Tuesday, January 11, 2011

Battle tested

Last night's Tostito's Fiesta Bowl wasn't just a clash between Auburn and Oregon. Two heavyweights in the sports apparel business were on the undercard: Nike and Under Armour.

How did a company that wasn't even around 15 years ago find itself going head to head with Nike in the biggest college football game of the year? 

It's an interesting story and one that's not too dissimilar from Nike's.

Kevin Plank, a University of Maryland football player, hated changing undershirts throughout practice as they became sweat soaked and wondered why his undershirts couldn't be made of moisture wicking fabric like his shorts. The answer, of course, was they could. So he started Under Armour in his basement and marketed the product by word of mouth.

Phil Knight was a middle distance runner for University of Oregon and was frustrated that he couldn't find shoes specifically designed for his sport. So he made Nike shoes with waffle soles specifically for  his needs and sold them out of the trunk of his car at track meets.

Both started with a simple insight, began as a single functional product and grew through a disciplined approach, moving into categories where there was less competition from the big player in the market. After track, Nike took on baseball, a niche market for Adidas.

When Under Armour wanted to get into the shoe business, they tackled football, leveraging their equity into a relatively small segment of the business but one in which they could provide a unique product and create a profitable business.

The recipe is pretty simple. Mix passion with insight, add a healthy dose of strategy, be prepared to eat ramen for a few years while you build your business and you too can build a major international brand.

1 comment:

  1. Good post, I've also noticed UnderArmor's saavy growth and wondered what their story was.

    Still, the Nike marketing machine never misses a beat: The Tuesday morning Eugene newspaper had the back page filled with a b&w image of an Oregon helmet with the copy (in day-glo Oregon green) "Everyone loses games. Few change them."

    Of course at the bottom of the page was the good ole swoosh.