Swot Analysis Of Lululemon

Business – level Strategy: Lululemon is keeping concerntrating to make their company be outstanding, Health and fitness play an important key to consumer segment. By enclosing lifestyle with products, Lululemon focuses on modern life and friendship and targeting and being social. The company purpose to express good styles of life for example staffs and customers are able to participate in free yoga classes, organize ambassador campaign and hightlight the long-term operation. With social oriented strategies in selling activities, Lululemon took one step in market competition.

This report has been created with the intent to analyze the athletic apparel industry with a specific focus on Lululemon Athletica, Inc., further refered to as Lululemon. In this report you will find that the strengths and weaknesses of Lululemon’s current strategies and future goals are analyzed and compared to that of its closest competitors. In conclusion to the analysis, recommendations have been made to potentially guide Lululemon Athletica, Inc. in a positive direction in regards to its future endeavors. The following

Lululemon Athletica’s (LULU) competitive advantage hinges on the company’s use of the four management pillars; efficiency, quality, innovation and responsiveness to clients (Tsang et al, 2013). LULU achieves unrivalled efficiency through outsourcing and technological advances. Even though LULU continues to design their merchandises in Canada, the manufacturing is outsourced from countries such as Bangladesh, China and Indonesia. The company has benefited from technological advancements by allowing customers the comfort of buying merchandises online, through the company’s website, which comprises of free shipping straight from the manufacturing plant, and thus saves on shipping costs, time, as well as retail store resources like signage and employees.

Lululemon Athletica produces high quality active wear at a premium price. The business has attracted customers by creating an environment/culture that fitness-oriented customers enjoy and respond to. According to (Beyer, Faifman, Ho, Kezunovic, & Olian), Lululemon understands their customers as well as their target market. Lululemon provides guests with an unrivaled experience, which has created many loyal customers that are quick to tell their friends and family about the company. Employee training and product knowledge is an important element in Lululemon’s strategy because employees are able to provide relatively technical answers to guests’ questions about their products.

Lululemon’s strategy is not only sell the product, they also offer healthy life style and targeting very specific segment which is customers who do yoga. Their competitive advantage is they offer benefits except a good product such as physical

Customers make purchasing decisions based on the information they have among products and the values of goods a company offers. For that reason, companies have to promote their products to increase products awareness. In order to achieve organizational goals, companies must understand the market’s needs to ensure the success of their businesses. Such information can be gained through research. The industry that will form the basis of this paper is Western Canadian Shoe Association. The three brands under study are Reebok, Adidas, and Nike.

Lululemon Athletica Inc. thrived off its 5 key elements in their growth strategy which helped to acquire a stronger revenue base that enabled them to have a differentiated product line,design and culture. Trademarked fabric and technology helped their brand loyalty which enabled them to get products in and off the shelves in a 2 month period. Additionally 95% of its inventory was sold at regular price. This was attainable because of the strategic multi-channel approach used to enhance its market presence

The Lululemon brand ranked highest among their competitors for “luxury fashion apparel”. Organizing a like-minded community for body-conscious and health-aware as well as fashion-pursuing female customers is one of the most fundamental parts of Lululemon’s marketing strategy. Lululemon is the first mainstream clothing company to really put the “salon” business model into every detail of their business management. Resembling the core of Apple’s retail strategy, in which like-minded thinkers came together to share their own opinions, culture, and theories. Customers go to the Apple store and salesmen will teach them how to use the products. Lululemon will do the same thing, they could teach customers. In recent retail environment, buyer and seller are put on the same sides under the effect of this strategy. Both are focused on an idea of self-betterment that overshadows the commercial transaction itself. This ethic strategy transforms the stores into a space for personal communication with low pressure. The employee have the chances to talk to the customers about their passions and pursuits, and customers will select the ideal garments with the help of the employee. The final purchase transaction comes to be an investment in customers themselves, representing their own ideas and goals. In fact, Lululemon keeps setting goal behind the counter to make customized service to guests. Salon-model strategy is a trend to interest consumers overtook the desire to just own or consume more

Lululemon is the third leading speciality sports apparel store, behind Nike and Adidas (appendix 1), retailing for women and a small range of men. They have capitalised on the growing trend of fashionable gym and street clothes (Ibisworld, 2016). Their vision is “Elevating the world from mediocrity to greatness”, through their 350 stores and online store shipping to 80 countries (Lululemon, 2016). A SWOT analysis in appendix 2 reveals the sustainable niche of Lululemon’s market, while below demographics, social trends and environment macro-environmental factors are discussed due to their relevance to Lululemon as a modern brand, the others are outlined in appendix 3.

The industry that Lululemen operates in is the Women`s Apparel industry which is a mature, large and fragmented market that has highly sensitive to the economic conditions and trends.

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.

As the brand name of Nike continue to soar, other companies in the industry; learning from the success Nike has experienced, start focusing more on brand development to keep up with the increasing levels of competition. These companies resort to brand maintenance, which has become the main target in this industry due to product differentiation made by Nike. Nike, being market-advantaged, produces an extensive range of products, through which it gains a balanced level of profits. This has influenced rival companies to initiate a new range of products in their businesses too. Previously these companies had high risks of failing in business, if their single products did not appeal to the market. Due to the impact of Nike’s business strategy, the other companies are also enlarging their product range,

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”.

Brands use different strategies to create competitive advantages to beat with their rivals. Some companies use “Overall Cost Leadership” to increase profit by reducing costs and increase market share by lowering price. Some companies use “Focus Strategies” to select a group of market and tailor its strategy to serve that group. The others use “Product Differentiation” as a strategy to obtain a premium price by making unique products. Nike, with its differentiation strategy, the company is continuing to separate its self from the competitors by using its superior technology and innovation. This paper mainly discusses on the company’s product differentiation and analysis how the company using this strategy to build its brand image and become a market leader in sportswear industry. A brief discuss about Nike competitive advantage which related to its broad differentiation aspect and the company product life cycle are also presented on this paper.

Sport Apparel is a large industries with many firms such as Nike, Adidas, Reebok, Under Armour, the Gap, Athleta, Nordstrom, Lucy and Bebe store. Large industries allow multiple firms and producers to prosper without having to steal market share from each other. Large industry size is a positive for Lululemon Athletica. … This qualitative factor will lead to an increase in costs.