Lululemon Athletica Inc. | Document

Running head: LULULEMON ATHLETICA, INC.
LULULEMON ATHLETICA, INC.
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1LULULEMON ATHLETICA, INC.
Abstract
This assessment focuses on Lululemon Athletica, Inc. and measure the strategies whether
they will help in getting the company back on track.

2LULULEMON ATHLETICA, INC.
Background of the company
Chip Wilson was the founder of Lululemon Athletica, Inc. in the year 1998. This
company, situated in Canada, is inspired from yoga so it designs athletic clothes for men and
women. From then the company has expanded internationally and sells their product in online
as well (Lululemon.com.hk, 2020).
Porter’s five forces analysis
 The threat from new entrants is higher for Lululemon Athletica, Inc. Several athletic
apparel retail stores have started a new business function in yoga clothing (Baalbaki,
Gilliard, & Hoffman, 2019).
 Bargaining power of suppliers is not too high for Lululemon Athletica, Inc. as the
company purchases supplies from five different suppliers from Asian pacific region.
 Bargaining power of customers have a moderate to higher level of influence over
Lululemon Athletica, Inc. as the consumer switching cost is much lower and can avail
more other options in the market.
 Threat of substitutes is lower for Lululemon Athletica, Inc. because the alternative
companies cannot satisfy the customer needs.
 Rivalry among competitors is low for Lululemon Athletica, Inc. although the sales are
increasing.
Strategic performance and market position of the company
Compared to its competitors, Lululemon Athletica, Inc. has a unique performance
strategy. Lululemon Athletica, Inc. provides products to their customers, which are different
from their competitors. The company introduces their self-designed yoga and fitness clothing
after analyzing the customer needs (Tybout, 2017).

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Moreover, the company has positive and strong brand image in the market than their
competitors. The brand recognition of Lululemon Athletica, Inc. by their customers is also
higher than their competitors. It is observed that Lululemon Athletica, Inc. has only one rival
in the market and that is Athleta. However when compared together Lululemon Athletica,
Inc. has higher competitive advantage over Athleta.
Success factors of Lululemon Athletica, Inc.
The key success factors of Lululemon Athletica, Inc. leading to their success in the
yoga and fitness apparel segment are their unique and good design and their style of clothes.
The clothing are of good quality, comfortable for customers and provides a sense of fashion
with an attractive design. The strong distribution channel of Lululemon Athletica, Inc. is
another success factors as the company has their own retail stores in more than 190 countries.
The brand image, brand recognition and brand name is stronger than their competitors are.
Lululemon Athletica, Inc. also provides a value added service to their customers, which is not
done by their competitors. The company also has the capability to expand their operations in
other countries (KORS, 2018).
SWOT analysis
Strengths: Unique products are provided by the company, unique, trendy and fashionable
design of clothing and strong distribution network leads to higher sales.
Weakness: Smaller product line than their competitors and limited recognition of brand name
as compared to their competitors.
Opportunities: Increase of sales through e-commerce techniques, establishing more outlets in
several other countries for increasing the market share.
Threats: Expansion of competitors in the women yoga apparel.

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Primary components of Lululemon Athletica, Inc. value chain
The primary elements of the value chain of Lululemon Athletica, Inc. include a well-
structured supply chain management due to the association of the company with 45 other
manufacturers. The company also has a strong distribution channel which helps for the sales
growth in North America. The company also focuses on online retailing. This helps to boost
the sales and gain market share. The operation activities of the company are stronger, the use
of social media platforms for communicating with their customers. The company also uses
other marketing techniques via television and magazines for spreading advertisements.
Lululemon Athletica, Inc. also arranges for yoga classes to their customers (Turker, 2018).
Key strategy elements of Lululemon Athletica, Inc.
The key strategic elements of Lululemon Athletica, Inc. aims to form a strong base in
North America for expanding their market share in the US. This would increase the brand and
product awareness of the company in the US. The company also makes use of latest
technology for formulating new products and fabrics for their customers. The inventory level
is systematically maintained therefore the company does not require giving rebates on their
clothing. Lululemon Athletica, Inc. uses their maintains short duration of contracts with other
manufacturers and suppliers for providing them with the products.
The competitive strategies used by Lululemon Athletica, Inc.
Lululemon Athletica, Inc. implements differentiation strategy in their operations. The
company focuses on launching limited products in the narrow market. The company also uses
a differentiation strategy for expanding their product line and operations in the future
(Sánchez González, 2019).

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Recommendation and conclusion
As a measure of recommendation, the company must follow some advices as
mentioned in the following section. Firstly, their smaller product line is limiting the brand
recognition that is a negative factor for generating company revenue. Hence, they should
strengthen their product line by launching variety of products according to the proper
customer segmentation. Secondly, they should promote their brand name using various
mediums including social media platforms and the search engine platforms.
As a conclusion, it can be said that the company Lululemon Athletica, Inc. has shifted
the nature of the business. It requires positive promotional measures for enhancing the
business growth and development. Like several other companies, this company is also
observed with various strengths and weaknesses. These weaknesses can be overcome by
following the measures as mentioned in the recommendation section.

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References
Baalbaki, S., Gilliard, D. J., & Hoffman, D. L. (2019). Is Lululemon Athletica’s Turnabournd
Sustainable?. American Journal of Management, 19(2).
Baymout, M. (2014). Global Supply Chain Disruptions And Mitigation Strategies.
International Journal of Advance Research, IJOAR. org, 2(5).
KORS, M. (2018). STRATEGIC PLANNING PROJECT.
Lululemon.com.hk. (2020). lululemon Hong Kong | Yoga Clothes and Activewear | The
Official Site. Retrieved 20 March 2020, from
https://www.lululemon.com.hk/en-hk/home?cid=ps_google_in_en_IN-EN-G-B-Pure-
BMM_Pure-Brand-U-BMM_Ad:%20RSA_%2Blululemon
%20%2Bathletica&gclid=CjwKCAjwsMzzBRACEiwAx4lLG_88NZFPkVdtDkxXW
DIKFe-FrmmClA1gQLfFaJ5fIXg7NIdQyRHekRoC4jYQAvD_BwE
Sánchez González, M. (2019). Lululemon Athletica Inc. Investment Research.
Turker, D. (2018). Socially Responsible Production and Operations Management. In
Managing Social Responsibility (pp. 73-98). Springer, Cham.
Tybout, A. M. (2017). Lululemon athletica. Kellogg School of Management.