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Strategic Management of Lululemon Athletica Inc - Desklib

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William Blue College of Hospitality and Management

   

Strategic Management (MGT302A)

   

Added on  2020-03-02

Strategic Management of Lululemon Athletica Inc - Desklib

   

William Blue College of Hospitality and Management

   

Strategic Management (MGT302A)

   Added on 2020-03-02

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Running Head: STRATEGIC MANAGEMENT 1Strategic Management: Lululemon Athletica Inc.
Strategic Management of Lululemon Athletica Inc - Desklib_1
STRATEGIC MANAGEMENT2Answer 1:Lululemon Athletica Inc. is a leading player in athletic apparel industry. Currently, the organization has been started to serve a premium yoga niche for female segment. New competitors are capturing a significant market share and having capacity to create an impact on others. The competitive environment of the organization is analyzed using the Porter’s five forces model, which shows that rivalry in this industry is starting to increase (Financial Post, 2017). The competitive environment of Lululemon is analyzed below;Industry Rivalry For Lululemon, the competition is rife with different challenges. The sales of this segment are increasing and revenues can be generated by the organizations with powerful capabilities. In the industry, there are so many competitors, like; Nike, Adidas, VF Corp. and Under Armour. These are the major competitors, which operate business in the area of yoga apparel. Market is beginning to strengthen and to impact the results and outcomes of the organization (Barney, 2014). Threat of New Entrants Threat of new entrants is very high for Lululemon organization. It is the major reason behind the threats to continuous efforts of company. There are so many organizations, which have already introduced their yoga clothing line. In this industry, the entry barriers are low, so many of the organizations are taking its advantages and entering, like; Eddie Bauer, GAP etc. these players enter with the extra capacity that decreases the profits of Lululemon (Cole, 2013). Threat of Substitutes Threat of substitutes is low for the organization. Yoga devotees are wishing to get the features offered by the organizations, which can understand their needs and demands and provide then in better form. There are no other alternatives to satisfy their needs and expectations.
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STRATEGIC MANAGEMENT3Bargaining power of buyers Buyers maintain a medium to high level of bargaining power in this industry. They have a number of same products, which are available from different brands on different prices. The brand equity of Lululemon offers some safeguarding against bargaining power of buyers (Eden & Ackermann, 2013). Bargaining power of suppliers Bargaining power of suppliers does not work as a strong competitive force. Lululemon utilizes afocused sourcing strategy that depends on five major suppliers in Asia. It poses some political and environmental risks for the organization. These risks can be decreased if it increases the costs in North America because of supply disruption. Yes, the organization has a source of competitive advantage. Supply chain system and distribution channels are the major source for gaining competitive advantage against its competitors. The company is reaching to customers through three distribution channels, like; direct to customers, corporate owned retail stores and franchise, wholesaler and some other channels (Financial Post, 2017). These distribution channels are assisting the organization in generative significant revenues. The below-plotted graph shows the increase in revenues of company among different distribution channels.
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