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UNDER ARMOUR: THE DECADE OF GROWTH AND THE THREE YEARS OF CHALLENGES

 Once upon a time, Kevin Plank, the founder, experienced the discomfort of sweaty t-shirts while playing sports. He envisioned a compression t-shirt made of innovative material that would keep sweat away, and that's how Under Armour was born in 1996. Within the first two years, they secured deals with college and NFL teams, leading to impressive sales growth.

In 2000, sales skyrocketed 5x, as Under Armour became an authorized supplier to all major American sports leagues. By 2003, they introduced Under Armour women's line and crossed $100 million in sales. The company's growth was a testament to Kevin Plank's dedication and hard work.

Under Armour's first major advertising campaign, "Protect This House," launched in 2003, further boosting sales. In 2005, they added golf to their lineup and went public through an IPO, marking the beginning of their decade of growth.

From 2005 to 2010, Under Armour's revenue surged from $281 million to over $1 billion. They introduced various product lines and experienced considerable success, all while competing with giants like Nike and Adidas. During this time, Under Armour made significant acquisitions, like MapMyFitness, MyFitnessPal, and Endomondo, to expand their offerings and compete in the digital fitness market.

However, the challenges began to emerge in 2016. They faced tough competition, and their net income started to decline. The company's focus on athlete endorsements, especially with NBA star Stephen Curry, received mixed reactions, and there were some negative perceptions regarding the brand among the youth.

Under Armour's attempt to enter the mass market by selling products through Kohl's and other retail chains also backfired, damaging their brand perception. The market survey showed a decline in teens' preference for Under Armour products and shoes.

Moreover, the company faced internal issues, including supply chain problems with Curry's sneakers, heavy debt, and operational restructuring.

The combination of external and internal challenges resulted in a decline in net income, stock value, and overall brand perception.

The way forward for Under Armour lies in revitalizing its brand image and focusing on product innovation, marketing, and sales. They need to regain the challenger status and rekindle their reputation as a hip and innovative brand.

Key Takeaways:

  1. Stay ahead of the market curve and competitors. Always ask, "Then what?" and keep innovating.
  2. Balancing the inside (operations) with the outside (product, distribution, and sales) is crucial for sustained success.
  3. Brand perception and product excellence should be top priorities to win customers' hearts and loyalty.

Under Armour's story serves as a valuable lesson, and by addressing their challenges strategically, they can return to the path of growth and success. As entrepreneurs, we must learn from such case studies and adapt our approaches to build successful businesses.

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