant position in the market can reduce the margins Under Armour can earn. Under Armour can face the power of suppliers buying from different suppliers avoiding monopoly and exploring one. By using different materials in case the price of a raw material goes up, the company has a substitution option.

Bargaining Power of Buyers

    Buyers always want to buy the best quality product at the lowest price. Sometimes consumers are willing to pay a little more because of the brand, which is what happens when a company develops customer loyalty. In this market segment the customers have a high bargaining power because of the numbers of companies like Nike and Adidas, in addition they have greater access to increasing discounts and offers. Under Armour can face the bargaining power of buyers by building a base of customers by offering a good service and a quality product. Moreover, to keep the old costumer to and attract new niches, the ability to innovate and create new products and give discounts and offerings on new features will be important to stay stable in the market.

Threats of Substitute Products or Services

    Competitors can introduce a product or service in the market that can provide better or different performance to the customers for a cheaper price. When a service or a new product from another company meets a customer needs, it can affect some niches of products of Under Armour. Therefore, to face the Threat of Substitute Products or Services, Under Armour must understand the needs of the customers to understand why they are buying a product or asking for a service. 

Rivalry among the Existing Competitors

      In the industry that Under Armour operates, the competitiveness is great and is rapidly changing because of the needs and tastes of the customers. Under Armour share the market with other multinationals that produce clothes, footwear and accessories, mostly sports. The disputed competition occurs, mainly, in product quality/technology, competitive price ( in prices and discounts, reducing the profit margin of the industry), marketing capability, distribution and manufacturing. rapidly changing because of the  needs and tastes of the customers. What Under Armour can do is differentiate the product, increase quality and build a large customers base.