Strategic Management Case Study: Lululemon Analysis

This case study examines Lululemon's strategic management, focusing on market segmentation, business-level strategies, and functional-level implementation. It explores Lululemon's target market, primarily health and fitness-conscious individuals, and analyzes the company's use of focus differentiation to gain a competitive advantage. The analysis includes an examination of the generic business-level strategy, the role of marketing and supply chain management, and the impact of internal issues, such as a toxic company culture, on strategic execution. The study highlights the importance of quality control, supply chain management, and effective leadership in maintaining a successful business strategy. The case study emphasizes the need for companies to adapt to changing customer demands, maintain a strong brand image, and address internal issues that may affect the company's performance. It also mentions the importance of the Ambassador program, which promotes health and fitness within communities. The document also covers the importance of supply chain management in quality control, and the impact of a toxic company culture on business strategy. Finally, the case study also mentions the negative impacts of the company's product missteps on its ability to execute its business-level strategy.

Strategic
management

Introduction
 The topic introduces the concepts of strategic management considering the
business organisation named Lululemon within the apparel and clothing industry
 The strategic management involves continuous planning, analysis and
monitoring of business actions for fulfilling the needs, goals and objectives of the
organization effectively.
 The business organisation was facing quality control issues, because of which,
focus differentiation and market segmentation will be essential for managing
products and services accessible to the customers with ease and effectiveness.
 The topic will also illustrate about the ways of implementing business level
strategies along with approaches to gain competitive advantage in business with
the management of a proper and effective culture at Lululemon.

Lululemon’s market segmentation strategy
 The targeted clients of Lululemon are basically those who are aware of health and fitness
and are more inclined towards sports activities, fitness goals and aimed at living a healthy
life.
 The four different kinds of market segmentation approaches are demographic
segmentation, behavioural segmentation, psychographic segmentation and geographic
segmentation.
 A suitable market segment has been identified as the target market to break down the
market into segments and fulfil the needs and preferences of the homogenous group of
people with similar kinds of needs, characteristics and preferences.
 To segment the market, the company targeted the health and fitness cautious clients and
even made new range of clothing items available after every 3 o 12 weeks for attracting
more clients (Hill, Jones and Schilling 2014).
 To manage the market segmentation strategy, the company also sold products at full prices,
mentioning it may soon be out of stock
 The scarcity strategy has worked fine for the company to sell the clothing products at
premium prices, which also resulted in forming a huge customer base and higher revenue
generation (Hill, Jones and Schilling 2015).

Generic business-level strategy
 Lululemon’s business level strategies are aimed at gaining competitive advantage
by focusing on the delivery of yoga and sports inspired clothes that are stylish as
well as comfortable made with the best technical fabrics.
 The company manages refund or return of clothing items only when the clothes are
not worn or still have the price tags attached to it.
 The Ambassador program has also helped in promoting local leaders who have
reflected the culture of the place along with promotion of health and fitness of the
communities.
 The program has also induced the behaviours of clients and made them share their
passion and dedication towards athletics, health and fitness of the communities.
 The store manager of the company stores has also been associated with the use of
funds for the creation of partnerships with community leaders during a global yoga
event (Hill 2017).
 This has also created positive mind sets among the people and influenced their
buying behaviours for higher sales revenue and profit generation too.

Things to be done at the function level
 The focus differentiation strategy is the main focus of the organisation that
combines the three business strategies at the functional level.
 This has been an effective strategy for targeting the smaller groups of clients
with differentiated products and services offered to them (Drnevich and Croson
2013)
 The focus differentiation has helped in targeting smaller groups and fulfilled
their needs and preferences and establish a sense of trust and loyalty among
the customers
 The focus differentiation strategy enabled serving the clients more than its
competitors in business by becoming a leader in delivering products to a niche
market (Eden and Ackermann 2013).
 The focus differentiation enabled meeting the needs of narrow market segments
and adapt to changing demands and expectations of customer regarding the
products along with differentiation of those to be unique from its competitors.

Impact of marketing on execution
of business-level strategy
 Based on the case study, there was unregulated capitalism
 The software generated data provide false statements regarding
security of products and negative feedbacks were provided by
clients
 The black yoga pants were too much sheer that enabled see
through feature, because of which, there was also lack of rear
end coverage.
 The clients also complained about poor customers’ services
provided by the employees and even they were mistreated who
demanded them for a refund (Hitt and Duane Ireland 2017).

Importance of supply chain
management in quality control
 With the proper management of stocks and supply chain activities, the
manufacturing and production processes improved, leading to extra
refined materials used for the development of products along with
lowering down of manufacturing costs and production costs.
 In case the quality of supply chain is poor, the products are likely to
get destroyed or broken before the estimated warranty period.
 The quality control is important part of the supply chain management,
which can also reduce the chances of risks associated with the rate of
return and hazardous failures related to the products (Wheelen et al.
2017).
 The quality control in supply chain enables audit of supplier
relationships along with inspecting the materials and finished goods
inventory required to manage the value added activities properly.

Toxic culture making an impact on
business level strategy
 CEO Potdevin left the company with inappropriate relationship
with the subordinate of the company
 The leadership skills lacked and inappropriate actions were
undertaken, which further affected the culture of the organisation.
 The focus differentiation was though useful and effective still it
lacked proper focus on quality, which made many customers
unsatisfied with the kinds of products delivered (Meyer, Neck and
Meeks 2017).
 The false sense of security and inappropriate behaviour by the
employees to serve the clients further affected the culture
negatively and resulted in a toxic culture which create negative
impact on the business level strategy too.

Bibliography

 Drnevich, P.L. and Croson, D.C., 2013. Information technology and business-level strategy: Toward
an integrated theoretical perspective. Mis Quarterly, 37(2).
 Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management. Sage.
 Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
 Hill, C.W., Jones, G.R. and Schilling, M.A., 2015. Strategic management theory. Cengage Learning,.
 Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
 Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
 Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship‐strategic management
interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
 Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management and
business policy. pearson.

Thank You