Lululemon Case Study: Strategic Management & Competitive Advantage

This case study provides a strategic analysis of Lululemon Athletica Inc., focusing on its market segmentation strategy, which is primarily behavior-based, targeting affluent, fitness-conscious consumers. The company employs a differentiation business-level strategy, gaining a competitive edge through strategic sales methods and local partnerships. Functional-level implementation involves a scarcity strategy and seasonal product offerings. The analysis also addresses past marketing missteps, such as the “Who is John Galt” tote bag incident and the recall of see-through yoga pants, and suggests improvements in supply chain management and marketing techniques. Furthermore, the document touches upon the toxic culture incident involving the CEO's departure and its potential impact on the company's internal culture and business strategy. Desklib offers a wealth of similar solved assignments and past papers for students seeking academic support.

Strategic Management of
Lululemon
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Market segmentation strategy of Lululemon
The market segmentation
strategy of Lululemon
Athletica Inc is behaviour
segmentation as it makes
use of the lifestyle of the
people along with their
activities for defining the
market segment
The company takes into
account the psychological
aspects in relation to
consumer buying
behavior

Customers of Lululemon
The typical customers
of Lululemon are the
affluent people who
want high quality
along with stylishly
designed clothing
The people who are
very concerned about
their fitness make up
the customers of
Lululemon

Business Level strategy
The generic
business level
strategy that is
pursued by
Lululemon is
Differentiation.
The company
differentiates itself
from the competitors
by implementing
various methods
along with strategies

Competitive edge
The strategic sales
methods of Lululemon
pairs with that the local
entrepreneurs who have
passion for serving their
community.
 It gives the company an
advantage over that of
the rivals because it
helps the company in
developing lost lasting
relationship with that of
the athletic teams.

Implementation at functional level
For the proper
implementation of
business level strategy,
the company should
implement the scarcity
strategy and the company
should keep a limited
supply of the various
products
The company can keep
seasonal items that can
help in keeping product
offering fresh

Deeds of the company
The company has
done these things by
adopting the scarcity
strategy and they
condition the
customers to buy the
products when they
see it

Marketing missteps
The marketing missteps will
have a great impact on the
company as what happened in
the year 2010 when the tote
bags of the company was
emblazoned with a phrase “Who
is John Galt” and it meant the
support that the company has
for unregulated capitalism. It
did not go well with the
customers of the stores.
The company had to recall black
yoga pants that was “ see
through” and which was causing
discomfort for the consumers of
the products of the company

Changes that can be implemented by
Lululemon
Supply chain
management has a
direct impact on the
quality of the products
and the profitability that
is made by a company
It can help a company in
maintaining competitive
edge within market
place and it can help in
reduction of operating
costs
Lululemon should take care
of the fact that the marketing
techniques that are being
employed by the company are
thoroughly reviewed so as not
to stop the potential
customers from buying the
products of Lululemon
The company can take care of
the fact that the products that
are made have taken utmost
care of the issue of comfort
that is of crucial importance
for the consumers

Toxic culture in company
The toxic incident that
has been recently
faced by Lululemon
Athletica Inc is that of
the CEO Potdevin
leaving the company in
an abrupt manner
because he was having
a relationship with a
subordinate who was a
female designer of
company

Impact on company
It will have an effect
on the business level
strategy of the
company as it can
prove to be
instrumental in
destroying the
internal culture that
the company has

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