Under Armour Case Competitive Analysis, Essay Example

Threat of new entrants: moderate

Existing customers of Under Armour have a strong brand loyalty. Starting up a new business requires a large sum of investment, and the competitive clothing and apparel market is not favorable for most investors. However, companies that can quickly create a brand identity and communicate a positive message can succeed in gaining market share over the brand. The unique technology and the research behind product development, however, provides Under Armour with a competitive advantage, and the cost of developing a better performing performance apparel is high. Companies would need to start off with a low return on investment (ROI) project. However, the performance apparel industry is rapidly growing.

Threat of substitute products: low

The threat of substitute products is weak. The performance apparel industry serves a narrow niche, and companies that have already proven that they can design and develop products that athletes and outdoor lovers can use to increase performance have a positional advantage. The high research and development costs that are associated with the industry create a barrier for clothing and sports apparel companies to develop specialized performance enhancing products. Those who take sports seriously will not settle with general, less specific products.  Cheaper sports shoes can be suitable for casual sporting events and jogging, but the new generation of sports enthusiasts values innovative technologies offered by Under Armour.