Globalization is the key phenomenon of the last decade. The recession that the world encountered have made many companies guarded when it comes to entering new markets for business, however, emerging markets are the focus of global multinational businesses to enter, India is one of the major emerging power of the global economy and a key focus of brands (Bremmer).
Under Armour, the no.2 sportswear brand in US, is entering the Indian market to carve a niche in the sports category of a sports mad country and will compete with primarily Nike and Adidas for a share of the market (Sarkar).
The following is the PESTEL analysis of Under Armour’s Indian market entry strategy that will in essence impact on the marketing mix plan’s of the brand.
Political
India is the most stable country politically in a volatile region and has one of the biggest democracies that have helped bring in foreign investment at the back of an effective policy system that constitutes the freedom in trade, autonomy in business, the taxation system. The sportswear is the only market that is clearly marked by global brands that showcase the political stability of India in a positive light (India Retailing).
Economic
The number is the key in driving Under Armour’s surge to the Indian market since the international business is the key in the strategy to propel the brand to $7.5 billion by 2018 (Sarkar).
The economy is on the rise with a growth of 7.5% expected in 2016 and 2017 and India is not exposed to factors slowing the economy (PTI).
Social
The social factors are all in the favor of Under Armour in relation to the business impact and trends in India in the sportswear category. With money at disposal to the target market i.e. youngsters, a trend of healthy and active lifestyle is getting entrenched in the consumers mind and the percentage growth in the market of sportswear is 13% on a yearly basis (India Retailing).
Technological
The technology has improved noticeably in India in recent times with the introduction of 3g and 4g services, besides from a business perspective, the focus of the $3 billion Business Company is to connect with the e-tailers in the country.
The e-commerce system in India is well established, consequently the technology factor is the key in making the brand connect with the consumers through recognized and popular portals to generate sales and brand positioning (Sarkar).
Environmental
The environmental factors that comprises of climate and weather will be of little significance from an operational perspective, since, the initiation will be through e-tailing that will entail that all the products will be shipped from the US.
The brick and mortar store is planned later, since the production is not done in India, the regulations that are imposed in terms of protecting the environment won’t be applicable, besides the negative social feedback that many other companies get from the media and the general public for polluting and adversely affecting the environment will not be an issue for Under Armour.
Legal
Way Forward
The aforementioned PESTEL showcase the international business strategy of Under Armour, by focusing on the most significant markets of the global business world to compete with the market leaders Nike and Adidas.
The brand has already created an upset in the German market by overtaking Adidas in 2014. To be a success in the Indian market it is imperative to focus on the place and promotion, reason being e-tailing is still in its startup stage in India and the more brick and mortar stores Under Armour will launch in metros’ and large cities, with establishing stores in tier II and III cities, the subliminal presence and impulse buy will help in creating a consumer base and compete with the strong Nike and Adidas business in India in an effective manner.
The marketing communication needs to connect from an emotional view point with an endorsement from a celebrity, with a global focus on the underdog strategy; it is imperative to connect with young Indian sportsmen with a bright future in cricket, badminton, hockey, football to start with.
Dwayne ‘the Rock’ Johnson is the global face of Under Armour and can be used in Indian communication as he is a very popular figure in India due to his movie star status and WWE history.
E-tailing as a business strategy needs to connect with an on ground activation strategy that will connect with the consumers directly to create the brands image with thematic activities and also creating an online connect to tap in the business through a tactical strategy
Works Cited
Bremmer, Ian. The New Rules of Globalization. Harvard Business Review. 2014 Web 21 March, 2016.
India Retailing. Global Brands drive India’s Active Sportswear Market to over Rs. 6,000 Crores
Fashion. 2015 Web 21 March, 2016.
PTI. Moody's pegs India's GDP growth at 7.5% in 2016-17. The Times of India 2016. Web 21 March, 2016.
Sarkar, John. Look out, Adidas and Nike! Sportswear brand Under Armour set to enter India
Brand Equity, Economic Times 2016. Web 21 March, 2016.
