Various economic factors influence the operation of every business. These economic factors fall under two general classifications namely macro and micro economic factors (Weedon, 2012). This assignment amps to focus on microeconomic factors affecting Under Armour business as the primary case study. The assignment will focus on critical analysis of several micro economic factors affecting the business including but not limited to the elasticity of demand and supply and market trends. Finally, the term paper will use the data mined from the company websites to make sound recommendations on how the firm can manage better production in future through a proper analysis of the data extracted from different sources.
Overview of the firm
Under Armour International Corporation was established in 1996 and engages in the development, distribution and marketing of branded apparel, accessories and footwear for men, youth and women. The company products are engineered in different tastes, fashions and designs suitable for wear in virtually all climates. The corporation operates in various market segments including America, Europe, Canada, Africa and Middle East regions. The firm sells its product through both consumer direct channels and wholesale channels (Weedon, 2012).
Under Armour was founded by Kelvin plank and a former football career student at Maryland University. The original name of the company was KP sports but later changed to its current name when it became more publicly known. The founder believed in building a strong and unique brand within a short time for it to have unlimited opportunities for future expansion. Under Armour mission is to improve the athletes through the relentless pursuit of innovation and inspiring designs. Since the inception of this technology, the business concept has been duplicated by several other sport wear brands. However the company remains in its competitive edge through its action plan by maintaining superior brand which is more appealing, a variety of products, excellent designs and better quality at all times. The goal is to outsmart its competitors purely by offering differentiated products, technological superiority and attractive styling (Zach, 2009).
Supply and demand conditions
The global demand for sportswear has experienced an increased demand from customers as most people increase appetite for healthy lifestyles through exercising. Consequently, the demand for sporting wear has grown tremendously over the last few decades favouring different ventures in the industry. Some of the other trends that have increased demand include more participation rates in the sports as well as the emergence of new sports in the contemporary world. As a result, many firms has been attracted into the industry leading to heavy investments and high competition. New firms have continued to join the industry increasing supply even more than the demand rates. The industry is therefore characterized by a large number of suppliers, thus equating for high quality and more established suppliers such that Under Armour needs to leverage more. Societal, fashion trends and lifestyles are the main drivers of demand in the industry. The ever changing lifestyles, taste for fashion and changing attitudes impact the demand for the products. It is worth noting that there has been a significant increase in youth population and thus increasing the number of people participating in sporting activities globally. Another factor attributed to the growing demand for the sports clothing include the growing population