Swot Analysis: Should Under Armour Inc. Export To Brazil?

2039 words - 8 pages

Introduction
Created in 1996, Under Armour, Inc.’s principal business operations include the designing, marketing, and distribution of sporting apparel, footwear and accessories for men, women and youth. The company has engineered moisture-wicking fabric products, which come in many designs and styles for wear in virtually every climate. The firm seeks to provide a superior performance alternative product compared to traditional sportswear merchandise in the market. The HEATGEAR® products contain a microfiber blend fabric designed to draw off moisture from the body that helps consumers stay cool, dry and light. Consumers wear this product if temperatures are warm or hot and while working out in the gym. The firm continues to reinforce its mission to make all athletes better by growing worldwide with currently 19 offices around the world. Under Armour, Inc. utilizes its strong growth and revenues from the U.S. market space to help drive and support the company’s global ambitions. Ninety four percent of the net revenues for 2013 derived from U.S. sale revenues of $2,082.5 million.
Under Armour, Inc. should export its HEATGEAR® product brand into the Brazilian market. Brazil produces $351 billion retail sales in 2013. The country is the 10th largest market in the world as well as the 6th largest apparel and footwear specialist retailer channel in the world. The country will host two major events in the near future. The 2014 FIFA World Cup and the 2016 Summer Olympics will both take place in Brazil. The FIFA World Cup begins in June. The U.S. Commercial Service believes that the Olympics presents a profiting opportunity for U.S. exporters of sporting goods equipment and services.
Situational Analysis
In order to support Under Armour, Inc. entrance into the Brazilian market through use of exporting, a SWOT analysis revealing the firm’s uncertainties must be completed.
Strengths and Weaknesses
Under Armour, Inc.
Strength Weakness
Strong Financial Performance The company’s revenues increased at an annual growth rate of 26% from $725.2 million in fiscal year 2008 to $1,834.9 million in fiscal year 2012. The company greatly depends on third-party suppliers and manufacturers outside the U.S. to provide fabrics and to produce its products. This could result in manufacturing errors causing product recalls, withdrawals, delays, derailing the company's financial performance.
Brand Recognition Firm plans to leverage current U.S. brand recognition to participate in more markets around the world. The Brazilian apparel and footwear specialist retailers market is highly fragmented. The large number of stores and wide geographic spread make it difficult to achieve a nationwide profile.
Distribution The firm sells to Latin American consumers through independent distributors in Latin American countries where there are no direct sales operations. Apparel and footwear specialist retailers generate more opportunities in the market for apparel and footwear products...

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