The opportunities of this show could include that it is good for low-income families. It is
good for kids because kids tend to try new sports often. Under armor has no other competitor
with this kind of shoe because of how innovative this new idea is. It also encourages people to
try new sports because trying the new sport will be more of a low cost for them.
Threats for this product could be big brands like Nike and Adidas may want to compete
with the same kind of idea. If Under Armour starts doing well with the MS1, Nike and Adidas
may release similar kinds of products, which would compete with Under Armour’s profits and
market share. It may not attract high-income families who may still buy the more expensive
sneakers for each sport. Other company’s basketball, football, etc. shoes may look much nicer or
sleeker and may therefore command larger market share.
As with any product, there is plenty of competition surrounding this new product, and it
can be modeled with Porter’s Five Competitive Forces Model. Since Under Armour does not
manufacture its own products, they could face heavy competition from their supplier, who could
try raising costs, potentially face delays, etc. For this product, they could raise the prices for the
attachments of each shoe, making the overall cost of the shoe more expensive. Buyers have
power too; if the product is not much of a success and there isn’t much profit, Under Armour will
have to decrease the price to increase demand in response to buyer buying patterns. There is
heavy competition in the footwear industry, primarily from Nike and Adidas. This will cause a
marginal decrease in profits. However, since this is a relatively new idea, it may not face too
much competition. People who are loyal to the company they normally buy could switch because
they want all sports in one shoe. Because of how appealing this diverse, low-cost sneaker is, it
increases the threat of substitution against other products. Consumers are more likely to switch
from other sneakers to this low-cost one, as opposed to the other way around. Because of this,
there is not a large threat of substitution for our product. There are high barriers to entry because
of the presence of a few companies who control most of the market share. Money is required to
do the necessary research to design an effective performance sneaker, which not anybody can
just afford. In order for companies to enter the market and compete with the MS1, they will have
to do a plethora of market research as this is a relatively new idea. Under Armour, already
successful, has the necessary resources to do this research. High barriers to entry are beneficial
for this product as it will limit the competition.
Segmentation:
A segmentation base by which Under Armour could pick a target market is geographic
segmentation. Because this product is appealing to lower-income families, placing a higher
emphasis on urban regions or low-income areas may lead to increased sales. The market size for
