Under Armour Isn’t Here to Take Part, It’s Here to Take Over

I recently came across Edwin Chan’s blog about the profit-maximizing business strategy implemented by several sportswear companies. There’s no denying that a sustainable, well-executed plan that can ensure product quality and consistent innovation is the foundation of any successful business. However, I can’t help but disagree with the notion that all it takes for a company to achieve growth and gain market share is a great strategy.

For the sake of argument, I’ll also point to the sportswear industry. Contrary to Edwin’s opinion, I believe that endorsement and advertising is still the name of the game. Take Under Armour for example. The success of the rapidly growing American sportswear company can be largely attributed to its staggering collection of sponsored athletes. With talent like NBA MVP Stephen Curry; NFL MVP Cam Newton; MLB MVP Bryce Harper; top-five PGA golfer Jordan Spieth; and (maybe with some bias) the greatest quarterback of all time, Tom Brady; Under Armour has won the endorsement lottery to say theunder-armour-athletes_large least.

These athletes account for a hefty amount on Under Armour’s payroll, and for good reason. In today’s world, it is essential to try to stand out and emerge from sea of advertisement consumers are bombarded with everyday, and these athletes effectively act as the face of the company. When people see these athletes and their accomplishments, they naturally associate the brand with them. I still remember when all my friends had LeBron James’ shoes in Grade 7. We didn’t care about the quality of the shoes and we definitely didn’t compare them to other brands. The only thing that mattered was LeBron wore them in games, and us, as fans, loved having the same shoes as him.

epa04953677 Jordan Spieth of the US lifts the TOUR Championship trophy and the FedEx cup during the trophy presentation after winning the TOUR Championship and FedEx Cup final at East Lake Golf Club in Atlanta, Georgia, USA, 27 September 2015. EPA/TANNEN MAURY

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Similarly, whenever customers spot an Under Armour product, their first reaction would be, “Hey, those are Steph Curry’s shoes!” or, “I’ve seen Cam Newton wear that hoodie!” This initial connection with the brand cannot be underestimated. Not only does it create word of mouth, but also automatically put fans of the athlete into the loyalty loop. As expected, the results have been spectacular. For example, the Curry basketball line helped Under Armour increase their footwear sales by a staggering 58% from the year before.

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Many sneakers today bear striking similarities.

Another important point to note would be the mystique quality holds. In a time where information and technology spreads at an astonishing speed, competitive advantages become increasingly transient and we start to see more and more points of parity between businesses – it is simply too easy to mimic a successful product. Therefore, it puts an even greater emphasis on endorsements and with their dream team of athletes; Under Armour has certainly put the sportswear industry on notice.

Word count: 441

Sources:

Edwin’s blog: https://blogs.ubc.ca/edwinchan/2016/10/30/blog-post-4-sportswear-companies-model-for-success/

Steele, Anne. “Under Armour Revenue Growth Continues.MarketWatch. N.p., 26 July 2016. Web. 13 Nov. 2016.

https://andykomara.com/2014/05/31/andys-desk-adidas-element-refine-tricot/

http://www.fool.com/investing/general/2016/03/30/5-reasons-under-armour-could-blow-q1-expectations.aspx

http://www.kicksonfire.com/stephen-curry-under-armour-change/

http://www.seattletimes.com/sports/golf/jordan-spieth-wins-tour-championship-to-cap-huge-season/

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