Question
CASE #1 Growing Up , l|t all started with a simple plan to make a superior Pshirt. As special teams captain during the mid-1990s for
CASE #1 Growing Up
, l|t all started with a simple plan to make a superior "Pshirt. As special teams captain
during the mid-1990s for the University of Maryland football team, Kevin Plank hated
' " having to repeatedly change the cotton T-shirt he wore under his jersey as it became
wet and heavy during the course of a game
He knew there had to be a better alternative
and set out to make it. After a year of fabric
and product testing, Plank introduced the
first Under Armour compression producta
synthetic shirt worn like a second skin under a
uniform or jersey. And it was an immediate hit!
The silky fabric was light and made athletes feel
faster and fresher, giving them, according to
Plank, an important psychological edge.
Today, Baltimore-based Under Armour
(UA) is a $1.4 billion company. In 16 years,
it has grown from a college start-up to a
"formidable competitor of the Beaverton,
Oregon behemoth" (better known as Nike).
The company has nearly 3 percent of the
fragmented U.S. sports apparel market and
sells products from shirts, shorts, and cleats to underwear. In addition, more than 100 univer-
sities wear UA uniforms. The company's logoan interlocking U and Ais becoming almost
as recognizable as the Nike swoosh. Starting out. Plank sold his shirts using the
only advantage he hadhis athletic connections. "Among his teams from high school, military school,
and the University of Maryland, he knew at least 40 NFL players well enough to call and offer them the shirt " He was soon joined by another Maryland player. Kip Fulks, who played lacrosse. Fulks used the same "six-degrees strategy" in the lacrosse world. (Today, Fulks is the company's COO.) Believe it or not, the strategy worked. UA sales quickly gained momentum. However, selling products to teams and schools would take a business only so far. That's when Plank began to look at the mass market. In 2000, He made his first deal with a big-box store, Galyan's (which was eventually bought by Dick's Sporting Goods). Today, almost 30 percent of UA's sales come from Dick's and The Sports Authority. But they haven't forgotten where they started, either. The company has all-school deals with 10 Division 1 schools.
"Although these deals don't bring In big bucks, they deliver brand visibility..."
So, what's next for Under Armour? At the end of 2011, revenues had increased 38 percent over
the prior year. Sustaining those growth rates will be a challenge. Some potential growth areas include women's apparel, which only make up 25 percent of the company's apparel sales; footwear, which makes up only 12 percent of corporate sales, but only 1 percent of the $14 billion U.S. athletic footwear market; and global sales, which right now are only 6 percent of revenue. A telling sign of the company's philosophy is found over the doors of its product design studios: "We have not yet built our defining product."
What examples of corporate strategies do you see in this mini-case?
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