This paper recommends that Under Armour carry out an in-depth analysis on its internal capabilities and the unique Chinese market as well as learn from the examples of Coca-Cola and Nike.
One of the main challenges in entering China is the political system which has long been influenced by communist thought. In this huge economy, political intervention is very much prevalent in the private and industrial sector thus curbing competition among industry players. The Chinese government is a strong adherent of local industry protection which makes it very much in tuned and sensitive to the concerns of domestic business organizations to the detriment of multinationals. It should be noted that the political system often hinders growth of foreign companies through legislations which protects the interest of the local players. The political environment posts a significant barrier to entry together with Chinese people’s cultural attitudes towards Western or foreign companies. Unlike other Asian countries which are imbued with colonial mentality, Chinese are known for their preference of buying from domestic companies.
The experience of Coca-cola and Nike in the Chinese market suggests that Under Armour enters China by forming an alliance with the government and establishing a joint venture with a local player. Coca-cola’s phenomenal success in this country is its partnership with the government and local companies in production and distribution of its products. Another notable strategy is localizing the products to suit the preference of this unique market. Coca-cola undertakes this by introducing tea products which takes into account the market’s penchant for tea. Even Nike creates products which carries Chinese elements like dragon inspired patterns, red-silk accents, and Chinese characters.
Under Armour should also