SWOT Analysis
Company name: Lululemon Athletica Inc. (NASDAQ:LULU; TSX:LLL)
Product: Lululemon Athletica produces yoga-inspired athletic apparel for both women and men.
Strengths
#1. Innovative Design Process
Lululemon offers high-quality premium athletic apparel that is designed for performance, comfort, functionality and style. The innovative design process is attributed to a number of factors such as, real-time customer feedback. Lululemon seeks real-time customer feedback on the design and development of new and existing products. By directly integrating the customer into the product development process the design team can understand and directly respond to consumer needs and wants while creating innovative designs that
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#2. Inadequate Inventory: “Lululemon’s growth is “stymied by inadequate inventory of popular items”[3] and sizes which often results in expensive air freighting of product from overseas.
#3. Perceived female focus:
Lululemon was launched as women’s only athletic apparel company, making it difficult to reeducate consumers that the company also carries men’s apparel….
Or
#3. Price Point – There are other brands in the marketplace that offer the same product but at lower price point…
Or
# 3 Perceived as a yoga only brand………….
O: Opportunities
#1. A growing number of yoga participants in United States and Canada
Over the years Lululemon has built significant brand equity among yoga enthusiasts. The number of yoga participants in the United States has jumped more than five-fold, from three million in 2000 to 16.5 million in 2005, growth opportunities for the business are excellent.[4]
#2. Excess commercial real estate
Due to the down turn in the economy there are increasing retail vacancies allowing Lululemon to negotiate favorable leases in Class A properties.
#3. TBD
T: Threats
# 1 Weak economic conditions
The current weak and volatile economic conditions, particularly in the United States and Canada, have impacted consumer spending. These week economic conditions will continue to impact consumer spending and purchasing habits for the foreseeable future. Consumers’
Lululemon’s primary target customer is a sophisticated and educated woman who understands the importance of an
The brand discussed in this report is Lululemon Athletica Inc. The brand is an athletic apparel retailer, whose main objective is building a community with a healthy lifestyle. Lululemon’s target market is middle/upper class 30-year-old woman. The brand is positioned as a premium high fashion brand for the athletic community. Some of Lululemon’s main competitors include Nike, Under Armour and Gap.
Lululemon is one of the Canada’s best retailers of technical athletic yoga apparel. Lululemon’s yoga inspired apparel is marketed under the two brand names Lululemon Athletica for more mature women and Ivivva Athletica for younger girls. Lululemon primary target customers are educated and hard working women, who understand the importance of healthy and active lifestyle. Majority of these women are Caucasian who are mainly urban and have higher income, since Lululemon is an expensive brand .Most of their products are design to offer fit, performance and comfort while incorporating both style and function. On another hand, American Apparel
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.
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.
Economic: Continued economic struggles, especially within the European Union, have the potential to negatively affect Lululemon’s international expansion(Thomas
Introduction: This business analysis will define the various problems related to the manufacture of the Luon Pants made by Lululemon Atheltica Inc. The Luon product was pulled because of a higher ration of sheerness, which made the pants. Lululemon Inc. has also been negligent with handling customer service at local retail outlets. A More so, the corporate leadership at Lululemon Inc. has been negligent in acknowledging heavier weight consumers that are not part of the “physically fit” demographic. A systems analysis of these various parts of the Lululemon corporation that need to be resolved to return the company to higher performance quality in pant materials, corporate leadership, and customer service.
The first Lululemon store was initially created as a place for people to gather to learn and share ideas about a healthy lifestyle. As the company expanded, Lulu could no longer target every individual walking into the store with knowledge of healthy living. At this point, the company shifted its focus to educating their employees who could positively influence everyone who walked into the stores. The thought and reasoning that went into the first Lulu store has continued as the company has grown. It has continued to target active people while pushing everyone towards a healthy lifestyle. Its main target market is young woman, between 15 and 34 years old, in the middle to upper classes. One of
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”).
The women's apparel market is highly competitive. With the launch of a new active-wear line from Harrington Collection's, more and more competitors will start to realise the potential value in in producing an active-wear line of their own. The active-wear market is growing so rapidly (expected to double turnover from 2007 to 2009), that eventually all of Harrington's competitors would likely be expected to launch a line of their own, relying on existing brand loyalty and high-scale advertising campaigns to capture market share and move units.
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.
They approach community yoga teachers to wear their products so they can test it and recommend it to their students. Besides this, they give them free items and opportunities to deepen their relationships with them. On the whole, being able to focus on one aspect alone helps lululemon to make them standout among the pool of competitors accompanied by their community based strategy.
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”.
Lululemon Athletica Inc. was incorporated in the month of November 2005, and is a manufacturer and vendor of practical strapping rendering attire for men, women and female adolescence. The objective of the attires is for healthful situations such as running, cycling, general fitness exercise and yoga. In the attires, it comprises aptitude britches, shorts, tops, jackets and other fitness related products like underwear, bags, bras, socks, yoga mats, yoga instruction discs and water bottles. They primarily operate in North America and Australia.