Strategic Business Management: Lululemon Case Study Analysis Report

This case study analyzes Lululemon's strategic business management, focusing on its market segmentation strategy and customer base. It examines the impact of product and marketing missteps, such as the "Who is John Galt" tote bag and the sheer yoga pants, on the company's brand reputation and customer relations. The importance of supply chain management in quality control is discussed, highlighting how inferior quality control can lead to product damage and erode customer trust. The study proposes steps to prevent similar mistakes, emphasizing the need for structural, functional, and ethical appropriateness in all products and strict employee guidelines. Furthermore, the impact of a toxic workplace culture, stemming from misconduct by the former CEO, on the company's image and employee morale is explored. In conclusion, the report identifies and analyzes the various marketing and product missteps that affected Lululemon's business-level strategies, and proposes corrective measures to prevent their recurrence.

STRATEGIC
BUSINESS
MANAGEMENT
Name of Student:
Name of University:
Author’s Note:

INTRODUCTION:
 Lululemon is a premium sportswear brand founded by
snowboarder and surfer Chip Wilson.
 The company quickly captured markets in North
America and became the fourth biggest fashion and
luxury brand in 17 years.
 Despite successful business and marketing strategies and
focus on quality, the company made a number of
missteps in their marketing and product departments.

IMPACT OF PRODUCT AND MARKETING MISSTEPS
 The phrase “Who is John Galt” on a new tote bags got the
company into trouble
 The phrase was by author Ayn Rand, known for his outlook of
unregulated capitalism
 Product received negative feedback. against the company’s
goodwill
 Bad impression among its customers- both existing and
prospective

 Customers complained about black
yoga pants which were too sheer. Could
be seen through
 design flaw affected the company’s
central business strategy of ‘getting the
product right’
 Misconduct by the store’s employees.
Asked customer to bend over in the
pants to prove whether they were see-
through (Thomas and Peters 2015)
 Major blow in customer service and
marketing. Discouraging customers
from availing company’s services

IMPORTANCE OF SUPPLY CHAIN MANAGEMENT IN
QUALITY CONTROL
 Quality control is a vital part of a company’s production
department, directly affecting sales.
 The management of supply chain impacts the quality of the
product and the overall profitability of the company
 If the supply chain quality control is inferior, the likelihood of
products to or wear out or get damaged increases before the expiry
of warranty (Chen, Zhang and Delaurentis 2014)

STEPS TO PREVENT FURTHER SIMILAR MISTAKES
 Ensure structural, functional and ethical appropriateness of
all products before entering the supply chain
 No design elements like phrases or symbols should hurt the
sentiments and beliefs of customer
 Strict employee guidelines should be incorporated into the
company’s policy.
 Impose heavy penalty against employee misconduct

IMPACT OF TOXIC CULTURE ON BUSINESS
 A company’s leadership influences
its business, culture and reputation
(Eades, 2019)
 Illicit workplace relationship and
misconduct by former CEO Laurent
Potdevin left a black mark on the
image of the company
Attracting negative publicity, affecting the share prices, leaving
the company in a toxic environment, which affected work-
culture and shared trust between the employees

CONCLUSION
 In this report the different marketing and product
missteps that Lululemon were identified and analysed to
understand how they affected its business-level
strategies. Some corrective measures were also discussed
to ensure the company did not repeat those missteps.

REFERENCE LIST
 Chen, C., Zhang, J. and Delaurentis, T., 2014. Quality control in
food supply chain management: An analytical model and case
study of the adulterated milk incident in China. International
Journal of Production Economics, 152, pp.188-199.
 Eades, J. (2019). Research on Hundreds of Companies Showed
Toxic Cultures Have These Characteristics. [online] Inc.com.
Available at: https://www.inc.com/john-eades/research-on-
hundreds-of-companies-showed-that-toxic-cultures-have-these-
characteristics.html [Accessed 15 Aug. 2019].
 Thomas, J.B. and Peters, C., 2015. Lululemon Athletica and a
Series of Bad Marketing Decisions. Journal of Critical
Incidents, 8, pp.102-05.

THANK
YOU