Reference no: EM133085868

What can you conclude based on the swot analysis below? How can Under armour improve? Analyze with details. 

Weaknesses

1. Limited International Presence - The company is still relatively new and has a limited international presence. Its North American branches provide 83 percent of its revenue, making it completely reliant on the American market. In international markets, it has yet to expand and produce the same revenue.

2. Significant Investment Expenditure - With its high investment expenditure over the last three years, Under Armour has taken a risk. It spent $847, 477,000 and $153, 312,000 in the last two years, respectively. Its 2017 restructuring plan has increased spending, with additional costs to come.

3. Poor Expansion Strategies - Under Armour made the mistake of focusing on direct-to-consumer sales as a long-term growth prospect rather than internet sales. The corporation put money into new outlets, including a flagship in New York, but later backed out of the contract.

Strengths

1. Under Amour's vast product line has bolstered the company's position. The corporation is not reliant on a single product. Its establishment has expanded beyond footwear to include garments, accessories, and other items. The wide range of products removes the possibility of failure. It also ensures a high sales ratio and the company's continued growth.

2. Adoption of Digital Apps - With apps like MapMyFitness, MyFitnessPal (calorie and nutrition app), and Endomondo, Under Armour has embraced digital transformation (fitness app maker). This has increased its revenue potential, allowing it to diversify its resources and continue to alter the industry.

3. E-Commerce Adoption - Under Armour recently declared that it will speed up the digitization of its sales channels. Its transition efforts will begin in the summer of 2020, with the introduction of a new e-commerce site in North America. This follows the EMEA region's successful trial of a reduced version of the site.

Opportunities

1.Introduce New Products - Under Armour is known for its innovative products. Since its inception, the products it has created have been technologically advanced. This provides it the clout to keep up the practice of offering superior products with minor tweaks.

2. Collaboration - Under Armour began collaborating with retailers like Kohl's in 2017, when Kohl's began selling its products. According to Kevin Marshall, CEO of Kohl's, the collaboration was a success. While several well-known department stores, such as Dillard's and Macy's, carry Under Armour, others, such as J. C. Penney, do not. Under Armour should seek more collaborations and partnerships in the future to expand its market share and revenue.

3. International Markets - There is a lot of room for Under Armour to grow its sales and gain new clients in international markets.

Threats

1. Political Polarization - The corporation was recently embroiled in a debate over the Trump administration. Kevin Plank, the CEO of Kevin Plank, initially supported President Trump until withdrawing after his acts caused public outrage. In the face of political polarization, the company's operating capabilities has been jeopardized by the dispute.

2. Increased Competition - Its main competitors, Nike and Adidas, have a stronger brand and have more international operating experience. This has helped them build a stronger consumer base, which may pose a future danger to Under Armour's ability to operate.

3. Market Uncertainties - Recent events have wreaked havoc on Under Armour's profits. Its net revenue decreased 41% to $707.6 million in the quarter ended June 30, while wholesale business revenue declined 58% and direct-to-consumer sales fell only 13%. If the uncertainty continues, Under Armour will suffer even more losses.