Global Policy and Strategy The Companies Strategy

Question: Discuss about the Global Policy and Strategy for The Companies Strategy? Answer: The major components of the companys strategy based on following areas include: Product Line: The product line strategy of Under Armour involves the creation of a multiple product lines. Under Armour uses the latest and best technologies for producing their products and they use the best material for manufacturing the clothes, which distinguishes Under Armour from other brands. The classified product lines of Under Armour include HEATGEAR for the hot atmosphere, COLDGEAR for the cold air and ALLSEASONGEAR for the healthy environment. Marketing/Promotion and Brand Management: Under Armour has a high brand equity as it is marketed well and well known to all the peoples of the United States and India. Under Armour uses the different elements of the promotional mix for selling available merchandise. They implement sales employees in their retail shops, which makes them available to a particular seller. Under Armour advertises their products in different forms with the help of magazines, billboards, the internet, and television. They also use sales promotion for increasing their percentage of sales by offering various coupons, discounts, and sales (Adam, 2016). Distribution: Under Armour distributes their varieties of products in both wholesale and retail markets. Under Armour made a contract with California and Maryland for implementing distribution facilities through its retail and wholesale markets. The companys strategy is based on distributing their products mainly through independent distributors and third party logistic provides. Product Design and Development: The manufactured goods of Under Armour consist of technical fabrications, which the third party produces, in collaboration with their product development team. This strategy enables them to create technically advanced fabrics and manufacturing of the products according to specifications including fit, design, end product use and climate to fulfill the market needs (Adam, 2016). Sourcing/Manufacturing/QA: The raw materials and the specialty fabrics that Under Armour uses consist of technically advanced product, which the third parties manufacture. Under Armour did not involve themselves in long-term agreements with the manufacturers for producing their products. Distribution Facilities and Inventory Management: Under Armour manages their inventory levels by expected sales, existing orders, and on the immediate delivery needs of their customers. Their inventory strategy concentrates on meeting the needs of their customers by improving their inventory efficiency with the help of various processes and systems. These systems are benefited with supply planning capabilities and forecasting. The strategies also include inventory performances like time reduction for manufacturing, better execution and planning related to the selling off excess inventory (Thompson et al. 2013). 2 A: Under Armour is a brand, which has made a spectacular contribution to its target audience through a great effort towards its market. The company is all about sports apparel, active wear and athletic footwear in the United States. Established in the year 1996, the company aimed at building the sportswear as per its customers requirements. The company makes outfits which are cool for its athletes in the summer season. On the other hand, they provide warm outfits for its athletes in the winter. The costumes made in such way that it can absorb the sweat in a slight amount of time. The reason behind the companys progress was also that the firm looked for expansion in North America (Reddy, 2015). 2 B: As per the strategies of the company adopted for last 15 years, it can be said that Under Armour is a brand which has innovated diversified products for its customers as per their needs. They have made them continuously involved in developing products as per the changing demands. They always aimed to be the provider of the best product in their market segment. They have significantly achieved the position by increasing their product sales. All the sports people including the professional and the unprofessional collegiate are satisfied with their product. Company of such high thoughts and missions always tend to be at the ultimate position in the market (Miloch et al. 2012). 3: The competitive advantages of Under Armour vs. Nike are as follows: Under Armour Nike 1. They have manufactured cold and sweat resistant clothing. 1. They have well set up brand image and are well known in the marketplace. 2. They manufacture athletic apparels for the Olympics and universities. 2. They use to produce sports equipment. 3. They have performance monitoring tools, which helps the company to measure their overall performance and which in turn increase their sustainability development. 3. Nike has customizable products for the customers. Figure 1: SWOT Analysis (Source: Macekura, 2013, pp 128) Strengths Extensive Product Portfolio: Under Armour makes a plan for expanding their product offerings in the additional market segments. Innovation: Under Armour focus on fulfilling the changing needs of the recreational industries by implementing new innovative technologies. They bring new creative thoughts for manufacturing their products, which include HotGear, ColdGear, and AllSeasonal Gear. Financial Consistency: Under Armour accomplished, a successful revenue growth for the last five years and their net income become triple from 2006 to 2011. Weaknesses Geographically not diverse: While shifting into different geographical areas it makes Under Armour to minimize risk related to the sales from a single geographical location and to diversify the product offerings (Baylis, Wirtz Gray, 2013). Expansion of manufacturing: The development on the part of specialty fabrics manufactured by the third parties enhances the risk with Under Armours primary competencies. Failure Impact on Sales/ Endorsement Success: As Under Armour depends on different competitive products for marketing it creates uncertainty and risk related to the social behavior of the athletes as well as their performance. Opportunities Positive Outlook for Footwear Market and Athletic Apparel: This has been a progressive growth in the revenue, which results in industry growth and which will increase the footwear sales as well as sales of athletic apparel in the next five years. Technology based: With the advancement in technology, the direct to consumer sales are growing in Under Armour and which helps the customers to connect quickly with the company (Macekura, 2013). Threats Fluctuating cost of petroleum: The cost of oil is affecting the revenues and production cost of the athletic apparel because those products contain a significant amount of petroleum-oriented textiles and polyesters. The high cost of labor: Due to the rapid rise in the labor cost of manufacturing athletic apparel, this labor cost is bringing serious threats on the Under Armour Company. Low Batteries to Entry: As the suppliers of athletic apparel have dynamic control over the price, they can easily put a limit on the market share related to the existing companies (Johnson, 2014). According to the reports, the companys financial status of 2013 was as follows, Net Revenue in $ - $2.33 billion Net Profit in $ - $162.17 million Net Profit percentage (Net Profit / Net Revenues x 100) - 6.96% The cash equivalent of the company the end of the year 2013 was $347 million (Hitt, Ireland Hoskisson, 2012). The four categories are Apparel, Footwear, Accessories, and licensing, contribute in a significant way to the Net Revenue of the company in the year 2013. The contribution to the net income from the Apparel category is 75.6% whereas contribution from Footwear is 13%. The rest of the input is from Accessories and Licensing, which are 9% and 2.4% respectively (Reddy, 2015). References Adam, A. (2016).Under Armour Case Study. Retrieved 20 February 2016, from https://robertdaigle.com/wp-content/uploads/2014/01/BowenDaigleDionValentine_UnderArmour_CaseStudy.pdf Baylis, J., Wirtz, J. J., Gray, C. S. (2013).Strategy in the contemporary world. Oxford University Press. Hitt, M., Ireland, R. D., Hoskisson, R. (2012).Strategic management cases: competitiveness and globalization. Cengage Learning. Johnson, C. (2014). Under Armours Unexpected Brand Management Problem in Sochi. Macekura, S. (2013). The point four program and US international development policy.Political Science Quarterly,128(1), 127-160. Miloch, K. S., Lee, J., Kraft, P. M., Ratten, V. (2012). Click clack: examining the strategic and entrepreneurial brand vision of Under Armour.International journal of entrepreneurial venturing,4(1), 42-57. Reddy, K. S. (2015). Institutional Laws, and Mergers and Acquisitions in India: A Review/Recommendation. Thompson, A., Peteraf, M., Gamble, J., Strickland III, A. J., Jain, A. K. (2013).Crafting Executing Strategy 19/e: The Quest for Competitive Advantage: Concepts and Cases. McGraw-Hill Education.