Exploratory Research Assignment
5/31/2014
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Introduction
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
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Finally, Lululemon’s founder, Chip Wilson, made a publicly offensive suggestion, that some women’s bodies were not made to wear his yoga pants. “The problem was that the yoga-apparel company has been having with its pants on the size of women 's thighs” (EBSCO, Nov 14, 2013). After making those comments discourage plus size customers were embarrassed and felt like they don’t want to shop at the store anymore. Some women blamed CEO for making products that don’t last long. One of the examples from Financial Post. However, despite the unfortunate occurrences last year Lululemon is in a very healthy position in the Canadian and US markets. In addition to that, Lululemon’s baggiest competitor is now Sears Canada. Sears became a new stop for consumers who want high-quality and affordable yoga gear. “The struggling department store chain says its Pure Energy Athletics line of yoga clothes has been a hit with customers since they were introduced in February. The chain says it sells yoga pants for $14.99 or $29.99 — a steal compared to similar clothing from other retailers, like Lululemon Athletica” (Edmonton Journal, May 21, 2014). However, Lululemon has a tremendous
a few percent, in 2012 the gross profit margin is the highest it has ever been
Lululemon Athletica Inc. thrived off its 5 key elements in their growth strategy which helped to acquire a stronger revenue base that enabled them to have a differentiated product line,design and culture. Trademarked fabric and technology helped their brand loyalty which enabled them to get products in and off the shelves in a 2 month period. Additionally 95% of its inventory was sold at regular price. This was attainable because of the strategic multi-channel approach used to enhance its market presence
The company plans to launch stand-alone men's stores by 2016 and expand their business globally. That same day, the company announced plans to quit the Toronto Stock Exchange (TSX) due to a lack of trading on the Canadian exchange, stating that the expenses associated with having a dual listing were not justifiable(Nichols, 2016). The one remark that sent the media in a frenzy was in response to the public criticism of the sheer yoga pants, Wilson explained, “Quite frankly, some women’s bodies just actually don’t work for it. Even our small sizes would fit an extra-large(Nichols, 2016). It’s really about the rubbing through the thighs, how much pressure is there.” This statement triggered massive social outrage that was felt throughout many media platforms(Nichols, 2016). With this media “fire-storm” it was clear that Mr. Wilson needs to be reprimanded in the sense of being taught to speak to the media. Christine Day has stepped down from the CEO position and corporate will need to select another leader.
The company has plans to open nearly 200 new stores worldwide. In preparation, lululemon athletica has hired an experienced CEO, Robert Meers, who was at the helm of Reebok for 15 years. In 2005, the company implemented a five-year vision called the Community Legacies program which is based on the belief that “every person we hire, garment we create, store we open, customer we educate, and yoga class we attend contributes to building a legacy in our communities.” 9 This goal and action plan, along with the deep-rooted commitment to ethical business practices and maintaining a health and fun-filled environment in communities it operates in, will guide lululemon athletica towards success as a global retailer.
When it comes to a social aspect, Lululemon is becoming an increasing trend: a result of consumer approval. The company does take hits though for its return policy and many people feeling that their staff is not very friendly. The media took blows on the company when there was a murder that took place at one of their stores and the conflict was between two of the employees(Lawrence). They are seen as having sustainable development and being environmentally friendly. They are also conforming to demographic changes and developing lines for men and youth. As for a technological aspect, they are praised for their several forms of social media and keeping customers up to date as well as their up keep of fashion trends(MBASkool).
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.
Unfortunately Lululemon’s pants crisis doesn’t end there. The founder, Chip Wilson, 18 months later, shared his thoughts on the pants debacle and undid all the damage control Lululemon immediately following the recall. Chip Wilson’s interview on Bloomberg News basically negated everything Lululemon did in the first stage of their crisis management. Allowing Chip to speak on behalf of the entire company was a poor choice, as he was the wrong spokesperson and clearly unprepared. He injected his own opinions about the original crisis and did not align with what Lululemon had so carefully crafted. Wilson did not have the proper crisis management or communications training to handle the situation and only continued to make it worse. In his original
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.
Lululemon was founded by Chop Wilson in Vancouver, Canada in 1998. Lululemon itself is described as a yoga inspired athletic apparel that is both for men and women. The company has apparel for yoga, training, running and fashion. It has shaped the way people dress to go workout. Society finds themselves purchasing consumer products for no reason. Lululemon is recognized for its high quality and pricy products. They buy these things that fill a void they have inside of them. But in the end they will keep wanting more. Consumers today have depended on money and how consumption brings negative outcome behind materialism. In the essay Two Cheers for Materialism by James B. Twitchell, he defines us American as materialists and how we are a nation of consumers. While Lululemon is a popular consumer choice, many aspects influence the consumption of such a product such as when Lululemon first started out, When I first came across the brand and the expatiations it has for consumers.
As women have continued to embrace a variety of fitness and athletic activities, including yoga, we believe other athletic apparel companies are not effectively addressing their unique style, fit and performance needs. We believe we have been able to help address this void in the
3. What do you see as the key success factors in the market for performance-based yoga and fitness apparel?
This report has been created with the intent to analyze the athletic apparel industry with a specific focus on Lululemon Athletica, Inc., further refered to as Lululemon. In this report you will find that the strengths and weaknesses of Lululemon’s current strategies and future goals are analyzed and compared to that of its closest competitors. In conclusion to the analysis, recommendations have been made to potentially guide Lululemon Athletica, Inc. in a positive direction in regards to its future endeavors. The following
Lululemon is a large company, making clothing for athletic activities, not only are they in the women’s athletic range, but they have hit the men’s market and youth range as well. A SWOT analysis will be used to break down Lululemons strengths, weaknesses, opportunities, and threats to the business. Strengths which Lululemon have achieved include multi-faceted and community-based approach strategy, making customers feel part of a community through marketing strategies like there “ambassador program, social media, in-store community boards and grassroots initiatives” (Lululemon, 2016 Annual Report, 2016, p. 3). Touchpoints which have been a part of this multi-channel include Lululemons websites www.lululemon.co.nz and ivivva.com which is based around female youth active ware. With Lululemon having 12,500 full-time employees worldwide (Lululemon Athletica Inc. (LULU), 2017) with 406 stores (Lululemon, 2016), their large market capital of $8.33 billion (Lululemon Athletica Inc. (LULU), 2017), shows the total value of Lululemons shares of stock. Lululemon having $581.1 million in net revenue, this is an increase of 13% while their gross profit increased by 17% rising to $297.4 million. (Lululemon Athletica Inc. Announces Second Quarter Fiscal 2017 Results, 2017). This shows a steady increase in profit for Lululemon for 2017 which is a strength for them.
The main issue the company faced is quality control issue impacting brand image. There is narrow focus in both consumer segments and product line. There is also limited brand recognition and limited geographic market such as America. The quality of yoga pants were not good because customer companied about sheer Luon Yoga Pants and the fabric is so see through.
Lululemon Inc. has a strong history of making quality fitness clothing for yoga and other athletic purposes by the founder of the company. Dennis “Chip” Wilson in 1998. After becoming “overwhelmed” by the company’s success in Vancouver, Wilson transferred management of the company to trained managers (Nicholes, 2016, p.6). During this time, Corporate CEO Christine Day’s leadership was put into question due to the low level quality of material used to make the Luon Pants, which had a “see-through problem” due to the extreme sheerness of the pant material. More so, in 2013, corporate leadership had a lawsuit brought against the company directors, including Christine Day, of massively raising the