Lululemon Case Analysis Essay

Lululemon’s strategy is not only sell the product, they also offer healthy life style and targeting very specific segment which is customers who do yoga. Their competitive advantage is they offer benefits except a good product such as physical

Lululemon Athletica, is a yoga-inspired athletic apparel company with products that create transformational experiences for people to live happy, healthy, fun lives. Lululemon has teamed up with Jennifer Anniston to promote a healthy lifestyle at the 5k at Millennium Park.

Lululemon is a rapidly growing company with a different niche for its products. Its philosophy as well as their business model has allowed them to increase revenue over the past years. The dilemma they faced is how to continue expanding without losing their special niche, grassroots and a nontraditional feel of the brand that sets them apart from their competitors.

The women's apparel market is highly competitive. With the launch of a new active-wear line from Harrington Collection's, more and more competitors will start to realise the potential value in in producing an active-wear line of their own. The active-wear market is growing so rapidly (expected to double turnover from 2007 to 2009), that eventually all of Harrington's competitors would likely be expected to launch a line of their own, relying on existing brand loyalty and high-scale advertising campaigns to capture market share and move units.

The athletic apparel industry has shown a large increase in popularity. Global sales of sport clothing have increased from 146.1 billion US dollars in 2007 to 162 billion US dollars in 2012(Global Participative Sport as Consumption). Particularly in the United States, sales of sport apparel have increased by 7% from 2013 to 2014 (Wingus). There has been a large trend in healthy living, as “activewear accounted for $33.7 billion in sales and made up 16 percent of the apparel market” (Wingus). The industry is booming, as sportswear, specifically yoga pants, has transformed into people’s daily apparel. (Refer to Appendix Table 1) Huffington post noted, “people are wearing trendy workout clothes all day, every

In this short report I will be discussing the company, Lululemon Athletica Inc. Chairman Dennis “Chip” Wilson founded Lululemon Athletica Inc. in 1998. The Vancouver, Canada-based Lululemon Athletica Inc. designs and sells yoga apparel under the Lululemon Athletica and also Ivivva Athletica brands, to the athletic consumer. Their mission statement is to create components for people to live longer, healthier, fun lives. They operate in 250 company-owned stores in North America alone in 2015; they also have other stores around the world. Lululemon has 8,628 people employed as of 2015. They primary design apparel is for women that like to run, do yoga, or dance. But the company also offers a line for men. A third-party in Taiwanese constructs the attire, which is then distributed to the different stores in Canada, North America, and all over the world.

Lululemon is one of the Canada’s best retailers of technical athletic yoga apparel. Lululemon’s yoga inspired apparel is marketed under the two brand names Lululemon Athletica for more mature women and Ivivva Athletica for younger girls. Lululemon primary target customers are educated and hard working women, who understand the importance of healthy and active lifestyle. Majority of these women are Caucasian who are mainly urban and have higher income, since Lululemon is an expensive brand .Most of their products are design to offer fit, performance and comfort while incorporating both style and function. On another hand, American Apparel

Despite previous and recent controversy going on within Lululemon the company still looks to fight for their brand image and focus on their core competencies to renew the companies image. While former CEO, Laurent Potdevin did help create the trend of athleisure the company still aims to maintain on focus on the trend (Schmidt, 2018). Due to high comfort of athleisure wear for millennials, they want to continue to strive to bring that to consumers lifestyles. Consumer’s would be able to wear Lululemon products “... in the office, while running errands, when out with friends, [and] at the gym…” (Fromm, 2016).

Lululemon Athletica’s (LULU) competitive advantage hinges on the company’s use of the four management pillars; efficiency, quality, innovation and responsiveness to clients (Tsang et al, 2013). LULU achieves unrivalled efficiency through outsourcing and technological advances. Even though LULU continues to design their merchandises in Canada, the manufacturing is outsourced from countries such as Bangladesh, China and Indonesia. The company has benefited from technological advancements by allowing customers the comfort of buying merchandises online, through the company’s website, which comprises of free shipping straight from the manufacturing plant, and thus saves on shipping costs, time, as well as retail store resources like signage and employees.

Internal forces has driven Lululemon Athletica's fundamental objective to give their customers items that will enable them to live long and sound

Athletics Supreme is a company that has been in operation for ten years with a product line that consists primarily of athletic equipment. With a reputation for consistently delivering equipment that is both safe and affordable, the company has demonstrated quality in the world of sporting equipment and team sports. Through focused research the company has identified an opportunity to grow a new revenue stream by the addition of a new product line that includes quality apparel. The future market expansion strategies will continue to focus on providing a quality

"Another course of action Lululemon is taking to handle external pressures is by overseas expansion, particularly in Europe and Asia. Lululemon will implement a polycentric attitude when developing their brand on foreign soil, meaning they will hire local experts instead of western managers from the host

At the time the company was yoga based store and a few other athletic wear products. They started to get their company name out by being a design studio by day and a yoga studio by night. From that point on Lululemon could raise the name recognition and expand its product line and understand their core base. Today, as implied earlier LuluLemon has become known as an athletic clothes connoisseur. The main target market is millennial women, but they have entered the male athletic wear market and have been trying to their sales pool. However, their marketing mix is very much a core mix, their placement of their products is at their own stores only, but advertise in many athletic related websites and athletic related paraphernalia. The company offers many promotions specifically on social media and some print ads. In regards to price they are higher priced than average athletic wear. Therefore, Lulu is trying to target more well established consumers. Finally, as stated earlier Lulu’s products are athletic wear products such as yoga pants, shorts, and shirts, but Lulu is looking at expanding their product line capabilities. All in all, Lulu is known for their quality and uniqueness to the market segment, they offered their consumers a range of products needed in today’s fitness world. Therefore, Lululemon is looking for all options to improve their market outreach to meet the needs of their clients.

Buyer Bargaining Power: This threat is very weak because lululemon sells directly to consumers, who rarely have haggling prices or other terms with sellers. Lululemon rarely sells wholesale, and when they do it is to support their grassroots marketing strategy to increase brand awareness. Although buyers could switch to a competitive brand, they would not receive the same psychological satisfaction of social status shown through clothing as they gain from buying products from lululemon. This and the fact that the brand’s reputation is important to buyers show that lululemon’s product ‘delivers quality or performance that is not matched by other brands.’ This superior quality and reputation drive the demand, creating the “lululemon cult phenomenon.” Lululemon also does a great job of combating any consumer bargaining gained through information on products by providing information on their trademarked fabric and technology, health, yoga, and upcoming lululemon activities on their website.

Over the last 10 years’ gym memberships within the United States have increased from 41.3 million to 54.1 million. The biggest trend over the last few years is becoming fit, more and more each day people are finding ways to live fit and healthier lifestyles. From eating the right nutritional foods, working out and people just wanting to follow the latest and greatest trends. The increase in gym memberships and the amount of people working out leads to the increase in athletic attire. For this exact reason athleisure wear was born, it is the newest fashion trends were people wear athletic clothing regardless if they intend not to go to the gym that day. People are wearing it to the office, shopping, to run errands and other social events. Athleisure wear consist of articles of clothing such as spandex, leggings, yoga pants, sports bras and fashionable sweats. Over the last 10 years an increase in athleisure wear has spread at a rapid rate globally, particularly in the women’s fashion industry. Since 2013 the increase in athleisure wear apparel has grown by 14% and accounts for 18% of the total clothing retail market. With this trend still catching on, active wear is expected to continue to grow at an average rate of 3.3% annually. Due to this rapid increase in purchasing athleisure wear the apparel industry will continue to grow especially Nike because they are the market leaders in active sportswear. For that exact reason I believe that Nike is a company that is worth