Product Innovation for Sustainable Development: A Case Study of Lululemon

This report discusses the importance of product innovation for sustainable development in the textile industry through a case study of Lululemon. It covers the company's SWOT analysis, PESTLE analysis, competitor analysis, and marketing strategy. It also provides insights on budget allocation for product development and market promotion.

Product Innovation

EXECUTIVE SUMMARY
Product innovation in today's world is very crucial for the growth and development
activities of an organisation and it helps to provide satisfactory products and services to the
customers as per the requirements. More customers are moving towards sustainable products for
adopting healthier and balanced fashion in their life. The changing trends in the textile industry
are affecting the taste and preferences of customers towards their wearables. Most of the apparel
brands are responding to this rising Trend towards sustainability and has forced the organisations
globally to launch certain products and services that can combine sustainability, good health and
fashion in a better manner. The rising awareness of customers about the importance of
sustainability and environment is emerging the needs for innovation in the textile industry.
Lululemon, is a very huge athletic apparels brand from Canada that has covered the
North American markets in an oligopoly that provides it higher revenues. The company has
witnessed the rapid and intensifying growth in the Asian and European markets that has
developed an opportunity for Lululemon to expand its businesses in Asia and Europe. The
organisation tends to achieve its growth through development of sustainable products that can
fulfil the customer requirements and integrate sustainable development in its objectives. This
project will focus on the expansion of the products of organisations for integrating sustainability
in its business. It will include creation of a marketing plan, industry analysis, market analysis,
marketing plan and budget for the organisation. The project will be focused towards secondary
and primary research data, information and current market analysis.

Table of Contents
INTRODUCTION...........................................................................................................................1
COMPANY OVERVIEW...............................................................................................................1
Industrial Issues and Key Areas of Product Development.....................................................1
SWOT Analysis of the Organisation......................................................................................3
SECONDARY RESEARCH...........................................................................................................4
PESTLE Analysis...................................................................................................................4
MARKET OVERVIEW..................................................................................................................6
Competitor Analysis...............................................................................................................6
MARKETING STRATEGY............................................................................................................7
Marketing Mix........................................................................................................................7
BUDGET.........................................................................................................................................8
Costs and Allocation of Funds...............................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES/BIBLIOGRAPHY...............................................................................................11
APPENDICES...............................................................................................................................12
Appendix 1...........................................................................................................................12
Appendix 2...........................................................................................................................12
Appendix 3...........................................................................................................................13

INTRODUCTION
Product innovation refers to the creation of new ideas, methods, procedures for creating a
product that is more compatible to fulfil the customer requirements and market demand.
Sustainable development is a growing concept for the organisations throughout the world and
most of the organisations tend to produce products that are sustainable and environment friendly.
Product innovation is important to fulfil the requirements of customers and stay competitive in
the market by producing products that can fulfil market demand. Lululemon Athletica is a
Canada based organisation and was established in the year 1998 that is involved in the textile
industry and innovate its product and services to become sustainable and adapt to changing
trends. The report will be describing the organisation and its strategy for developing and
innovating products that can be helpful to fulfil the customer requirements.
COMPANY OVERVIEW
Industrial Issues and Key Areas of Product Development
Lululemon is a technical athletic apparel company for women and men that was
established in the year 1998 and is headquartered in Canada. Lululemon is an organisation that is
involved in producing apparels such as shorts, tops, jackets, pants and so forth for sports, casual
and daily use purposes.
Figure 1: Lululemon Products
1

The company's mission is to produce products that can create transformation experiences
for people to live healthy, ecstatic and happily. The core value of organisation is to provide top
quality items, operating with integrity, integrating the leading trends, nursing entrepreneurial
spirit, and providing balanced and fun life.
The vision of the organisation is to create core values to elevate the world from
mediocrity to greatness. The company is looking forward to shift its focus on developing
sustainable and environment friendly products that can full fill the requirements of the changing
trends among the people.
SWOT Analysis of the Organisation
SWOT analysis of the organisation is as follows:
Figure 2: SWOT Analysis
Strengths Weaknesses
 High brand image and brand values.
 Higher brand image provides greater
 Lower brand image due to the lack of
sustainability practices.
2

satisfaction to customers and they feel
distinguished, goal driven and healthy.
 High quality products and services to
the customers.
 Greater level of innovations and
technical growth of the products.
 Vertical retail distribution strategy
makes it easier for the customers to
obtain company's products.
 Differential marketing strategies
 Many competitors in the market
Opportunities Threats
 The growing trend towards sustainable
products among customers.
 The trend of sustainability and
obtaining environment friendly
products in the markets across the
world.
 Support of the authorities towards
sustainable growth.
 Higher quality products and reduction
in wastage.
 Competitors with similar kinds of
products with cheaper rates.
 Environment of huge costs in product
innovation.
 Counterfeit products.
SECONDARY RESEARCH
PESTLE Analysis
PESTLE analysis is a framework that is designed to identify and examine the political,
economic, social, environmental, legal and technological factors that affects the organisation in a
given place. In order to identify and examine the current changes in the environment the
organisation must utilise PESTLE analysis which is as follows:
3

Figure 3: PESTLE Analysis
Political
The markets across the globe are highly affected by the political factors and it includes
the policies of government, general rules and regulations, guidelines, etc. that must be followed
by the companies to survive in a given market. The political influences mainly caused by the
COP26 initiative have created an immense need for the organisations like Lululemon to make a
shift towards sustainable practices in the organisation and development of sustainable products.
Economic
The changing economic conditions and continuous inflammation across the world due to
the hectic environmental conditions has made it difficult for the organisations to produce
products at cheaper rates. With the help of sustainable product innovation the organisation can
use or reuse materials from the scrap and recycle the old products to create less costs on
production.
Social
The changing trends among the people to adopt sustainable and environment friendly
products has greatly affected the requirement for innovating products by the organisation. By
considering the sustainable and environment friendly needs of the society, innovating the
products in a sustainable manner has become important.
Technology
4

rapidly involving technology has provided the growth opportunities for the organisation to
produce products that are more sustainable and eco-friendly. The technological advancement has
boosted the product innovation of textile organisations with the aim of textiles 2030 for
supporting sustainability.
Legal
The changing legal policies regarding the investment, environmental regulations and
laws, etc. has affected the activities of organisations. In order to avoid legal constraints
Lululemon should adopt sustainable practices and environmentally friendly product innovation
within the organisation.
Environmental
The increasing awareness among the people about environmental health, changing climatic
conditions, 2°celsius, greener planet, etc. has intensified the need for sustainable development. It
has helped to provide sustainable development opportunities for the organisation and innovate
products that can fulfil the requirements of the customers.
MARKET OVERVIEW
Competitor Analysis
Porter's five forces is a framework that analyses the industry conditions and its market
conditions and its competition in a given scenario. It examines the five competitive forces that
help to determine the competitive strength and weaknesses of an organisation in a given market.
Porter's five forces for Lululemon are given below:
5

Figure 4: Porter's Five Forces
 Competitive rivalry (Medium): There are some competitors of the organisation in the
textile industry but the organisation does not have high competition from them and it will
get ahead of competition with its innovative approach.
 New entrants (Low): There is a lower chance for new entrances to cover such a huge
market area like Lululemon because of AIDS highly differentiated products to the
customers.
 Power of suppliers (Medium): The bargaining power of suppliers is moderate because
the organisation has good relations with their suppliers.
 Power of customers (Low): The products offered by Lululemon are highly differentiated
and have a fixed price that does not offer bargaining.
 Threat of substitute (High): There are many competitors in the market who offer the
same kind of products at cheaper rates.
6

MARKETING STRATEGY
Marketing Mix
Marketing mix consisting of 4Ps of marketing is an effective framework that supports the
growth of products in a market.
Figure 5: 4Ps of Marketing Mix
 Product: Lululemon has unique products with precise design and logo that offers high
quality and better fit to the customers. With the help of similar product definition the
organisation can innovate its sustainable product design with the name of organisation.
 Price: Lululemon can have cheaper rates for its sustainable products because with the
help of recycled products the making of new products can become cheaper and it will
help to gain a higher number of customers and greater profits.
 Place: The organisation places its products on all sports outlets and sports shops as well
as general-wear stores to cover maximum area in the market and take its products to the
customers.
 Promotion: Lululemon uses effective promotion techniques from above the line and
below the line promotion for getting better opportunities to create awareness.
7

BUDGET
Costs and Allocation of Funds
Figure 6: Product and Price
8

Figure 7: Cost and Allocation of Funds
CONCLUSION
It has been concluded from the above report that product innovation is important to fulfil the
requirements of customers and stay competitive in the market by producing products that can
9

fulfil market demand. It has been discussed that organisations involved in the textile industry and
innovate its product and services to become sustainable and adapt to changing trends. Moreover
it has been describing the organisation and its strategy for developing and innovating products
that can be helpful to fulfil the customer requirements. It has discussed of various industrial
issues, product innovation, organisational SWOT and PESTLE Analysis to identify the
requirements and need for innovation. Further, it has been providing competitor analysis and
marketing mix for improving product development and fulfils customer requirements. Finally it
has discussed budget allocation for product development and its market development thorough
promotion activities.
10

REFERENCES/BIBLIOGRAPHY
Books and Journals
Ben Arfi, W. and Hikkerova, L., 2021. Corporate entrepreneurship, product innovation, and
knowledge conversion: the role of digital platforms. Small Business Economics, 56(3).
pp.1191-1204.
Markovic, S., and et. al., 2020. Priorities when selecting business partners for service innovation:
The contingency role of product innovation. Industrial Marketing Management, 88.
pp.378-388.
Marvel, M.R. and et. al., 2020. Escaping the knowledge corridor: How founder human capital
and founder coachability impacts product innovation in new ventures. Journal of
Business Venturing, 35(6). p.106060.
Ogbeibu, S., and et. al., 2020. Technological turbulence and greening of team creativity, product
innovation, and human resource management: Implications for sustainability. Journal of
Cleaner Production, 244. p.118703.
Qiu, L., and et. al., 2020. Green product innovation, green dynamic capability, and competitive
advantage: Evidence from Chinese manufacturing enterprises. Corporate Social
Responsibility and Environmental Management, 27(1). pp.146-165.
Ramadani, V., and et. al., 2019. Product innovation and firm performance in transition
economies: A multi-stage estimation approach. Technological Forecasting and Social
Change, 140. pp.271-280.
Schweitzer, F. and et. al., 2019. There's more than one perspective to take into account for
successful customer integration into radical new product innovation: A framework and
research agenda. IEEE Transactions on Engineering Management, 67(3). pp.813-829.
Zhang, M., and et. al., 2021. Mining product innovation ideas from online reviews. Information
Processing & Management, 58(1). p.102389.
11

APPENDICES
Appendix 1
Figure 8: Market Customer Demand
Appendix 2
Figure 9: Sporting Brands and Apparels
12

Appendix 3
Figure 10: Online Business Activities of The organisation
13