Under Armour, Inc. (UA): Business Model Canvas

Introduction

When it comes to the athletic apparel and footwear industry, it's hard to ignore Under Armour, Inc. Their premium pricing strategy has proven successful in targeting both athletes and fitness enthusiasts alike. As the global market for athletic apparel and footwear continues to grow, Under Armour has managed to stay ahead of the competition by diversifying their product line, investing in research and development, and engaging customers through digital marketing campaigns and collaborations with professional athletes.

According to Statista, the global athletic footwear market is expected to reach a value of $95.14 billion by 2025, growing at a CAGR of 5.1% from 2020 to 2025. As for athletic apparel, the global market size was valued at $167.7 billion in 2019 and is expected to reach $248.1 billion by 2026, growing at a CAGR of 5.2% from 2020 to 2026. With such promising growth in the industry, it's clear that Under Armour's strategic approach to their business model will continue to yield positive results.

• Global athletic footwear market expected to reach $95.14 billion by 2025
• Global athletic apparel market expected to reach $248.1 billion by 2026

Now let's take a closer look at how Under Armour's business model canvas helps them maintain a strong position in the market.

Key Partnerships

Under Armour, Inc. (UA) operates in a highly competitive industry, and as such, requires mutually beneficial partnerships to remain competitive and efficiently achieve its business objectives. The following are key partnerships that UA has established:

• Suppliers: Since UA relies on manufacturing high-quality products, it has established partnerships with key suppliers for raw materials and components. The suppliers provide raw materials, such as fabrics, chemicals, and dyes, used in the production of UA’s products.
• Retailers: UA partners with various retailers worldwide to sell its products, including department stores, athletic stores, sporting goods stores, and online retailers. Partnership with these retailers ensures that UA’s products are easily accessible to its customers, giving it a competitive edge.
• Athletes and Celebrities: UA has brand ambassadors which includes high-profile athletes and celebrities, such as Steph Curry, Misty Copeland, and Dwayne “The Rock” Johnson. Partnership with these public figures reinforces UA’s brand image and increases its visibility.
• Technology Companies: UA has established partnerships with technology companies, such as IBM Watson and MapMyFitness, to help it monitor, analyze and improve customer data. This partnership enables UA to provide personalized products and services to its clients, thus increasing customer satisfaction.
• Manufacturers: UA partners with manufacturing companies, both domestic and international, to produce high-quality products. These manufacturers have the necessary technology, workforce, and expertise needed to produce UA's products to the desired specifications, ensuring that the products meet the high standards of quality and durability.

Through these various partnerships, Under Armour, Inc. is able to leverage their expertise to meet their customers' needs and stay ahead of the competition. The key partnerships, when sustained and nurtured, provide a strong foundation for successful business growth and continuity.

Key Activities

Under Armour, Inc. (UA) engages in several key activities to sustain its business model. These activities are essential to achieve the company's goals and objectives. Some of the key activities of UA are as follows:

• Design and Development: UA continuously designs and develops new products that incorporate innovative technologies to meet the changing needs of consumers. The company invests heavily in research and development to stay ahead of its competitors.
• Manufacturing: UA outsources its manufacturing operations to third-party suppliers mainly situated in Southeast Asia. The company has established strong relationships with its suppliers to ensure that they meet the quality standards of UA's products.
• Sales and Marketing: UA focuses on direct-to-consumer sales through its website and retail stores, besides selling through third-party retailers. The company spends a significant amount on marketing campaigns and collaborations to enhance its brand awareness and image.
• Distribution: UA has a well-established global distribution network that ensures that its products are available to consumers worldwide. The company uses a combination of its warehouses and third-party logistics partners to deliver products to its customers.
• Customer Service: UA values its customers and ensures that they are satisfied with its products and services. The company has a customer support team that helps customers with their queries, complaints, and feedback. The team operates through various channels like phone, email, chat, and social media platforms.
• Supply Chain Management: UA manages its supply chain strategically to ensure that it delivers quality products on time to its customers. The company uses advanced technologies like sensors and analytics to monitor its inventory levels, track shipments, and forecast demand.

Key Resources

Under Armour, Inc. relies on several key resources to deliver its products and services to customers. These resources include:

• Intellectual Property: Under Armour's patents, trademarks, and copyrights form the basis of their brand and provide legal protection for their products and services.
• Human Resources: Under Armour's leadership team, employees, and contracted workers are vital for the company's growth and success.
• Technology: Under Armour invests significant resources into research and development to deliver innovative products that meet the needs of their customers. This includes proprietary technologies such as UA Tech™ fabric, which wicks away sweat and dries quickly.
• Manufacturing: Under Armour relies on manufacturing facilities to produce their products efficiently and at scale. They work with suppliers to procure materials and manage their supply chain to ensure timely delivery of products.
• Branding and Marketing: Under Armour invests heavily in marketing their products and building brand recognition through events, sponsorships, advertising, and social media campaigns. They also partner with retailers to sell their products through wholesale channels.
• Financial Resources: Under Armour's financial resources, including funding from investors, revenue streams, and cash reserves, support their operations and enable them to invest in growth opportunities.

Value Propositions

Under Armour, Inc. (UA) aims to provide its customers with high-quality athletic wear and gear that enhances their performance and supports a healthy and active lifestyle. The following are the value propositions that UA offers to its customers:

• Performance-Enhancing Products: UA's products are designed to improve the performance of athletes by offering features such as moisture-wicking, compression, breathability, and flexibility. Such features allow athletes to focus on their performance without being limited by their apparel or gear.
• Innovative Design: UA's products are designed with innovation and new technology in mind. UA invests heavily in research and development to create cutting-edge products that provide its customers with the latest advancements in athletic apparel and gear.
• Brand Recognition: UA has built a strong brand reputation over the years. Its brand is associated with high-quality, performance-enhancing products that are trusted by athletes worldwide. This has helped UA build a loyal customer base that is always looking for new products from UA.
• Diverse Product Range: UA offers a wide range of products that cater to different sports and activities. The company offers products for running, basketball, golf, football, yoga, and many other sports. This allows UA to cater to a broad customer base and provide specialized products for different sports and activities.
• Customer Support: UA provides excellent customer support to its customers. The company has a customer support team that is available 24/7 to answer customer queries and provide assistance. In addition, UA offers an easy return policy, which allows customers to return products easily if they are not satisfied with them.

Overall, UA's value propositions are focused on providing its customers with high-quality, innovative, and performance-enhancing products that allow athletes to perform at their best. Additionally, the company's excellent customer support and brand recognition have helped it build a loyal customer base that trusts the UA brand.

Customer Relationships

Under Armour, Inc. (UA) strives to maintain and enhance customer relationships through various means:

• Personalization: UA understands that customers value personalized experiences, and thus, strives to personalize a customer’s experience with its products. Customers can design their own shoes and outfits on UA’s website, allowing them to create a unique product that meets their specific preferences.
• In-store Experience: UA’s retail stores offer an in-store experience that emphasizes customer service. UA employees are trained to assist customers with their purchases and offer personalized advice on products based on customer preferences and needs.
• Social Media: UA utilizes various social media platforms to engage with customers and build relationships. UA frequently posts workout videos, success stories and tips to keep customers motivated, and also allows customers to submit their own content.
• Customer Loyalty Programs: UA offers a customer loyalty program called UA Rewards, which allows customers to earn points on their purchases which can be redeemed for discounts on future purchases. Additionally, UA offers special promotions and discounts to UA Rewards members throughout the year.
• Quality Products: UA understands that customer relationships must be built on trust - trust that UA’s products will be of high quality and meet customer expectations. UA invests heavily in research and development to ensure that its products are of the highest quality.

Through these efforts, UA strives to build strong and lasting relationships with its customers, maintaining a loyal customer base that values UA’s commitment to quality and customer service.

Channels

Under Armour, Inc. (UA) uses a combination of direct and indirect channels to reach its consumers. The company has its own retail stores and e-commerce website, which provides a direct channel for customer engagement. Through these channels, UA offers its customers a range of products including apparel, footwear, and accessories.

• Retail Stores: UA operates its own retail stores in various locations. The company has over 400 stores globally. These stores are designed to offer customers a unique brand experience and provide a direct channel for UA to showcase its products.
• E-commerce Website: UA's e-commerce website is the company's primary platform for direct-to-consumer business. UA's website is user-friendly and offers a variety of products to customers
• Wholesalers: UA also sells its products through various wholesalers. This allows the company to expand its reach and access customers in different regions.
• Licensing Agreements: UA also has licensing agreements with other companies that manufacture and sell UA-branded products, such as fitness equipment and watches. This allows the company to reach new customers and expand its product offerings into different categories.
• Social Media: UA also uses social media channels to promote its brand and engage with customers. The company has a strong presence on social media platforms like Instagram, Facebook, Twitter, and YouTube, which allows them to connect with customers and promote their products.

Customer Segments

Target Customers: Under Armour, Inc. focuses on serving athletes and fitness enthusiasts of all ages and genders in the sports and fitness industries.

• Athletic Individuals: Under Armour caters to athletes and gym-goers who are looking for high-quality, performance-enhancing athletic clothing and accessories.
• Fitness Enthusiasts: The company also targets fitness enthusiasts who are looking for comfortable and stylish workout clothes and accessories that provide maximum performance.
• Youth: Under Armour has a strong focus on attracting young customers who are interested in sports and fitness, particularly for school-sponsored sports teams and leagues.
• Professional Athletes: Under Armour also caters to professional athletes by offering custom-made gear and apparel designed to meet their specific needs and performance goals.

Customer Segments:

• Individual Consumers: Under Armour's primary customer segments are individual consumers who purchase their products for personal use. These customers can range from professional athletes to recreational fitness enthusiasts who want quality performance gear.
• Organizations: Besides individual customers, Under Armour also targets organizations like schools, gyms, and professional sports teams. The company offers these organizations customized solutions such as team uniforms and fitness performance programs which help to further increase brand loyalty and spread brand awareness.
• Retailers: Apart from selling products directly to consumers, Under Armour also targets retailers such as sporting goods stores and department stores that are interested in carrying their product line.

Under Armour targets customers who are interested in sports and fitness, producing products that focus on quality and performance. The company's customer segments include individual consumers, organizations, and retailers, and it caters to athletic individuals, fitness enthusiasts, and youth.

Cost Structure

Under Armour, Inc. (UA) has a cost structure that is primarily focused on the development and production of high-quality athletic apparel and accessories. The cost structure can be divided into two main categories: fixed costs and variable costs.

Fixed Costs

• Rent and Utilities: UA has multiple retail stores and offices around the world, and the cost of rent and utilities for these locations is a fixed cost.
• Salaried Employees: The company employs numerous salaried employees who work in various departments including manufacturing, research and development, and marketing.
• Marketing and Advertising: UA spends a significant amount of money on marketing and advertising campaigns to promote its brand and products.
• Research and Development: The company invests heavily in research and development to continuously improve its products and stay ahead of competitors.

Variable Costs

• Cost of Goods Sold (COGS): The cost of materials, labor, and manufacturing overhead needed to produce UA's products is the main variable cost incurred by the company.
• Shipping and Handling: UA incurs variable costs in shipping and handling of its products to customers and retail stores.
• Commissions and Royalties: The company pays commissions and royalties to endorsers and licensors based on sales of their products.

Overall, UA's cost structure is designed to ensure high quality products and effective promotion of its brand to customers worldwide.

Revenue Streams

Under Armour, Inc. generates revenue from several sources:

• Sales of Apparel and Accessories: Under Armour offers a wide range of sportswear, footwear, and accessories, which generate a significant part of its revenue. The company has an extensive distribution network that includes its own retail stores, e-commerce platform, and wholesale partners worldwide.
• Licensing Agreements: Under Armour has licensing agreements with various partners, including professional sports leagues, universities, and other organizations. The company earns revenue by licensing the use of its brand name and logos for different products.
• Connected Fitness: Under Armour's connected fitness platform, including its apps and wearable devices, helps users track their fitness and nutrition data. The platform offers both free and premium services, including personalized coaching and nutrition plans, which generate revenue for the company.
• Connected Footwear: Under Armour's HOVR line of connected footwear features sensors in the soles that track users' running data. This data can be synced with the company's connected fitness platform, generating revenue from the sale of the shoes and potentially from additional services in the future.
• Smart Apparel: Under Armour's smart apparel is designed with sensors that track users' performance data, including heart rate, breathing rate, and muscle activity. This data can be synced with the company's connected fitness platform, generating revenue from the sale of the apparel and potentially from additional services in the future.

Overall, Under Armour's revenue streams are diversified across its product lines, distribution channels, and services. The company continues to innovate and expand its offerings, which could lead to additional revenue opportunities in the future.

Conclusion

After analyzing and filling out the Business Model Canvas for Under Armour, Inc. (UA), it is evident that the company has a strong focus on innovation, product differentiation, and building a sustainable brand. UA's core values of passion, design, and innovation have allowed it to leverage its strengths as a sports performance brand and expand into new markets such as lifestyle products, women's apparel, and international markets.

The company's key partners include athletes, suppliers, distributors, retailers, and technology companies, which are essential in ensuring effective communication, production, and distribution of its products. UA's key resources include its intellectual property and patents, research and development, and marketing capabilities. UA's customer segments include athletes, fitness enthusiasts, active lifestyle consumers, and those seeking comfortable and durable apparel.

From a revenue stream perspective, UA primarily generates income through the sale of products, licensing arrangements, and selling through owned and operated retail stores. Finally, UA's cost structure revolves around marketing, supply chain, research and development, and general and administrative expenses.

Overall, UA has a sound business strategy that relies on product innovation and brand strength, which has allowed it to successfully compete with larger players in the sports apparel industry. UA's ability to continually adapt to new technologies, consumer preferences, and market trends will be essential in ensuring its long-term success and growth.