I. SITUATION ANALYSIS
The global fitness and athletic clothing stores industry generates more than 1.9 billion US dollars per annum (IBISWorld, 2015). Lululemon Athletica provides high quality apparel for the ever-growing global health conscious population ("WHO | World Health Statistics 2015", 2016). A SWOT analysis (Appendix 1) illustrates potential and weakness of this hugely successful brand. Furthermore, environmental factors can play a role in the company 's operations.
Macro Environmental Factors –
Demographics forces make up the market segments therefore it is an important factor to any business. Including, age, gender, ethnicity, location, lifestyle and other statistics (Grewal, Levy, Mathews, Harrigan, & Bucic, n.d.). The
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In order for a company to gain a superior position in the market, the company needs to analyse their competitors’ products, prices and strategies and offer better benefits or products to the consumers.
II. MARKETING GOAL
Increase overall brand awareness and also increase market share by 2% in the next 12 months.
III. MARKETING STRATEGY
Target Market
Lululemon continues to pursue a strategy of focused differentiation, concentrating on a consumer segment concerned with health and fitness (lululemon athletica, n.d.). An in-depth research portrays Lululemon 's main focuses of marketing campaigns for women; however, they do carry products for men as well. Lululemon describes its "target customer [as] a sophisticated and educated, middle-aged woman who understands the importance of an active, healthy lifestyle." ("Lululemon Athletica, Inc. - Annual Report", 2016). Also, Lululemon portray their product image as: independence and confidence, targeting women who are willing to spend on exercise apparel ("Lululemon Athletica, Inc. - Annual Report", 2016). They benefit from the growing number of people that participate in yoga, their primary target. Although, Lululemon intends to increase the percentage of products sold to different demographics for different needs, believing this will continue to increase their market share as product range broadens (lululemon athletica, n.d.).
For Lululemon to optimise their opportunities, a further look at
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.
To obtain sustainability and competitive advantages among business in both domestic and international market, a call for a clearer and deeper understanding of the market is needed in order to stay on the top of their competitors.
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.
Lastly, the company suggest to expand their current inventory through increasing production and capacity. With the increase in production rate the company can gain more consumers as a whole through supply and demand. Doing this would give the company an opportunity for more exposure and perhaps better brand recognition.
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 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.
After an in-depth analysis of Lululemon and its strengths, weaknesses, opportunities, and threats, we have highlighted the most important factors from each of the previously stated categories that will both increase Lululemon’s profits in the short run and lead to long-term success. To begin, Lululemon is more than a clothing retailer. It is a lifestyle promoter. A lifestyle of health, well-being and the pursuit of internal happiness. Thus, they are not selling their merchandise at a price point related to the materials and labor hours associated with the product.
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”.
A company needs to create a series of programs to differentiate their product from those from its competitors and to appropriately price the product to achieve the maximum demand, in order to set up the dynamics of its competitive strategy (David, 2007). The competitive strategy of a company is also expected to offer better products or services to its customers, at a reasonable cost. Due to the mass influence of the external environmental on the customers’ preference, it is vital for the company to develop an available competitive strategy to be able to solve a series of problems, and ultimately to improve the company’s performance. Those problems include: how to differentiate its products or service from competitors, how to create market segments to maximize demands, and how to offer a wider range of products or services to better meet the customers’ needs at more acceptable costs (David, 2007).
Lululemon manifesto has themes such as "do one thing a day that scares you, friends are more important than money and other inspirational sayings that create a large following for the company. The company gets its publicity from many marketing strategies including word of mouth. The company, According to Brittany Snow, Guest Educator at Lululemon focuses their marketing efforts on grassroots initiatives in the local communities and currently does very little print work. The popular manifesto has been a big seller for the company's brands, but even though the company has been able to use this manifesto as successful marketing tool are still major problems the company is confronting. lululemon is facing many changes as an
Increase market share by gaining and maintaining the good reputation in the market by 1% each year.
Knowing who your competitors are, and what they are offering, can help you to make your products, services and marketing stand out. It will enable you to set your prices competitively and help you to respond to rival marketing campaigns with your own initiatives. You can use this knowledge to create marketing strategies that take advantage of your competitors ' weaknesses, and improve your own business performance. You can also assess any threats posed by both new entrants to your market and current competitors. This knowledge will help you to be realistic about how successful you can be.