Professional Documents
Culture Documents
LULULEMON.
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Institution Affiliation.
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LULULEMON.
Lululemon Athletica Inc., based in Vancouver, Canada, is an athletics and sports clothing
manufacturer. The business began as a part-time yoga class and a clothing design boutique
(Tybout, 2017). The owner was inspired to create elastic and athletic yoga trousers after seeing a
shortage of excellent yoga gear. Even though the firm has previously designed other sports gear
for snowboarders and skiers, the yoga pants were its most successful product. Lululemon
Athletica, its current brand name, later established its first large shop in Vancouver (Tybout,
2017). that first limited the company's activities to the Canadian market, but when it began
trading publicly, it expanded. Franchises have accounted for most of the company's growth
(Tybout, 2017).
When it comes to development and expansion, Lululemon is now one of Canada's most
promising companies (Qian & Zou, 2021). Lululemon, for example, had 188 locations
worldwide by 2012, in addition to a significant internet presence in Canada and other countries.
As of 2012, the Lululemon company is worth more than $3 billion. This is a 292 percent increase
over the previous year (Agnihotri & Bhattacharga, 2019). Women's yoga gear is the company's
flagship product, accounting for over 40% of sales. The firm also provides additional sporting
apparel, such as casual and running attire (Agnihotri & Bhattacharga, 2019).
high-end clients. As a result, the firm has maintained control of its brand image and distribution
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networks. Individuals like instructors and yoga teachers serve as the primary brand ambassadors
The company's main strength is brand devotion, compared to a cult following by some
analysts (Kim & Lee, 2020). This impression stems from the company's ability to establish a
market presence and expand via grassroots efforts. Because this business strategy is not
common, this technique sets the firm apart from the others (Grabner, 2019). In addition, the firm
supports the community-yoga concept by providing free yoga classes in the majority of its
locations. Because the business retained brand ambassadors, this technique has allowed it to
Additionally, the brand is linked to several populist ideas, including health and fitness
and the desire for communal solidarity. The firm plans to extend its retail locations outside of
North America in the future and raise brand recognition (Kim & Lee, 2020). In addition, to make
its marketing strategy more acceptable in the present climate, the company plans to offer new
items and technology in the future. The company's financial situation was 3.3 billion dollars
during 2010, but it has since climbed to $47 in 2012. After a worldwide suspension of its
trousers and the following management change in 2013, the firm suffered a financial setback
Primary Rivalry
Over the past several years, the yoga gear business has gotten more competitive, "
drawing both huge worldwide brands like Nike and smaller start-ups like Prana, as well as Lucy
Activewear," according to the report (Diao, 2021). Because of its scale economies and well-
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established distribution networks, Nike is the most formidable competitor for Lululemon
vying for its business, it has Lululemon's business strategy have much-negotiating
2021). For example, the In today's business climate, business must guarantee that
company's raw materials, like the globe is flooded with new its items are high-quality and
cotton and rubber, are and emerging brands, most of inexpensive. Consumers will
plentiful in Canada, giving which are promoted over the not be able to take advantage
choices. As a result, suppliers face of fierce competition, a costs due to this technique.
internet-based business.
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competitors.
External Analysis
Several economic factors, particularly The present political climate makes it simple
stringent European Union regulations, have for a Canadian corporation to grow into North
hindered the company's growing pace (Xu, America. Lululemon has also secured
2020). The slowing of major global significant patents in several countries across
economies, such as the US, has reduced the globe to safeguard its commercial
production costs.
The company's support of good health is one Since most of Lululemon's items are
the current trend of adopting an active company's business strategy. For example, the
lifestyle (Xu, 2020). The number of people firm has reached out to new audiences and
who practice yoga as part of their daily demographics using social media (Xu, 2017).
routine, for example, is expected to rise in the Lululemon, on the other hand, faces more
Demographics
Lululemon's items are not inexpensive, as many buyers are aware. Lululemon has continuously
had a greater inventory turnover rate than Nike, Adidas, and Under Armor
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The graph shows that the yoga clothing specialist had an asset turnover ratio of roughly 12 in
2011. (Schorer, 2017). Although Lululemon's inventory turnover has decreased, the company has
The retail sector had a significant traffic slowdown a few years ago, putting a strain on
revenue growth for many businesses (Thomas & Peter, 2015). This helps explain why the leading
sports clothing firms have lost some inventory movement efficiency during the previous five years.
Lululemon routinely outperformed its competitors in terms of inventory efficiency. There are
many significant reasons behind this. To begin with, it prefers to issue minimal amounts of particular
designs and colors, which allows it to better balance supply with demand (Thomas & Peter, 2015).
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This increases the product's value in the eyes of devoted clients, who understand that when a new style
Lululemon adds new colors and features to its best-selling core designs (Thomas & Peter,
2015). However, to boost sales and transfer inventory quicker, the brand has effectively used limited-
It also helps because, unlike Nike, Lululemon concentrates only on yoga and training apparel
rather than a wide range of products. However, the brand has begun to go into footwear and clothing
Given the company's initial strong growth and improved inventory turnover, it's evident that
the new categories are paying off for management (Thomas & Peter, 2015). This gets to the following
Internal analysis
The company's distribution networks are one of the most critical assets for Lululemon. The
corporation now operates three main networks in Sumner and Melbourne (Kosbab, 2017). Patents,
trademarks, graphics, and brand names are all examples of intellectual property owned by the
corporation. Lululemon's goods are difficult to replicate because of their well-known brand name in
North America. The company's physical form, mainly in the North American market, is another
critical resource (Kosbab, 2017). In the United States, Canada, and Australia, the firm now has over
200 locations. Because Lululemon has distinguished itself from its competition, its brand name is
another intangible property (Layrence & Lozanski, 2014). Its strong brand image has also earned it a
One of the company's talents is operating an inventory control system that assures that items in
its shops are artificially scarce. When things are accessible in shops, this inventory strategy
encourages customers to buy them right away. Lululemon has also proven its worth (Qian &Zou,
2021). For example, the group has successfully established specialized distribution networks.
Customers may get much-needed yoga sessions and instruction on healthy living via the company's
services (Qian &Zou, 2021). The capacity to create unique and technologically relevant items is
another essential quality of the organization. Advanced personnel training has also aided long-term
Strength. Weakness
module compels them to consider and • The company has a tiny worldwide footprint,
comprehend their consumer base which puts it behind rivals such as Nike.
Opportunities. Threat.
improvement. The brand's revenue growing sports retail sector (Boison, 2016).
might considerably increase to expand Other competitors, such as Nike, are attempting
its worldwide reach. The retail to grow their markets so that Lululemon might
Lululemon Athletica has chosen to specialize on the design and manufacture of technical
Diversification:
qualities (and critiques). Special or deluxe editions lines for other hobbies, such as golf, tennis,
and cycling, are periodically shown alongside sportswear, but no long-term intentions to include
these goods into their main product range have been developed.
The sibling brand Ivivva Athletica, which caters to pre-teens, was launched in 2009. The
initial concept was to attract young girls whose moms buy at Lululemon and who had sporty
parents (Kim & Lee, 2020). Ivivva Athletica's goods are now 30% less expensive than
Lululemon's, and the company's product range concentrates on dance as well as gymnastics, with
Only North America as well as Australia sell Lululemon at the moment. Because the
cultures and behaviors are similar enough, Lululemon has already been able to implement a
worldwide plan while maintaining a consistent product line and marketing strategy (Tybout,
2017).
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Integrate vertically:
Backward and forwards vertical integration are both used by Lululemon. All Lululemon
goods are created solely in Lululemon-approved facilities, after a stringent selection process and
regular assessment by the company's worldwide sourcing and leadership style. Lululemon items
are also exclusively available in-store or online at the Lululemon website (Thomas & Peter,
2015).
Differentiation.
unique fabric, the signature "Luon," Lululemon paved the way for high-quality, high-
2021). The continual differentiation approach includes the introduction of unique, original goods,
The first strategy was to focus on creating and producing technical apparel for a specific
target market: yogis. While Lululemon's product range (and hence market segment) has extended
to include runners and other multi-sport practitioners, the company continues to pursue a targeted
differentiating approach. Since the first shop opened in 1998, the company has shifted its
approach as a consequence of its success (Grabner, 2019). The success of Lululemon's sales to
not only yoga practitioners, and other athletes and consumers looking for stylish and functional
gear for their activities, indicated a gap in the fitness-fashion industry that the company
effectively exploited.
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Forever Innovation
Lululemon's general strategical ideology of health, wellbeing, and personal kindness has
led to the company's innovation push. Lululemon has long been known for its forward-thinking
approach to clothing (Thomas & Peter, 2015). The corporation is recognized for its continuous
provide unique service value to customers, and it has a considered as significant R&D
department.
Lululemon is altering its marketing strategy to focus on high-level digital celebrity. The
brand is positioned as an important part of the fitness community in order to establish long-term
connections with sporting teams, fitness centers, including yoga studios (Kosbab, 2021).
These collaborations are widely publicized on social media, as well as via fan-driven
Collective. The Sweat Collective is a collective of the "sweatiest leaders in the planet." These
individuals work out of fitness studios. Instructors, members of running clubs, athletic trainers,
and experts or Olympic athletes that use and promote Lululemon's products make up the bulk of
the membership. The Sweat Collective participation enjoys special treatments, rewards, and
public recognition. This campaign not only helps the organization develop a strong digital
presence, but it also enables it to form international collaborations with well-known people
throughout the world (Thomas & Peter, 2015). By informing customers when it's their turn to
enter, Lululemon built a virtual line to reduce customer contact and overcrowding in its stores. It
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was used by approximately 400,000 unique visitors in August of 2020, when it was introduced
Lululemon is a retailing firm with a lot of success. Their retail locations are among the
top income earners per square foot across all US businesses. The company's popularity, however,
tends to spread outside the United States (Thomas & Peter, 2015).
Lululemon appears to believe that China and other parts of the world have a better chance
of embracing new creative items, such as their new men's sports clothing collection. In order to
reach a wider audience, Lululemon collaborated with Mr. Porter to create special sportswear for
men. This campaign has increased men's awareness of the brand. By 2020, men will make up
roughly 30% of all new Lululemon purchasers. (2015) (Thomas and Peter). Lululemon's most
popular line is for women. However, the brand is going to experiment with and generating new
accessories as well as clothes for men as well as other areas in order to expand globally.
Lululemon has utilized information technology in its strategic management throughout its
existence (Xu, 2017). In 2008, GAP Inc., Lululemon's primary rival, bought Athleta, an online
retailer of women's sportswear. Lululemon's unique market was challenged by this shift, which
presented a considerable threat to the company (Xu, 2017). The firm worked rapidly to create a
business site that could compete with what Athleta offered. By 2009, the corporation had figured
Institutional issues were also present in the company's online selling. For example, the
firm struggled to manage inventories of its items since customers anticipated varying degrees of
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reductions on both online and physical platforms (Xu, 2017). Customers were dissatisfied,
according to reports, since they did not get the discounts they were accustomed to receiving at
other online retailers. This trend shows how IT plans to collide with different priorities. The
problem with Lululemon was that stocks for retailers and supermarkets shops were supposed to
match. The danger posed by GAP Inc.'s acquisition of Athletica worked as a stimulus for a
technology-driven approach.
Although not flawless, this method inspired Lululemon's future tactics. The company's
capacity to gather and adopt changes from online consumers, for example, is a critical strength.
IT also assisted the organization in maintaining its competitive advantage, growing, and
company's business went online, indicating that it lacks robust IT procedures. In the previous
five years, the number of people who have died has risen dramatically. The business now has a
Chief Knowledge Officer, who is in charge of coordinating its IT plans (Xu, 2017).
Concerning Lululemon's business model, there are many chances for IT strategy
implementation (Boison, 2016). The firm can strengthen its market position and flourish by
taking advantage of all available options. To begin, the business may create a data farm to boost
awareness of its offerings (Boison, 2016). Companies, on either hand, can now make the most of
big data thanks to modern technology. This IT strategy can help the company's decision-making
organization may exploit its position in the market and broaden beyond yoga and running by
Furthermore, this smooth business model does not make customers suspicious when
implemented effectively, but it increases brand recognition (Qian &Zou, 2021). The online
market currently burdens consumers because they have too many options. As a result, modern IT
methods should place a greater emphasis on brand awareness rather than marketing. The
customer is spared the agony of sifting through thousands of options when using an instantly
identifiable and reliable brand (Qian &Zou, 2021). Lululemon can use a holistic model to
approach than Nike. It doesn't offer shoes (yet), and its concentration is on yoga-inspired
essentials (Kosbab, 2021). Its proprietary textiles, like as Nulu and Everlux, were created for
(Grabner, 2019). It's also used e-commerce to its advantage. All of this contributed to its
Although Luluemon has exceeded Nike in sales and increase, the two companies' e-
commerce growth rates have been identical, and Nike has expanded rapidly at a quick pace to
Both Nike as well as Lululemon have robust corporate strategies that are poised for
development, and their stocks are as well (Kim & Lee, 2020). Nike's stock is up over 7% year to
date, while lululemon is up around 58 percent, and Nike's annualized five-year return is 14
percent, while Lululemon's is 42 percent, as of Thursday's closing. Lululemon’s stock has always
been overvalued, with a forwards P/E ratio of about 76 times expected profits for the next four
As "athleisure," or wearing athletic gear as casual apparel has grown increasingly trendy,
both Nike and Lululemon have been at the top of their game. Walking around in yoga pants and
hoodies is now almost expected in the epidemic age (Thomas & Peter, 2015). As more
individuals worked from home and chose to laze about in comfy attire, the great office-clothing
throw resulted in the folding of legendary menswear firm Brooks Brothers, as well as numerous
other businesses. Casual attire has becoming increasingly accepted in the workplace as well.
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Lululemon has demonstrated that it is more than a fad, and that it can continue to develop
and provide strong returns for investors. Nike is a solid and consistent option that has produced
great returns and has the ability to retain a healthy lead over its rivals, but Nike has demonstrated
that it is more than the flavour of the month and has the ability to do so (Boison, 2021).
Nike is the dominating player, with such a large lead that it would be difficult to overtake
them, particularly when the company is always innovating and improving both its line of
products and strategy (Tybout, 2017). Lululemon is expanding its consumer base and providing
items that match their lives. However, they each provide a unique benefit to your portfolio,
making it difficult to decide which the superior choice is. Nike's growth is slowing, and given its
high price tag, it's becoming a more affordable option (Tybout, 2017). Investors should not
anticipate large profits in the short future since the company is expensive at 40 times trailing 12-
month earnings. Nike, on the other hand, is an excellent long-term investment. Lululemon, on
the other hand, is a modest business with a lot of potential. Its stock price has dropped in recent
months, and it currently trades at 52 times earnings, which makes it more costly than Nike
(Tybout, 2017).
Conclusion.
The company's main strength is brand devotion, compared to a cult following by some
analysts. This impression stems from the company's ability to establish a market presence and
expand via grassroots efforts. Lululemon's success has also been attributed to the company's
the brand's global reach, the company's revenue could skyrocket. China and India have promising
distributors and retailers, and the corporation should increase its substantial form in these countries.
Reference.
Agnihotri, A., & Bhattacharya, S. (2019). Executive Crisis at Lululemon: Who Is Responsible for
Baalbaki, S., Gilliard, D. J., & Hoffman, D. L. (2019). Is Lululemon Athletica's Turnabournd
Boison, R. A. (2016). A social media case study incorporates Benoit's image restoration theory
in crisis communications.
Professional Brand Image and Close to life Promotion. In 2021 3rd International
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Atlantis Press.
Grabner, S. (2019). The S&P global ratings' issuer credit rating process applied to Lululemon
Kim, S. S., & Lee, H. Y. (2020, September). A Study on the Factors Affecting the Performance
Lavrence, C., & Lozanski, K. (2014). “This Is Not Your Practice Life”: lululemon and the
Qian, Z., & Zou, J. (2021). Brand Community Strategy of Lululemon: The Relation Between
Rapp, A., Beitelspacher, L. S., Grewal, D., & Hughes, D. E. (2013). Understanding social media
effects across seller, retailer, and consumer interactions. Journal of the Academy of
Thomas, J. B., & Peters, C. (2015). Lululemon Athletica and a series of bad marketing
Xu, W., & He, Y. (2017, July). Study on Lululemon's Marketing Localization Strategy in China
Xu, W., & He, Y. (2020, July). Study on Lululemon's Marketing Localization Strategy in China