Lululemon Internal Analysis Essay

2539 Words Nov 5th, 2014 11 Pages
Internal
Analysis

Submitted to: Professor Ken Grant
Course: BUS 800 Date: October 22,
2014 Team Members: Samia Attlassy,
Peter Burkholder, Maria Castellanos,
Bobby Panesar & Feroze Shah
Team #9: Strategy+

Internal Analysis
Overall Current Strategy
*The following information taken directly from the case*
• Grow the store base in North America, primarily United States
• Open additional stores outside North America
• Increase awareness of the lululemon brand and apparel line
• Incorporate next-generation fabrics and technologies in the company’s products to strengthen consumer association of the lululemon brand with technically advanced apparel products and enable lululemon to command higher prices for its apparel
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Although some years the value did decrease by a few percent, in 2012 the gross profit margin is the highest it has ever been since the fruition of the business.
• Net Profit Margin o In summary this analysis shows the percent of every dollar in sales that is profit. As seen in Figure 1, in the Appendix, the boxes highlighted in red showcase the net profit margin values. From 2007 lululemon has had growth in their net profit margin, which in summary showcases their ability to be an efficient business resulting in increased profitability. From 2007, with a net profit margin of 5% to a current net profit margin of 18% in 2012, lululemon is essentially making $0.18 profit for every dollar in revenue.
Key Conclusions
Based off lululemon’s comprehensive financial data, it shows continuous growth and stability in revenue and profits. This fused with effective cost controlling measures allow for greater profitability year-to-year. With lululemon’s strategy primarily focusing on growing the store base and filling those stores with differentiated products, it puts emphasis towards capital expenditures being made by the organization. It can be assumed heavy efforts are being placed on Research and Development, which adhere to luluemon’s strategy of developing next generation fabrics that make their products superior to competition.
Additional research would be toward the site selection of future lululemon corporate owned stores. The financial data shows a

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