the pursuit of three percent
several experts criticized the company's foray into footwear. Laura Ries, a marketing expert, was quite critical of UA's entry into footwear
"The key to remember is that Under Armour isn't just a great brand; Under Armour pioneered and dominaes a great category. Its power comes from the category it owns in the mind, not the brand name it puts on the package. "Under Armour" are the words that represent that category in mind. So putting the Under Armour brand name on another category is not going to guarantee success, especially if that category has little to do with performance clothing. Under Armour is an apparel brand. Nike is footwear brand. Each might sell other stuff too, but the brands are rooted in these categories and can't grow too far from them. Here is a company (UA) with no cradibility in athletic shoes attacking one of the world's most iconic and dominate brands for athletic footwear. Furthermore, Under Armour was doing so with no clear-cut product advantage and with a name that defined a totally different strategy."
John Horan, publisher of sporting Goods Intelligence, an industry newsletter, talked about the U.S. sports apparel/footwear market becoming a duopoly with Nike and Under Armour. He believes that Under Armour is one of a very small number of companies that has successfully challenged Nike in the marketplace.
- But Plank and his team were attracted by the US$31 billion international branded footwear market. Their contention was that even a 3% share of the market would nearly double UA's brand.
- In addition, UA's team believed that the strong relationships they had with the distribution channel was a viable foundation to succeed in the new category.
- In a number of interviews, Plank and his top managerment team members had reiterated the importance of the international markets for its apparel products. In fact, Plank's favorite line was "We haven't sold a single T-shirt in china." UA was a company that was largely dependent on the U.S. market for its revenues.
As Plank reflected on UA's second quarter 2010 financial results, he thought about what he wanted UA to be. Should the company attempt to be a leading athletic brand with products beyond apparel, or should UA cement its reputation as the leading U.S. performance apparel maker and extend its dominance globally?