Under Armour Is Gaining Market Share And Challenging Nike

As a chief at Smitheford I have been solicited to address the issue from stock and cost of that stock. Keeping in mind the end goal to address cost and measure of stock we should comprehend different factors first. One thing to consider before changing any stock level is how much stock we have, at that point how quick it is turned over. How about we take the item Ultamyacin has a yearly interest for this item that is at the 400,000 unit level. It is assumed that it offers at a rate of 100,000 for each quarter however imagine a scenario in which there are times during the time that are less or more. Amid a change in deals do you keep on manufacturing at a similar rate or do you moderate creation amid those circumstances and increment amid other

This causes more trade debt, which means a higher the tax penalty. Furthermore, age of payables has increased from 98 to 154 days, nearly tripling over the last four years. This is damaging to the image and trustworthiness of the company, even causing issues from the bank trusting them with grant of loan. Having a large amount of inventory can conclude additional problem involving cost of capital, maintenance cost, aging inventory and the cost of space or storage. This therefore proves the poor management skills that are required to operate a booming and profitable business.

Under Armour was founded in 1996 by Kevin Plank , a then 23-year old former special team’s captain of the University of Maryland football team. Plank initially began the business from his grandmother 's basement in Washington, D.C. As a fullback at the University of Maryland , Plank got tired of having to change out of the sweat-soaked T-shirts worn under his jersey; however, he noticed that his compression shorts worn during practice stayed dry. This inspired him to make a T-shirt using moisture-wicking synthetic fabric. After graduating from the University of Maryland , Plank developed his first prototype of the shirt, which he gave to his Maryland

Nike and Under Armour are two of the biggest brands in the active wear industry. Fitness goers of all ages and genders are passionate users of their sports gear and athletic clothes. Two print advertisements from Under Armour and Nike will be analyzed based on the way they use goals to captivate the viewers attention and elicit an emotion to persuade the viewer to buy their athletic wear. In a world that is quickly becoming aware of its health problems consumers are becoming more aware of fitness brands and their advertisements. People are taking an active stand in achieving their fitness aspirations and doing so with the best equipment available. Nike’s famous “Just do it” slogan has been a boost for the company’s reputation and notoriety, by setting it a part from other brands. The two advertisements from Nike and Under Armour are representations of current consumer ambitions towards fitness.

Under Armour focuses primarily on producing three different lines of clothing (COLDGEAR wit’s cold, HEATGEAR, and ALLSEASONGEAR) along with three different types of fit. In 2011 as the company looked into expanding its brand, it started manufacturing shoes and accessories for all main sports while incorporating the microfiber technologies to them—which gave the company a significant competitive advantage in the high performance apparel market.

With this company the inventory management ratios further indicate that there may be an issue with inventory and inventory controls. The inventory turnover ratio is lower than the industry average and the days’ sales in inventory are high. A company wants to turn inventory quickly to reduce storage costs, and

The company has been functioning well in terms of generating profit and demand so far. However, there will be a 20% increase in demand for the next month of operations as predicted by management, and the production and supply management's problems may come as a problem they can no longer afford.

The company is looking to increase profitability and find a long-term solution to the inventory problem.

Support: The inventory increase in 1997, YOY, was 58%. Additionally, the COGS to revenue ratio reduced from to 72% in 1997. This combination of increase in inventory and reduction in COGS as a percentage of revenue seems to indicate that the fixed costs may have been spread over a larger base through over production, thereby causing the COGS to reduce. This may be a cause for concern and could be a potential red flag.

a. Under Armour’s approach towards innovation is very unique, they think and plan out their projects thoroughly in order to create a one of a kind product that could be appealing to their consumers. The company has been extremely progressive throughout the years in order to stay ahead of the other competitive companies in their targeted industry. By constantly updating and coming up with different product lines, such as compression shirts and cleats, Under Armour is able to compete with other top athletic wear company’s in their market. If

two companies in 2008. It designs, manufactures, markets and distributes a large range of high tech leisurewear and

Most if not all of Under Armour’s specialty fabric products are developed by third party manufacturers. The source of the fabric is in the possession of manufacturers from suppliers and pre-approved by the company. The company does not own any of the fabric patents that they use to produce their technology/materials. The average lifetime of a patent runs about roughly twenty years, by then, technology will already be implemented by multiple firms and producing it become relatively cheap. In addition, Under Armour’s rival Nike has already jumped the gun by producing products incorporated by technology. The upside that UA has is that they applied for few patents / designs in the past two years and they hope to apply for more in the future. By doing so, UA can potentially enter the market with more confidence while alleviating future threats. Furthermore, UA now owns several trademarks in order to leverage the use of brand building/marketing, because we all know trademarks last longer compared to patents.

Under Armour is currently one of the leading companies in the sports apparel industry whose mission is to “Make all athletes better through passion, science, and the relentless pursuit of innovation”.1 When Under Armour first broke into the sports apparel industry it was a disruptive pioneer that initially made the two giants, Nike and Adidas, a little weary. Under Armour revolutionized the sports apparel industry by creating apparel that used synthetic materials as an alternative to natural fibers, such as cotton, or other materials, such as polyester. This all-important switch to these materials resulted in a 2“shirt that provided compression and wicked perspiration off your skin rather than absorb it. A

* Accounts payable for CAC has gone up because of the purchase of more inventory without the corresponding demand for CAC’s products to justify the purchases of inventory. This resulted in the year-end sale to try and reduce inventory and reduce accounts payable.

The company I am presenting is Nike which was founded in 1965 by the athlete Phil Knight. Nike is a well known brand which is selling its products worldwide and has 36% of the market share.