PESTLE Analysis of Under Armour. Under Armour Inc. is an apparel-manufacturing American Sportswear brand. Kevin Plank established the sportswear brand in 1996. The headquarters of the sports equipment company is in Baltimore, Maryland, USA.
Some of the main products and services of Under Armour are as follows;
- Bags and backpacks
- Running sports
- Basketball shoes
- Short sleeves
- Polo shirts
- Training shoes
- Gym bags
- Hiking boots
- Golf shoes
- Sports bra
- Football boots & gears
- Running shoes
- Gym and training tops
Key statistical facts and figures about Under Armour are as follows;
- The annual revenue of the sportswear company in 2023 was 5.87 billion US dollars
- Out of which, the net income of the company was 0.27 billion US dollars
- Approximately 18000 employees are working for the company to manage its operations
Some of the top competitors of Under Armour are as follows;
- Liberty Shoes
- New Balance
Today, we’ll discuss the PESTLE analysis of Under Armour. It is going to focus on the external macro factors like political, economic, social, technological, legal, and environmental impacting the sportswear company. Here’s Under Armour PESTLE analysis as follows;
Political Factors Impacting Under Armour
Some of the main political factors in the PESTLE analysis of Under Armour are as follows;
The founder of Under Armour Kevin Plank accidently commented about Donald Trump by saying “He’s a great asset to America.” His political comment received a lot of criticism from the general public on the view that he shouldn’t have taken sides. In fact, the company’s brand Stephen Cury criticized his comment along with many of the company’s employees. The target market of the sportswear brand is both Republican and democrat people, and the company shouldn’t take sides.
Under Armour outsources roundabout 60% of its production and manufacturing works from 15 developing countries; Vietnam and China are the leading manufacturing countries. The governments in the developing countries are increasing the labor incentives and wage laws. Change in regulations would remove and decrease the cheap labor option that the sportswear company is taking advantage of.
Under Armour also outsources some of its manufacturing work from Mexico. The republican government had conflicted relationships with the Mexican government. It is not good for the company’s operations due to political conflicts, if it stays like this.
Economical Factors Impacting Under Armour
Some of the main economic factors in the PESTLE analysis of Under Armour are as follows;
The financial performance of Under Armour in terms of revenue and profitability has been increasing for the past few years. The healthy financial condition allows the sportswear brand to take on new projects like increasing its product line horizontally and vertically.
The market of the apparel and textile industry in 2021 was 900 billion US dollars and its growth rate was 4.8%. It presents a lot of opportunities for the sportswear brand Under Armour to expand its business in developing countries and take advantage of the growth. It would help the company to increase its revenue, growth, and profitability.
High Labor cost
The labor cost is increasing in China and it is not good for the sportswear brand Under Armour, because it would amplify the manufacturing cost of the company. Along with high labor costs, China and the USA have got conflicting trade relationship, which results in the form of high taxes and decreases the company’s sales and revenue.
Social Factors Impacting Under Armour
Some of the main social factors in the Under Armour PESTLE analysis are as follows;
The lifestyle of customers has changed significantly over the past few years in terms of their needs, demands, and requirements. People have become more brand-conscious and they want high-quality goods at a competitive price range. The changing lifestyle pattern tells the sportswear brand Under Armour about the shopping drive of customers and how to deal with them.
The trend of health, exercise, and outdoor sports activities has increased a lot among the young demographic of the customer market. The outdoor sports activities encourage people to buy sports apparel and accessories. Under Armour is also operating its business in the same category, and the company should keep developing innovative designs and quality products to keep up with customer demands.
Speaking of trends, customers have shown a great interest in antimicrobial fabric apparel that absorbs their sweat and doesn’t look bad. Under Armour should keep up with the latest consumer trends and it would help the company increase its growth and sales.
Technological Factors Impacting Under Armour
Some of the main technological factors in the Under Armour PESTLE analysis are as follows;
Technology has transformed almost all areas of our lives. Nowadays, people feel more comfortable shopping online and want their products delivered to their doorsteps. It has allowed the company to establish an online store or e-commerce to target online shoppers and present its portfolio online. Under Armour has also built social media pages to connect with customers and receive feedback and reviews about the company’s products.
Under Armour has recently launched new shoes by the name of HOVR Machina for professional runners, racers, athletes, and trainers. They have the capability to connect with the mobile application to analyze the performance of the runner to avoid injuries.
Rush Clothing Line
The “Rush clothing line” of Under Armour is a tech-designed product that has the capability to recycle body heat energy and give it back to the body for improved strength. It shows the research and development of the company on the introduction of the new products, and it helps the company to remain relevant to the customer needs.
Legal Factors Impacting Under Armour
Some of the main legal factors in the Under Armour PESTLE analysis are as follows;
Flammable Clothes Incident
A post went viral on Facebook in 2018 showing that Under Armour’s clothes were flammable and caused burn injuries to the child. It outraged people on social media and they raised serious concerns about the quality of the company’s products. However, the negative brand perception is not good for the company’s market and sales.
Accounting Fraud Scandal
An article published in the Wall Street Journal accused the sportswear brand of accounting fraud. It claimed that Under Armour was falsely portrayed to be profitable during the period of 2016 to 2017 with limited public information. Such types of accusations and rumors have shocked the investors and negatively impacted the reputation of the company.
Environmental Factors Impacting Under Armour
Some of the main environmental factors in the Under Armour PESTLE analysis are as follows;
The consumer market has become highly cautious about the production and manufacturing practices of their shopping brand. Under Armour should engage in sustainable practices that would have limited impact on the natural environment like; low carbon emission, pollution, and low wastage of natural resources.
Conclusion: Under Armour PESTLE Analysis
After an in-depth study of the PESTLE analysis of Under Armour; we have realized that Under Armour is the world’s leading sportswear apparel company. If you are learning about the business of Under Armour, then you should keep in mind the abovementioned macro-environmental factors.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.