For the company Under Armour, develop an economic outlook from its current finan
ID: 1217827 • Letter: F
Question
For the company Under Armour, develop an economic outlook from its current financial statements. Describe its inputs that are used in this company's production function and identify any challenges to securing these inputs. Determine if the price of its products increased or if it declined over time and analyze the reasons for its price fluctuations. Study the demand elasticity for its products and discuss the availability of close substitutes for its products. How does that affect pricing decisions?
Explanation / Answer
The compnay named "Under Armour" is a an American sports clothing brand which was established in the year 2006 in Maryland. The company offers products related to casual and sports wear apparel. The company at present has various outlets in China and Canada along with Baltimore, Virginia, Edinburg, Scotland, North America and many more. The economic and financial statement of Under Armour showed that it earned a contract of USD $250,000,000 to an endorsement deal with NBA MVP Kevin Durant. The deal with University of NotreDame in the year 2014, January 21, offered to Under Armour helped the company to showcase its procut dealing with uniform along with athletic equipments. The company had a tie up with nutrition and calorie app maker "MyFitnessPal" in the year 2015 of USD $450 million along with another app company named "Endomondo" on the same year which is a fitness company with a deal of USD $85,000,000. It earlier had a tie up with the fitness app company named "MapMyFitness" in the year 2013 which showed a deal of USD $150,000,000. In the year 2016, Under Armour became the partner with UCLA and signed a deal for another 15-years of $280 million dollars.
Ther evenues have grown up steadily of Under Armour showing rise in 30% revenues in the year 2010 till 2014. The rise of revenues by 31% from 2015 to 2016 in second quarter by USD $1.17 billion. The rise in annual revenues has taken over a hike by an increase in 28% which showed a huge amount revenues of USD $3.96 billion.
The company's production worked upon sports wear along with clothing line which are comfortable for daily wear as well. The challenges to secure the inputs have been to come out with easy and comfortable inner wear and sportswear so that they make the customer get comfortable clothing. The introduction of microfiber T-shirts by the company proved successful in the sales due to good qulaity offered by the company to the customers. The quality of T-shirts comprising of moisture-wicking fabric of synthetic and compression shorts of jerseys brought by the company helped in bringing quality product.
The inputs of the company includes sportswear and footwear of baseball, football, soccer cleat, lacrosse, softball. It also includes appareals for basketbal and performance training apart from outdoor footwear. THe product has offered the increase in revenues over a long period of time due to its supreme quality product and competitive price offered in the market to the consumers. The dmand of elasticity for its product is observed as more the different quality fabric and apparels are introduced by the company then the increase in the sales in observed. The availability of the close substitutes in the market have not been discovered more as the company offers an exclusive product quality. The quality of product tends to increase the partners in the field of sports more in number.
The pricind decision is made on the basis of the quality of product offered byt he company which is less availble by other company's apparel. So the monopoly of the company has been seen which had generated a huge amount of revenues for the company over years.