Negative Events Of Lululemon

Because of this rapid growth several challenges can present themselves. A primary challenge that can present itself is the lost of the boutique feel because of the hundreds of locations. Even though each boutique is different and personalized, opening too many locations may cause the retailer to lose its niche in the market. Another challenge is the many changes the company has gone through in upper level management. Because of the changes investors have been discouraged, as mentioned before, and shares were down 16% after the changes.

profitability, slowing demand growth and a surge in private label sales threatened to undermine the

Lululemon faces constant competitive pressures from the five main driving forces: rivals/competitors, new entrants, substitute products, suppliers bargaining power, and buyers bargaining power.( Thompson, Peteraf, Gamble, and Strickland) Below is a detailed analysis of the competitive forces noted in Exhibit 2.

Increasing competition from Scrambled merchandising from Canadian tire & dollar store chains. Increasing competition is putting a pressure on profit margins as well.

With the instability of the political and economic climates, future trade policies may negatively impact the industry. Potential barriers to trade could result in an increase in costs for department stores. Typically, this increase will be passed on to the consumer in the form of higher prices for the same products.

Economic: Continued economic struggles, especially within the European Union, have the potential to negatively affect Lululemon’s international expansion(Thomas

Lululemon’s ability to source profitably merchandise may be affected; if new trade restrictions are imposed by The United States and other countries where products are produced or sold. These may include additional quotas, duties, tariffs, or other restrictions or regulation. Moreover, China increased in labor cost and other factors associated with production could increase the cost of product. (“Lululemon Athletica Annual Report, 2012”).

There are five categories of risks in Ralph Lauren clothing sector, including: geopolitical, environmental, social and cultural, financial, and technological (“Managing risk in the clothing sector - Anthesis,” 2015).Pure risk such as natural hazards, climate change, food, energy and water security, demographic shifts, concentration of production, commodity prices and laws and regulation can pose risks to productivity, efficiency and supply chain resilience (“Managing risk in the clothing sector - Anthesis,” 2015).

Lululemon is a large company, making clothing for athletic activities, not only are they in the women’s athletic range, but they have hit the men’s market and youth range as well. A SWOT analysis will be used to break down Lululemons strengths, weaknesses, opportunities, and threats to the business. Strengths which Lululemon have achieved include multi-faceted and community-based approach strategy, making customers feel part of a community through marketing strategies like there “ambassador program, social media, in-store community boards and grassroots initiatives” (Lululemon, 2016 Annual Report, 2016, p. 3). Touchpoints which have been a part of this multi-channel include Lululemons websites www.lululemon.co.nz and ivivva.com which is based around female youth active ware. With Lululemon having 12,500 full-time employees worldwide (Lululemon Athletica Inc. (LULU), 2017) with 406 stores (Lululemon, 2016), their large market capital of $8.33 billion (Lululemon Athletica Inc. (LULU), 2017), shows the total value of Lululemons shares of stock. Lululemon having $581.1 million in net revenue, this is an increase of 13% while their gross profit increased by 17% rising to $297.4 million. (Lululemon Athletica Inc. Announces Second Quarter Fiscal 2017 Results, 2017). This shows a steady increase in profit for Lululemon for 2017 which is a strength for them.

This paper commences by defining the problems that were faced by Lululemon Athletica Inc in 2013. After, the author explores the causes of the issues that the company was experiencing and the effects that they had on Lululemon Athletica Inc. The next step is to look at ways in which the issues could have been addressed both for the short-term and long-term. When all is said and done, the audience will fully appreciate why “Lululemon Athletica Inc should revert to its fundamentals – that is, to concentrate on the needs of the consumer”.

owners have found that demand for their product has outstripped their ability to supply it. They

Due to the geographic diversity of countries where BHP Billiton has extended to, the variation of foreign exchange rate obviously plays a crucial role on its financial performance. According to the annual report of BHP Billiton (2015), US dollar is not only the functional currency utilized in majority of sales and transaction, but also the presentation

* The recent devaluation of Pound Sterling (£1) against the US Dollar ($1.5) means, Pret spend more money trading globally, compared to when the Pound Sterling (£1) much stronger than the US Dollar ($2). This will affect their annual profits or is likely to lead to unethical trading as they look for the cheapest sources to get their raw materials.

One of the industries main weaknesses is the fact that they have a low industry ratio. Furthermore, one of their issues in past years was being geographically impotent in their retail locations, but as mentioned before, this issue is declining due to the fact that more locations are being opened worldwide.

If all exchange rates remained equal they would have reported a decline in profit of 1.0% which is a result of the world economies.