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INDUSTRY REPORT ON UNDER ARMOUR'S DIGITAL TRANSFORMATION: A MCKINSEY-INSPIRED JOURNEY
Based on the elements of McKinsey Nine-Box Matrix, Under Armour’s proposed digital transformation is about designing a A vision focused on digitizing customer engagement, enhancing organizational adaptability, and promoting innovation through data. Through the incorporation of sophisticated technologies and acute learning, the firm has expanded the overall sector position, effectiveness and interaction with clients hence consistently growing in the sportswear industry.
Under Armour is a sports apparel company that operates globally and has recently initiated a thorough process of digitization due to the increasing levels of competition. Similar to McKinsey’s strategic vision and cooperation with key technological solutions, Under Armour strives to become a company that utilizes advanced IT solutions and data analysis in its daily activities. This transformation includes: satisfying the customers, innovativeness, and work process transformation.
Thus, the focus on the agile methodologies in combination with the concepts emphasizing the importance of customer value will allow Under Armour to reassess its position in the competitive market for sports wearing, boost the company's growth, and develop a competitive advantage in the rapidly changing market environment (Underarmour, 2024).
Technological resources and other infrastructures form the basis of sustainable and secure digital solutions, better orientation on data creates the necessary impetus for optimization. This involves procedures that focus on the employees to support them in their change operations as well as promoting the right organizational culture that encourages every person to embrace change and support the transformation process. Through cultivating talent and skills Under Armour can guarantee its human capital is skilled enough to manage the dynamic digital environment.
Figure 1: Digital transformation set the brand up for success in the pandemic
(Source: Ciment, 2024)
Under Armour, a manufacturer of high-performance sporting gear has realized the reality of the latent need for having a well-structured digital transformation framework in place to sustain competitive advantage. This change process is based on adopting digital technologies in delivering and performing customer value and process excellence. Strategic moves include such activities as the launching of digital businesses such as MyFitnessPal and MapMyRun and the connection with wearables.
In this way, through the application of complex technologies, Under Armour targets its clients more effectively and adapts its products. Nevertheless, this shift in strategy is not only about the introduction of new technologies but it is also about the enhancement of the digital-first approach to the organization’s activities. Thus, these initiatives become the strategies that help Under Armour to increase brand equity, stimulate consumer loyalty, and increase its sales in the context of global and digital transformations.
Under Armour was started in 1996 by Kevin Plank, a former University of Maryland football player (Torres, 2021). The company began with a simple idea: to design and develop a better T-shirt that offered this attribute of contracting close to the body as well as that moved sweat away from the body instead of soaking it up. Athletes embraced this product and Under Armour grew beyond the shirt and soon introduced more products ranging from apparel, shoes and accessories that endorsed its performance technology.
In these years the company developed into a worldwide leading athlete wear company and is recognized by consumers as an innovative brand. The competition has not come easy for Under Armour to compete with fierce brands such as Nike and Adidas but the brand has not relented to develop and enhance the technology used in sportswear (Monteros, 2024). Today, the company is basing its digitalization on the background of the history of innovation, which is on its way to improving customer experience and organizational effectiveness.
Figure 2: Strategic Management of Under Armour
(Source: Self-created, 2024)
The major point about Under Armour’s digital transformation is that it is driven by the McKinsey approach which implies a systematic and integrated one. This change entails shifting old business structures and incorporating technology in the improvement processes to deliver enhanced performance.
McKinsey has set guidance frameworks that Under Armour has implemented such as customer obsession, the use of agile platforms, and analytics. In its business operations, the firm has incorporated digital technologies regarding product development, marketing, and other aspects that engage the customer.
Thus, Under Armour can guarantee that teams are capable of adjusting to the current market and customers’ demand thanks to the organization’s concentration on agile cooperation and integration of numerous functions. That is why data are seen as the tool for the transformation of organizations where analyses help to advance new strategies and enhance outcomes. In this journey inspired by McKinsey, Under Armour wants to lock in its position in the boxing market, strengthen its brand, and provide more value for customers.
Part of making Under Armour a digital business, the customer sits at the centre of all change processes. Based on the McKinsey customer-orientation concept, the company’s main goal is to optimize customer relations and products.
Under Armour uses elaborate big-data analytical models to determine the customers’ propensity to engage in certain behaviours, which helps the firm offer relevant advertisements and recommendations. This strategy also extends towards the creation of applications and wearable gadgets that in turn offer the user with the required and expected fitness coaching.
In other words, Under Armour not only succeeds in increasing the level of customer satisfaction but also enhances customer loyalty. They give the firm a competitive edge since the business does not only wait for the customers’ needs to arise but is already prepared to fulfil them. Under Armour always focuses on innovations and its target market to try to develop the best experience for consumers for them to be loyal to the brand.
Key principles, such as agile collaboration and cross-functional coordination, apply to Under Armour’s digital initiatives – all the strategies mentioned by McKinsey. The firm’s organizational structure has also been rearranged to improve cooperation and functional integration of teams, reducing the partition of company divisions and departments.
Thus, this business strategy allows for fast development of new products and fast adaptation to market shifts. Integrated and coordinated multifunctional teams from the digital, marketing, product development and IT departments are responsible for the steering of digital projects. It also fosters coordination in the use of digital technology where plans, strategies, processes, and lessons learnt are openly shared hence facilitating an effective organization of the technological advancements.
Overall, with the help of the agile approaches, Under Armour can make experimental and fast changes, adapting digital products and supplying a range of services. While this structure greatly increases the speed of innovation, it also improves the firm’s capacity to produce unified and integral customer experiences (Cio, 2024). Finally, one can conclude that agility and strong inter-organizational relationships are the primary sources of success in Under Armour’s digital transformation initiative.
An element of digital evolution for Under Armour entails the company’s skills regarding data-driven efficiency and innovative advancement. The use of big data and business analytics provides the firm with valuable information about the consumers’ habits and needs, and through it, the firm is in a position to make the right decisions that will closely align with the consumers’ needs. This provides Under Armour the strategic advantage to fine-tune the product portfolio, promotional channels and business processes.
The strategy of Under Armour today is based on innovation, in particular, on the use of the digital factor in its products and services. Sportswear of tomorrow is already becoming a reality under the leadership of Under Armour and innovations like wearable technology, smart apparel, and highly realistic digital experiences represent only a tiny fragment of what the wearer of Under Armour sportswear can hope for (Sara Silverstein, 2024).
The long-term focus on productivity improvements and innovation enables the company to keep on outcompeting rivals for the longest duration. Under Armour’s strategic management has integrated its analytical tools with advanced technologies whereby it is also revolutionizing the business itself and the standards of the sector.
Figure 3: Innovation in processing at Under Armour
(Source: Underarmour, 2024)
Innovation and learning culture are also an important element for organizations in their digital business transformation including Under Armour. Several policies have also been put in place that allow the employees to innovate various ideas and technologies. Continual camps and education meetings make it possible to keep the strength informed on the new fashionable digital things and products (Senteza et al. 2020). Under Armour creates a positive atmosphere in the workplace through the concept advocacy of the growth mind-set as well as the appreciation of diverse voices. Not only the company’s innovation but also the employees receive a chance to create valuable change in the company’s direction aiming at providing constant development and strong positions in digital advertising and marketing spaces.
Using electronic media, Under Armour achieves the applicability of fashion and technology to provide the customer experience. This ensures that through using MyFitnessPal, MapMyRun, and other related apps, the consumers are compelled to get insights about their fitness level while at the same time being introduced to new products to buy (Rudow, 2022).
Integrated Fashion Electronics that are incorporated in the clothes completely embrace the functionality and styles, data that is displayed in real-time. These platforms not only create engagements and strong relationships with the customers but also provide data for the development of the next products. With the help of fashion and technology integration, Under Armour develops a full-fledged environment that complements its customers’ healthy living patterns on the one hand, and ensures sustainable growth and competitive advantage on the other.
The vision statement of Under Armour is to be the company that outfits the athlete in performances with the technologies used in athletic gear and quality apparel. The vision entails shifting the company towards a data-driven and technology-based business model that aims at providing highly customized solutions to clients besides improving the company’s internal processes (Czvetkó et al. 2022). All in all, having in mind the end customer, Under Armour's strategy sees the need and focus to meet the ever-changing needs of the audience. The strategy also involves the organisational culture where the company adapts to change easily should it exist within the market. These drawn visions and strategies altogether form the foundation of Under Armour and place the company for sustainable growth and sustainable business advantage.
Figure 4: Customer-Centric Strategy Framework
(Source: Self-created, 2024)
For this section, one must stress Under Armour’s consumer-oriented digital business strategy, which puts the customer at the centre of change. Using modern tools of data analysis, the company obtains a great quantity of information about customers and can use the received data to personalize further marketing strategies and products (Gupta et al. 2021). These aspects are followed by the growth of support services that use customized information and electronic devices such as gear that coaches on the right fitness levels and devices that give information on the usage of products.
Thus, Under Armour improves customer satisfaction and secures their loyalty through frequent interactions with them and their subsequent changes. This concentration on the customers’ interests guarantees that the brand stays relevant and can effectively compete for loyal patronage in the market, providing customers with the best value and a fulfilling experience in the long run.
Culture underpinning digital transformation Also, it is crucial to note that Under Armour’s digital transformation is remarkably data-driven. It provides a large company with enjoyable big data and analytics advantages, such as the understanding of customers’ behaviours, trends, and operations (Alrumiah & Hadwan, 2021).
This helps Under Armour to better understand its customers in a way that can help it communicate with them at scale while also providing tailored product recommendations and making better use of its advertising budget. Real-time data analysis can be used to effectively implement necessary changes in the constantly shifting market and customers’ needs.
This focus on the availability of data also improves the business’s operational performance while simultaneously allowing for the development of new strategies because Under Armour is only interested in being the best in the sportswear market through targeted strategies.
Figure 5: Revenue of the apparel market worldwide from 2018 to 2028
(Source: Statista, 2024)
The specific strategy that Under Armour uses is an agile and iterative method of implementing digital transformation. Another advantage is that the usage of agile promotes the rapidity of the speed of innovation and the ability to respond to change. There is a lot of integration where various functional units work together through feedback mechanisms to ensure that there is an improvement of various digital projects regularly. The global revenue of the appeal market will continuously increase up to 0.2 trillion U.S. dollars in between 2024 and 2028. It enables Under Armour to easily make new technologies and digital solutions; test, improve and expand them. The implementation of agility checks that the firm maintains the ability to adjust to serve the customers’ needs with timely and useful products and services. As a result of iterative development Under Armour can sustain a competitive advantage and continuously develop its digital strategies and consumers’ experiences.
On the technology and infrastructure front, the Baltimore-based enterprise dedicatedly spends to fuel its digital era. Cloud, analytics, and IoT are employed by the company to improve its business operation and client servicing. Well-implemented IT systems mean interfaces are integrated to allow data flow and the integration of different applications (Myllyniemi, 2021). Strong information security controls safeguard confidential information and compliance with regulatory requirements. This way, Under Armour guarantees the scalability of the technological system in case of further innovations in the future. Such a commitment to the innovation of technology and the development of efficient and reliable structures allow Under Armour to provide customers with better digital experiences and sustain market competitiveness.
Concerning the organizational alignment, Under Armour enriches the goals of digital transformation at all levels of the company. Management stresses the necessity of a clear shared goal and plan of action reinforcing the organizations’ cooperation between departments (Castañer & Oliveira, 2020). Interdepartmental consultation and meetings help to synchronize the implementation of digital projects with the organization’s goals. In this way, Under Armour consolidates digital priorities at the corporate level, culture, and performance to create awareness and commitment from each of its personnel in the transformation process. This alignment helps not only in the formulation of strategies but also in the improvement of efficiency and effecting in achieving the company’s digital transformation visions and objectives successfully.
The development of talent and skills is crucial to Under Armour since it fosters its digital change. It also runs training sessions for employees regularly and ensures that the firm’s human capital is equipped with the right digital knowledge. Employment in educational institutions and technology companies provide professional development and certifications (Okolie et al. 2020).
Internal innovation labs and hackathons force employees to look for new applications of such technologies and work together on digital projects. Through the creation of a culture of training and development, Under Armour implements an adequate following that guarantees its employees’ ability to harness digital tools. It is important to mention that talent development is the focus here, which is necessary for the company to maintain its competitive advantage in the context of the aforementioned rapid technological advancements.
It means that the transition to digital which Under Armour has exemplified by following McKinsey’s strategic framework is an extensive reworking of business practices, organizational cultures, and customer acquisition approaches.
This strategy positions the consumer at the centre of the company’s digital business strategies and uses analytics to create customer value and create long-term customer relationships. The use of cross-functionality and agility to quickly produce and adapt to products is the reason why Under Armour triumphs in the sportswear industry.
By doing so, Under Armour not only increases its practical productive capacity and customer satisfaction but also defines itself as an innovator and a trendsetter in the sphere of digital transformations in the sphere of sportswear. This strategy is highly useful for the company as the commitment to constant improvement and strategic alignment indicates that it can effectively meet the constantly changing needs of the customers and thus retain a competitive advantage.
In conclusion, the digital transformation scenario of Under Armour can be well understood as the brand’s commitment towards DG and achieving higher levels of performance by exploiting digital potential.
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