12. Under Armour
For knowing when to sacrifice and with who to overcommit
“We are the overachieving brand. We are the underdog brand. We are the ones that no one thought could do it. Nobody gave us the chance to be in this position, but we are, and we take that with great responsibility."
- Kevin Plank, Founder.
When it comes to the sports apparel market, we’re used to seeing two dominant players; number one being the industry giant Nike, and after recently overtaking Adidas, it is Under Armour who now occupy the number two spot. In the classic challenger role, although still only a fraction of the size of Nike, Under Armour are the brand with momentum, making $3 billion in sales last year and seeing a 30% increase in revenue throughout each quarter – double the rate of growth seen by Nike in their last quarter of 2014.
Product innovation has always been critical in Under Armour’s success. Since founder Kevin Plank launched the brand in 1996 with his sweat reducing t-shirt made of synthetic fibres, the brand has followed up with innovations that include a line of compression fit clothing to help muscles recover quicker, as well as created a revolutionary black fabric that doesn’t absorb heat from the sun. Under Armour, like Nike before them, are continually trying to find ways to improve performance for athletes through their product development.
Alongside their technological innovations, in order to continue to grow the brand, Under Armour are now attempting to position themselves as a lifestyle brand by leveraging sports and celebrity endorsements. They recently went head to head with Nike over a sponsorship deal with NBA star Kevin Durant, and just last year succeeded with a $25 million deal with tennis player, Andy Murray. Recognising that they don’t have the resources needed to compete directly with Nike in terms of sponsorship, they have had to be more selective; sacrificing having a broad range of stars on their roster and instead overcommitting to a smaller number of rising stars within the NBA and PGA world, who they are banking on becoming the next global mega stars.
It’s a high risk, potentially high return strategy, and one they will be hoping pays off. One of their most successful partnerships to date is with NBA star Stephen Curry. In 2013 Under Armour took a huge risk in sponsoring the player, who was often injured and out of form, yet this seems to have paid off, Curry has now led his team to a record breaking 67 wins. Could Stephen Curry do for Under Armour what Michael Jordan did for Nike back in 1985?
Despite being industry giants, Nike themselves have always tried to embody the underdog spirit, as suggested by Phil Knight in his famous quote “It’s alright to be Goliath but always act like David”, and more recently in their ‘Greatness ad’ in 2012 - we’re wondering if this battle will come down to a case of who can out-underdog who.
Source:
