Harvard Case - Under Armour's Willful Digital Moves
"Under Armour's Willful Digital Moves" Harvard business case study is written by Meghan Murray, Mina Saghian. It deals with the challenges in the field of Marketing. The case study is 5 page(s) long and it was first published on : May 18, 2016
At Fern Fort University, we recommend Under Armour to continue its digital transformation strategy, focusing on a multi-pronged approach that leverages data-driven marketing, personalized customer experiences, and a strong focus on innovation. This strategy should prioritize customer engagement, building a robust community, and expanding into new markets while maintaining a strong commitment to brand integrity and sustainability.
2. Background
Under Armour, a leading athletic apparel brand, found itself facing significant challenges in the late 2010s. The company's growth had slowed, and its traditional marketing strategies were losing effectiveness. Kevin Plank, the founder and CEO, recognized the need for a digital transformation to re-energize the brand and reach a new generation of consumers.
The case study focuses on Under Armour's efforts to adapt to the changing landscape of consumer behavior, particularly the increasing reliance on digital channels for information and purchasing decisions. The company's efforts included:
- Investing in technology and data analytics: Under Armour developed a robust data platform to understand customer preferences and tailor marketing messages.
- Building a digital-first marketing strategy: The company shifted its focus to digital channels like social media, mobile apps, and e-commerce.
- Embracing innovation: Under Armour launched new products and services like connected fitness apps and personalized training programs.
3. Analysis of the Case Study
SWOT Analysis:
Strengths:
- Strong brand recognition and loyal customer base
- Innovation in product development and technology
- Strong focus on performance and athleticism
- Growing presence in digital channels
Weaknesses:
- Dependence on traditional retail channels
- Limited global reach compared to competitors
- Potential for brand dilution with diversification
- High marketing and operational costs
Opportunities:
- Expanding into new markets, particularly in Asia and emerging economies
- Leveraging data analytics for personalized marketing
- Partnering with influencers and athletes for brand promotion
- Developing innovative products and services in the connected fitness space
Threats:
- Intense competition from established players like Nike and Adidas
- Changing consumer preferences and trends
- Economic fluctuations and global uncertainties
- Potential for brand damage due to ethical or sustainability concerns
Porter's Five Forces Analysis:
- Threat of new entrants: High due to the low barriers to entry in the apparel industry.
- Bargaining power of buyers: Moderate, as consumers have multiple choices and can easily switch brands.
- Bargaining power of suppliers: Moderate, as Under Armour relies on a network of suppliers for materials and manufacturing.
- Threat of substitute products: High, as consumers can choose from a wide range of athletic apparel and footwear.
- Competitive rivalry: Very high, as the athletic apparel market is dominated by a few large players.
Marketing Mix (4Ps):
- Product: Under Armour's product strategy focuses on innovation and performance-driven apparel and footwear. The company is constantly developing new technologies and materials to enhance athletic performance.
- Price: Under Armour's pricing strategy is competitive, but it positions itself as a premium brand. The company offers a range of price points to cater to different customer segments.
- Place: Under Armour's distribution strategy includes both online and offline channels. The company has a strong presence in major retailers and has also invested in its own e-commerce platform.
- Promotion: Under Armour's marketing strategy is heavily focused on digital channels, including social media, mobile apps, and influencer marketing. The company also uses traditional marketing channels like television advertising and sponsorships.
Consumer Behavior Analysis:
Under Armour's target market is primarily young, active individuals who are interested in fitness and athletic performance. The company's digital marketing efforts are designed to reach these consumers where they spend their time online. The company uses data analytics to understand customer preferences and tailor its marketing messages accordingly.
4. Recommendations
- Strengthen Digital Marketing Strategies: Under Armour should continue to invest in data-driven marketing, using AI and machine learning to personalize customer experiences. This includes:
- Targeted advertising: Leverage data to deliver highly relevant ads across various digital platforms.
- Personalized content: Create engaging content tailored to individual customer preferences and interests.
- Personalized recommendations: Utilize data to suggest products and services that align with customer needs and purchase history.
- Build a Strong Community: Foster a sense of belonging and loyalty by creating a thriving online community. This can be achieved through:
- Social media engagement: Actively engage with customers on social media platforms, responding to comments and questions and hosting interactive contests.
- Influencer partnerships: Collaborate with relevant influencers to reach new audiences and generate authentic content.
- User-generated content: Encourage customers to share their experiences and stories with the brand.
- Expand Global Reach: Target new markets with a focus on emerging economies and culturally relevant campaigns. This involves:
- Market research: Conduct thorough market research to understand the needs and preferences of consumers in new markets.
- Localized marketing: Adapt marketing messages and campaigns to resonate with local cultures and values.
- Strategic partnerships: Collaborate with local businesses and organizations to expand distribution and build brand awareness.
- Embrace Sustainability: Under Armour should prioritize sustainability in its operations and product development. This includes:
- Environmentally friendly materials: Utilize sustainable materials and manufacturing processes to reduce environmental impact.
- Ethical sourcing: Ensure that suppliers adhere to ethical labor practices and environmental standards.
- Transparency and accountability: Communicate sustainability initiatives and progress to customers in a transparent and accountable manner.
- Innovation and Product Development: Continue to invest in research and development to create innovative products and services that meet evolving consumer needs. This includes:
- Connected fitness: Develop new technologies and services that enhance the connected fitness experience.
- Personalized training: Offer personalized training programs and coaching services tailored to individual goals and preferences.
- Sustainable apparel: Develop sustainable apparel and footwear options that meet the needs of environmentally conscious consumers.
5. Basis of Recommendations
These recommendations are based on a thorough analysis of Under Armour's strengths, weaknesses, opportunities, and threats, as well as an understanding of the evolving consumer landscape. They are aligned with the company's mission to empower athletes and are designed to drive long-term growth and profitability.
Core competencies and consistency with mission: These recommendations align with Under Armour's core competencies in product innovation, technology, and marketing. They also support the company's mission to empower athletes by providing them with the tools and resources they need to achieve their goals.
External customers and internal clients: The recommendations are designed to improve the customer experience and build stronger relationships with external customers. They also aim to empower internal clients, such as employees and partners, to contribute to the company's success.
Competitors: The recommendations are designed to help Under Armour stay ahead of the competition by leveraging its strengths and addressing its weaknesses. The company needs to differentiate itself from competitors by offering innovative products, personalized experiences, and a strong commitment to sustainability.
Attractiveness: The recommendations are expected to drive growth and profitability by expanding the customer base, increasing brand loyalty, and improving operational efficiency. The company can measure the success of these initiatives through key performance indicators (KPIs) such as revenue growth, customer acquisition cost, customer lifetime value, and brand awareness.
Assumptions:
- Consumers will continue to embrace digital channels for information and purchasing decisions.
- Under Armour will continue to invest in technology and data analytics.
- The company will be able to develop innovative products and services that meet evolving consumer needs.
- The global economy will continue to grow, providing opportunities for expansion.
6. Conclusion
Under Armour's digital transformation is a critical step in ensuring the company's long-term success. By embracing data-driven marketing, building a strong community, expanding into new markets, and prioritizing sustainability, Under Armour can position itself for continued growth and profitability in the competitive athletic apparel market.
7. Discussion
Alternatives:
- Focusing solely on traditional marketing channels: This approach would be less effective in reaching the target market and could lead to declining sales.
- Ignoring the importance of sustainability: This could damage the brand's reputation and alienate environmentally conscious consumers.
- Failing to invest in innovation: This could lead to a decline in product competitiveness and market share.
Risks:
- Technology disruptions: Rapid changes in technology could render current investments obsolete.
- Data privacy concerns: Data breaches or misuse of customer data could damage the brand's reputation.
- Competition from new entrants: New players in the market could disrupt the industry with innovative products or services.
Key Assumptions:
- The recommendations assume that Under Armour will be able to effectively implement its digital transformation strategy.
- The company needs to ensure that it has the necessary resources, expertise, and infrastructure to support these initiatives.
- The recommendations also assume that consumers will respond positively to Under Armour's efforts to build a strong community, expand its global reach, and prioritize sustainability.
8. Next Steps
- Develop a detailed implementation plan: This plan should outline specific actions, timelines, and resources required for each recommendation.
- Invest in technology and data analytics: Under Armour should continue to invest in its data platform and develop new tools and technologies to support its digital marketing efforts.
- Build a strong team: The company needs to recruit and retain talented individuals with expertise in digital marketing, data analytics, and customer experience.
- Monitor progress and make adjustments: Under Armour should regularly track key performance indicators (KPIs) to measure the success of its initiatives and make adjustments as needed.
By taking these steps, Under Armour can successfully navigate the evolving landscape of the athletic apparel market and achieve its long-term growth objectives.
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Case Description
In 2013, Under Armour had $2.3 billion in sales yet only $500 million came from its women's apparel, and the company was ready to expand into the female market segment. The "I Will What I Want" global women's marketing campaign was the largest Under Armour had ever run. Founder Keven Plank and his team launched the campaign on a mulitchannel platform, with social media at its core. The campaign's success surpassed what Plank had imagined, and he is left wondering where to take Under Armour's advertising and marketing next. This case has been used successfully in a marketing course and would be suited for any class with a focus on interactive media, technology, and multichannel marketing.
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