In January 2017, the sports footwear and apparel company Under Armour’s shares plummeted more than 25% after reporting dismal holiday sales and announcing an underwhelming sales target for the upcoming year of growth between 11%–12%. This came as a surprise to Wall Street investors because previously Under Armour had been predicting growth of over 20%.

Under Armour’s poor holiday sales were in part impacted by the recent bankruptcies of sports retailers such as Sports Authority, City Sports, and others. Further, competition in this industry has been fierce with rivals like Nike and German-based Adidas which have much better global market position, while 85% of Under Armour’s sales come from North America.

Further, retail data indicates that in the 4th quarter of last year, Under Armour’s footwear sales tumbled by about 20% in the U.S. market and apparel sales fell 17%. In addition, past investments in brand extensions such as digital apps, connected footwear, and high-end athleisure clothing aren’t fueling substantial sales growth.

Review the additional readings below:

• Here’s Why Shares of Under Armour Are Plummeting Today (opens in new window)
• Has the Activewear Fashion Fad Run Its Course? (opens in new window)

Instructions

The situation at Under Armour is critical because while the company is at a point in which it could recover from a weak holiday season, it could also fall in danger of spiraling into a further decline in the upcoming year.  The CEO wants to foster innovation within the organization.  You are an innovation consultant that has been called in to help propose innovation strategies.  You believe that while you may not have the answers to what innovations are needed, you are confident that the employees of Under Armour do, and it’s a matter of inspiring them to propose innovative ideas.

1. Identify 3 innovation initiatives that you would implement to promote employee innovation within the company.  Explain each initiative and how/why it would promote innovation.
2. If you had to identify 1 potential category (of the ten categories identified in the text) that should be the focus of innovation for Under Armour, which category would it be and explain why you think this category is a promising area for innovation.
3. Examine potential barriers or concerns that could prevent or inhibit the successful implementation of the 3 innovation initiatives within the organization.