The Relevance of History in Business: Understanding Its Importance

This is why is history important essay in which there will be an attempt to give an answer to questions. What is history? History, (from Greek ἱστορία, historia, meaning 'inquiry, knowledge acquired by investigation') is the study of the past, particularly how it relates to humans. Why is history important, especially in business? This is the second quastion within why history is important essay. So the history is important because history helps you understand the past to predict the future and help in creating it. Studying history gives us wide opportunities to get better understanding of our past experiences to count on the great achievements and avoid the horrific mistakes. Having a good product isn’t the only thing that makes a good business. Understanding not only the want, but the need for your product is key. Supply and demand is the oil that lubricates the business gears. A few other motivating factors are competitors, economic trends and global marketing. So, what does your business do when you understand supply and demand, know not only your competitors but your target audience, as well as economic trends and global marketing? 

To start the use and importance of history to my life essay, under Armour was founded by a man named Kevin Plank. Kevin Plank grew up in North Bethesda Maryland, where he attended Georgetown prep school. Just like some other successful entrepreneurs Plank didn’t have a very good start. Plank was kicked out of Georgetown prep due to poor academic performance and behavioral issues. Following in the steps of a few other successful entrepreneurs such as Bill Gates, Steve Jobs and Mark Zuckerburger who also didn’t do well in school. However, Plank ended up finding his way to University of Maryland where he played football for three years. As I mentioned before, part of understanding not only the needs, but wants of your customers is key to any successful business. At University of Maryland is where Plank was able to acquire this skill. When Plank played football, he noticed something interesting. After practice himself and his teammates t-shirts were absolutely saturated with sweat. This caused multiple issues. Firstly, the sweat left a horrendous odor in the locker room, and secondly the sweat soaked shirts didn’t allow for proper evaporation and cooling of the skin. This improper evaporation had some side effects. Some of these side effects included extreme chafing, clogged pores and acne, other skin irritations, fungal growth and for women, yeast infections. This is when he decided that he needed to create a better shirt not only for football players, but all athletes alike. In his grandmother’s townhouse in Georgetown, with about $15,000 dollars and some locally purchased fabric, Plank started his journey. He ended up buying some fabric from a place called Minnesota Fabric in Beltsville Maryland, and then found a local tailor who would create a prototype. Plank basically walked into the tailor shop with a white hanes t-shirt and the recently purchased fabric and said to the tailor “can you make me a shirt like this, but out of this material?” The tailor was able to make the shirt and the first Under Armour shirt had been created.

Being the entrepreneur that he was, Plank realized that he needed production on a grander scale. So, one day he drove to New York City and walked around 34th and 7th avenue in an area known as the garment district. He was then able to find someone who could produce the shirts at a cost and production rate that he felt would be manageable. Plank didn’t believe in asking other people for money. He believed that this was his product and he didn’t want anyone having a say in how things were done, or a piece of any of the profit. Plank had this idea that your product is either good enough that people are willing to pay you for it, or it isn’t and you’re doing something wrong. So, with the $15,000 he had saved and another $40,000 in credit cards, he financed everything himself. Now that he had a product he needed a name. Plank had originally come up with a few ideas. His first idea for a name was Heart. Plank was unable to trademark that, so he then went with Body Armor. Once again, this name wasn’t able to be trade marked due to a company already having that name. So, one day Plank's brother said to him, “how’s that company you’re working on coming? What was it called again, Under Armor?” That is when the name stuck. Not only did Plank like the name, but the name was available and it made sense. However, Plank went with the british spelling of armor, so the phone number could be 888-4armour, instead of 888-44armor. Plank had a good speed to market time frame. At first Plank would sell t-shirts out of his car as well as give some to his football buddies. He just asked that they could spread the word about the product. In his first year, 1996, Plank made $17,000. He then decided to hire some employees who could help him run the company. In 1999 the company was nearly bankrupt. Plank decided it was now or never and he had to make a move. He decided to do some marketing and advertising. However, with his go big or go home attitude, and knowing his demographic, Plank wanted to run an ad in ESPN magazine. In order to do so it would cost Plank $25,000 dollars. Plank's employees were so confident in the product and Plank himself, that they agreed to work without paychecks for a few weeks in order to run the ad. The ad had not only turned the nearly bankrupt business around, but a year later Under Armour had done a million dollars in direct sales. The risk had paid off. Big name athletes began wearing the product which elevated sales even more. The company's uphill trajectory continued and in 2010, after 14 years and nearly folding, Under Armour reached $1 billion in annual revenue. Between 2014 and 2016, Under Armour spent close to $1 billion in acquiring digital businesses. Sticking to what they know, these apps were all fitness and nutrition related. The venture was extremely successful, landing Under Armour the world's largest digital health-and-fitness community, with 150 million users. By December 2017, Under Armour was generating over $5 billion in annual revenue and had over 15,000 employees. The brand has been and is currently worn by big name athletes such as Stephen Curry, Tom Brady, Cam Newton, Carey Price, Misty Copeland, Dwayne Johnson and Lindsey Vonn.

Despite all of Under Armour's success, they weren’t the only name in the game. You might have heard of a company by the name of Nike. Nike is the largest footwear company in the world, while Under Armour is the fastest growing. Nike has the seniority on Under Armour if you will, in the sense Nike was established in 1964, whereas Under Armour was established in 1996. So, with Nike having a 32 year advantage over Under Armour, Nike had already established their market. The reason this “David vs Goliath,” competition is so important is because it allows for ingenuity. While Nike has been established for a while, and has catered to the multi diversified demographic, Under Armour used this to their advantage. As any other competition understanding your opponent is key. With the sports clothing and footwear market being so monopolistic, it’s important to stand apart and establish some sort of dominance or separation. Even though NIke is much bigger, Under Armour has found ways to stand apart. Nike, has it’s line with Micheal Jordan, which has been popular for years and years. However, with the emergence of players like Kolbe Bryant and Lebron James, the aging demographic, that were Jordan fans, aren’t buying as many sneakers these days. The Jordan brand is still popular, but Nike had to brand Jordan as it’s own brand and establish new relationships. For example, the University of Michigan uses the Jordan brand for their football uniforms. So, whereas Nike was a “sneaker brand,” Jordan brand has grabbed a piece of the market in numerous factions. From cologne, to college uniforms, and even underwear, Jordan brand has become its own entity. So, with this notion of partnering with celebrities and getting into other industries, Under armour joined the band wagon. Under Armour, seeing the potential in signing athletes, and understanding today's demographic, signed athletes that fans today can relate too. So, similarly to how Nike used Jordans popularity to gain customers, Under Armour did the same. As of today a few of Under Armour's athletes, to name a few, are Tom Brady, Stephen Curry, Lindsey Vonn, Joel Embiid. With the success of not only these players, but their teams, Under Armour has been able to grab a big part of the pie of endorsement and fan relationships. Another big move that helped Under Armour establish their place and compete with Nike, was the partnership with Dwayne the Rock Johnson. With the Rock’s collection named Project Rock, and Through the work, Under Armour has regained some prominence in the area of athletic clothing. In fact, Under Armour was struggling with its partnership with Dick’s Sporting goods. It wasn’t until Under Armour’s partnership with the Rock, when Under Armour sales skyrocketed saving the partnership. So, without competition companies wouldn’t have the motivation to not only provide its customers with new products, but also quality and innovative products.

Economic trends are simply defined as the overall direction in which a nation's economy is moving. This is important to a business because it allows them to make accurate and effective plans for their company. Business is built a lot around supply and demand. There are times when people need to determine whether it is worth spending their money or not. Wants and needs play a big part in decision making when it comes to consumers. With that said what impacts that decision making? When the economy is good, consumers are more likely to spend money, that's obvious. However, when the economy is bad, people now need to make decisions. According to thesimpledollar.com, %76 of Americans live paycheck to paycheck. Also, according to the same website, the average american spends $1604 on clothing per year. In the grand scheme of things that isn’t a lot of money. Considering the average american also spends $2482 on entertainment per year. Now, there are people who make more and spend more than the average american, however not only are they a smaller percentage, but they tend to buy more expensive and name brand products. Gucci, Versace, and Prada being some of the top selling product lines for the wealthy, doesn’t necessarily fit into Under Armour's target market. So, understanding what the economy is doing allows you to meet the needs of your customers and also hopefully convince them to spend that $1604 dollar budget on Under Armour. How does a company like Under Armour do that, by offering sales, opening outlets, and offering special discounts to first responders and military personnel. Considering the current situation we find ourselves in with COVID-19 many companies are feeling the impact. There really wasn’t any way a company could prepare for this persay. So, with the closing of their stores and with many people losing their jobs, companies had to adapt. Companies like Under Armour started relying on their websites for sales, to make up for the lack of in store sales, and then offer sales to address the unemployment rates. Many companies have also started offering first responder and military discounts as well. Under Armour for example, normally offers a %15 deal for military and first responders. However with everything going on they are offering %40 percent off to first responders and the military. Another way that Under Armour has tried to compensate is at their outlets, they normally offer their products at a discounted rate anyway. For example, an Under Armour t-shirt might cost $35 at Dicks sporting goods, but would be $19.99 at the outlet. Well right now with business being all online, Under Armour is offering free shipping, additional %20 off as well as numerous other promotions. So, understanding economic trends, will not only allow you to try and prepare for certain circumstances, but also help you get through them as well.

As I mentioned, with the current situation, almost all companies are depending on sales from their websites. Whereas these websites might not generate as much sales when the product is available in stores, global marketing can now be much more beneficial. Global marketing, according to cleverism.com, is defined as the process of adjusting the marketing strategies of your company to adapt to the conditions of other countries. If a business chooses not to extend internationally, it can face domestic competition from international companies that are extending their international presence. So, basically what this means is without global marketing you are not only limiting yourself to potential customers, but you are also allowing your competitors to possibly steal customers from you. As a company, doing a SWOT analysis will help you understand and influence your decision making and how to proceed. In specific with Nike and Under Armour these two companies are sports dominated. The benefit of that is sports are global. From baseball to the NFL and soccer, sports are watched around the world. Not only are sports watched all around the world, but athletes from all around the world are now participating. With athletes such as David Beckham (England,) Yao MIng (China,) Albert Pujos (Dominican Republic,) Anna Kournikova (Russia,) and Annika Sorenstam (Sweden) the supply and demand from global markets is incredible. Fans from around the world want to not only support their homegrown hero, but wear the same clothing. So, what this does for business, is allows a company like Under Armour to not only supply clothing to other countries, but offer free or reduced shipping. In a global market, especially during a pandemic like COVID-19, all economies are impacted. So, understanding this allows a company to still get their product out their buy offering special promotions and discounts in order to satisfy and meet the needs of customers world wide.

In conclusion the importance of history essay, having not only a business, but a successful business is based on many factors. From competitors which inspire innovation and change, to economic trends, and global marketing, which can significantly impact sales, understanding your market and demographic is key to success. Having a quality product at an affordable price not only entices new customers, but keeps life long customers. Brand loyalty is something a business wants to strive for. In order to keep a customer happy and satisfied you need to meet their supply and demand needs as well as convert their want into a need. We all want things but deciding what we need is what dictates our buying decisions. When a customer makes a decision that they need something, as a business you want to not only meet that need, but exceed it. 

“The experience of the customer must be top of mind in everything we do from designing new features to crafting technical content. Without this cultural change, all the technology and tools in the world won’t matter.”