Under Amour is the name of an American company that often produces sportswear, casual clothing, and footwear. Baltimore, Maryland serves as its global headquarters. Its goal is to improve all types of athletes via the use of science, passion, and the unrelenting quest of innovation. It has branches all around the world.
Using horizontal integration as its goal, Under Amour Footwear. This is due to the fact that it is diversifying by marketing its new items to its current clients. Given that it was a success, this presented the company with a significant potential. However, in this particular case, the company tends to add new services and products that are in most cases commercially or technologically unrelated to the company’s current products, but may be appealing to the current clients. The company uses the differentiation strategy with the aim of creating products that are valued as well as perceived as unique by the customers. The organization has diversified into various niches which include: fitness, marathon performance, sports. The products are made for both men and women.
The main benefit of the company pursuing the horizontal integration strategy is that it often increases the organization’s independence on specific market segments. Recently, the company began selling football cleats. In addition, the new products are usually marketed in most cases to the same economic environment just as in the case of the company’s existing products. However, this may lead to instability or rigidity. The main reason for the company to use this form of strategy is to reap the benefits of the expected outcomes of diversification. The management expects greater economic value in terms of profitability and growth. The company also wants to have a more efficient use of available capabilities and resources, as well as exploit its technical knowhow. However, the use of horizontal strategy means that diversifying tends to pose a great risk for the organization. This is because; it entails a company going into a market that is unknown using unfamiliar products.
The Company’s internal value chain
The company’s internal value chain mainly consists of all technologically and physically activities within the company that tends to add value to the customers. The company is making its products using a specialized material that is designed to keep the athletes dry and cool during games and work outs. This in turn links technology to performance which ensures that Under Amour remains a top brand.
Ethical issues that have faced Under Amour Company
There are several ethical issues that Under Amour has been confronted with. The first one is corruption. This arises often in a business context when managers tend to pay bribes with the aim of gaining access to various lucrative deals. For instance, Under Amour has always brought in athletes with the aim of representing their brand. However, they were alleged to be performing illegal recruiting routines with the aim of persuading a basket baller by the name of Lance Stephenson. The company was trying to bribe him with money to play at the University of Mary land which is the company’s headquarters. This violated NCAA regulations and rules.
Secondly, the company engaged in the ethical issue of providing substandard working conditions. This is by engaging in unfair labor practices. The company was also guilty of information manipulation. In the advertisement of “Band of Ballers” t-shirts made showed silhouette of different men in the backwards baseball caps who raised a hoop in the iconic pose of Marine corps memorial. The soldiers are seen to raise the American flag after their victory in Iwo Jima. Many people considered this to be respectful to the heroic men who fought during that war. As a result, the company had to publicly apologize and stop the sale of those t-shirts.
