Under Armour's global expansion in a foreign market - Essay Example

Conclusion/Recommendation: The large and rapidly growing Chinese economy makes it a very viable market for Under Armour which is a business organization planning to pursue growth strategies through global expansion. However, the entry of China requires a thorough analysis of its unique cultural, political, economical, and social environment. It should be noted that even though a lot of companies are eyeing this world’s next economic giant, they are postponing their entry in order to craft a strategy which will be efficient in capturing the Chinese market.

At the other end, large multinational corporations like Coca-Cola Corp and Nike, Inc which have long been successful in bringing in their products and conquering China. 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 address the market’s lack of awareness of its products through an intensive and extensive marketing campaign. The company should seek to establish its image through a sponsorship in 2008 Olympic Games and using popular players to endorse its product.

This is especially important noting the Asian’s inclination to buy products which are advertised using well-known celebrities. Under Armour should also look at adopting their products to local popular sports like badminton and tennis. Light-weight clothes can be designed for these purposes. Recognizing the opportunities in other Asian markets, Under Armour can also pursue global expansion in other neighboring nations making China as production center in order to take advantage of the low wage and skilled labor force.