1.0 KEY ISSUES
The main issue that Lululemon is facing is the mass decline of stakeholder satisfaction, including customers and shareholders, associated with general public criticism regarding actions of the company prior to the recall of the Luon yoga pants and the management of damage control and the recall. Specifically, these criticisms were targeted at the quality of the Luon pants, the comments made by the company regarding the pants, the controversial advertisements in their stores, the alleged dishonesty of the company, and the values of the company that were publicized through these proceedings. Moreover, each of these factors in turn, as a part of the overall issue of stakeholder dissatisfaction with the activities and behaviour of the company, at the general time of the Luon pants recall helped to exacerbate the situation to the point where the stock prices fell significantly, the CEO of Lululemon resigned, and the company incurred heavy losses in the process of recalling the defective pants.
2.0 ANALYSIS
The company has arrived at a state that is attributed to a few factors, each of which reveal that the changing stakeholder values are not necessarily in line with the values that the controversy of the Luon pants has helped bring to the forefront of this discussion. These factors include quality control, business ethics, publicity and company values.
2.1 QUALITY CONTROL
The first factor is the quality of Luon pants. The general consensus is that the
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.
Unclear brand image: made many changes that have strayed from their main brand image and focus.
Finally, Lululemon’s founder, Chip Wilson, made a publicly offensive suggestion, that some women’s bodies were not made to wear his yoga pants. “The problem was that the yoga-apparel company has been having with its pants on the size of women 's thighs” (EBSCO, Nov 14, 2013). After making those comments discourage plus size customers were embarrassed and felt like they don’t want to shop at the store anymore. Some women blamed CEO for making products that don’t last long. One of the examples from Financial Post. However, despite the unfortunate occurrences last year Lululemon is in a very healthy position in the Canadian and US markets. In addition to that, Lululemon’s baggiest competitor is now Sears Canada. Sears became a new stop for consumers who want high-quality and affordable yoga gear. “The struggling department store chain says its Pure Energy Athletics line of yoga clothes has been a hit with customers since they were introduced in February. The chain says it sells yoga pants for $14.99 or $29.99 — a steal compared to similar clothing from other retailers, like Lululemon Athletica” (Edmonton Journal, May 21, 2014). However, Lululemon has a tremendous
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 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.
The main issue the company faced is quality control issue impacting brand image. There is narrow focus in both consumer segments and product line. There is also limited brand recognition and limited geographic market such as America. The quality of yoga pants were not good because customer companied about sheer Luon Yoga Pants and the fabric is so see through.
The company plans to launch stand-alone men's stores by 2016 and expand their business globally. That same day, the company announced plans to quit the Toronto Stock Exchange (TSX) due to a lack of trading on the Canadian exchange, stating that the expenses associated with having a dual listing were not justifiable(Nichols, 2016). The one remark that sent the media in a frenzy was in response to the public criticism of the sheer yoga pants, Wilson explained, “Quite frankly, some women’s bodies just actually don’t work for it. Even our small sizes would fit an extra-large(Nichols, 2016). It’s really about the rubbing through the thighs, how much pressure is there.” This statement triggered massive social outrage that was felt throughout many media platforms(Nichols, 2016). With this media “fire-storm” it was clear that Mr. Wilson needs to be reprimanded in the sense of being taught to speak to the media. Christine Day has stepped down from the CEO position and corporate will need to select another leader.
Lululemon Inc. has a strong history of making quality fitness clothing for yoga and other athletic purposes by the founder of the company. Dennis “Chip” Wilson in 1998. After becoming “overwhelmed” by the company’s success in Vancouver, Wilson transferred management of the company to trained managers (Nicholes, 2016, p.6). During this time, Corporate CEO Christine Day’s leadership was put into question due to the low level quality of material used to make the Luon Pants, which had a “see-through problem” due to the extreme sheerness of the pant material. More so, in 2013, corporate leadership had a lawsuit brought against the company directors, including Christine Day, of massively raising the
Lululemon is a rapidly growing company with a different niche for its products. Its philosophy as well as their business model has allowed them to increase revenue over the past years. The dilemma they faced is how to continue expanding without losing their special niche, grassroots and a nontraditional feel of the brand that sets them apart from their competitors.
First of all, the sport apparels of Lululemon are well-designed. It is product are famous in comfortable and stylish. Secondly, the company also perform well in its supply chain management. For example, the company outsources the production to the contract manufacturers for lowering down the production cost. Besides, the company also deliver its products serval times per week for providing a steady flow of new inventory.
In 2013, Lululemon Athletica Inc found it succession of problems that damaged the company’s reputation, these included the following: (i) quality control was top on the list as there was a recall of 17 per cent of the company 's Luon pants, (ii) lawsuits issues with investors, (iii) withdrawal from the Canadian stock exchange, and (iv) bad publicity (Huang, 2014, p.5-7).
To produce a set of recommendations in a written document about how McDonalds PLC, can reduce its carbon footprint through the management of key stakeholder relationships.
A stake holder, in general is defined as an individual or organization likely affected by the performance of an organization. In “The stakeholder theory of the corporation: Concepts, evidence, and implications” by Thomas Donaldson , he quotes Stanford research institution and calls stake holders “those groups without whose support the organization would cease to exist.”
Stakeholder analysis is an integral part of what determines a business’ success. Within every business, there are various stakeholder groups that have individual specific needs. Each stakeholder group has to be consistently considered by the company when it makes decisions. Over the course of five weeks, students made decisions to help guide K-Tai, Inc. with its stakeholder analysis and corporate social responsibility (CSR) efforts. Several conflicting decisions were considered and a thorough analysis helped the CREO office come up with the best possible solutions to the company’s problems. The CSR simulation was an excellent tool to help students understand the importance of ethics in business and how to address the common issues that businesses face in today’s society.