Case 5: UNDER ARMOUR

1.What is your assessment of the strength of competitive pressures stemming from rivalry among Under Armour, Nike and Adidas-Reebok?

The Rivalry among competing sellers of sporting goods such as Under Armour, Nike, and Adidas-Reebok is strong and likely to intensify. The rivalry among sporting good sellers of energy will keep growing and will become stronger in coming years. Under Armour. Nike, and Adidas-Reebok have similar or competing product offerings and that is why competition among them is so high. If these companies want to stay in business they need to come up with different strategies that will set them apart from the opposition. Competition is intense and revolves around performance, …show more content…
These suppliers have sufficient bargaining power to influence the terms and conditions of supply in their favor. Some of Under Armour`s suppliers are commodities and thus are subject to price fluctuations. Under Armour has petroleum-based material products and this has affected the company because the petroleum industry has experienced significant swings in price and relative obtainability in recent months and years. Under Armour has a weak position towards its suppliers because seventy to seventy-five percent of the fabric used in its products comes from the only six suppliers the company has. Under Armour is very sensitive to the actions of suppliers rising or lowering prices and as a result they bargain more aggressively.

5. What is your assessment of the strength of competitive pressures stemming from the buyers of performance sports apparel in North America?

Buyers can limit industry profitability by demanding price concessions, payment terms and services that increase industry members’ costs. At the same time it is important to understand that not all buyers from the same industry have the same degree of bargaining power with sellers, and some may be more sensitive to price, quality or service than others. Under Armour has developed unique products that consumer’s value and that set them apart from the competition. The profit potential of industry members is limited by the buyer price