Question

Macy's, a large department store chain and one of under armour's (ua) key retail partners, is closing a number of stores across the united states and will now operate roughly 730 locations, versus 850 in 2009. consider this set of factors and indicate whether it can be categorized as a strength, weakness, opportunity, or threat.

a. strength
b. weakness
c. threat
d. opportunity

Answer 1

The Macy's store closures represent a threat to Under Armour, indicating a potential loss of sales and decreased retail exposure in a competitive market.

Step-by-step explanation:

The closure of Macy's stores presents a threat to Under Armour (UA), as it suggests a potential reduction in retail exposure and sales opportunities. The department store chain has been a key retail partner for UA, and the reduction in the number of storefronts from 850 to roughly 730 indicates a shrinking physical retail landscape for UA's products. This situation could lead to decreased visibility and potential loss of revenue for Under Armour. Such a trend is emblematic of the challenges faced in a monopolistically competitive market where numerous brands compete, but with distinct products. UA must adapt to these changes, possibly by strengthening other distribution channels or focusing on direct-to-consumer sales.

When a company closes stores, it typically indicates that it is facing challenges and struggling financially. This can weaken the company's overall operations, reduce its market share, and lead to a decline in revenue and profits.

In the case of Macy's, the decrease in the number of stores from 850 in 2009 to roughly 730 indicates that they have been forced to reduce their physical presence due to factors such as changing consumer preferences, increased competition from online retailers, and the impact of the COVID-19 pandemic.