Lulu Lemon is a designer and retailer of athletic apparel focused on yoga. It has 254 stores worldwide and was founded in 1998 in Vancouver. The document analyzes Lulu Lemon's strategy through examining its external environment using PESTEL and Porter's Five Forces analyses, and internal environment through assessing its resources, capabilities, competencies, and financial performance. It identifies key success factors and front burner issues for the company. The summary provides a high-level overview of the company, the strategic analysis tools used, and the areas assessed in the internal/external analyses.
East Carolina University MBA program presentation. Strategic Recommendations for Lululemon moving forward, Expansion Strategy, Image Management, Financials, Quality Control, Marketing, Positioning, Value Chain Analysis and SWOT.
East Carolina University MBA program presentation. Strategic Recommendations for Lululemon moving forward, Expansion Strategy, Image Management, Financials, Quality Control, Marketing, Positioning, Value Chain Analysis and SWOT.
Database Marketing Initiative for Lululemon AthleticaRahul Borthakur
A database marketing initiative for Lululemon Athletica that could be implemented to increase customer retention and profitability.
Project included in-depth study of Situation and Target Market Analysis for Lululemon Athletica. Development of Objectives and Strategy of the Retention Program, Tactical and Database Requirements, Lifetime Value (LTV) Estimates, Capital Requirements and Measurement process.
The students of North Carolina State University- Global Textile Brand Management and Marketing course developed a marketing strategy using the information learned in the semester long course. Lululemon was the chosen company.
2014 YMA Scholarship Case Study Project. Aspects of the project: developed a competitive analysis of Lululemon, created a 6-month marketing plan for a new campaign of choice, developed a merchandise assortment plan pertaining to the new campaign, completed a price analysis, and a 6-month open-to-buy plan.
Gamesia Tate
Capella University
October 15, 2016
REI Marketing Environment Worksheet
List the current characteristics of each environmental factor as they relate to REI.
U.S. Economy
How does the current U.S. economy affect REI retail operations?
1. The economy affects the purchasing power of the people. There has been poor economic conditions. Because of this, people have been unable to cater for recreational activities in their budget. On their part, the situation has affected REI retail such that there has been a reduction in the purchases.
2. Another economy element to consider is the loss of revenue. Without sufficient revenue, the company loses its ability to sustain its operations. Because of this, loss of revenue forces REI retail to cut down on its expenses to support its operations.
Global Economy
How does the current global economy affect REI retail operations?
1. In the aspect of global economy, exchange rates are crucial. The current exchange rates affect the costs and prices of the products. REI retail would therefore faces a fluctuation in their prices depending on the exchange rates.
2. A decrease in the global economy affects the costs and subsequently the revenue of REI retail. To enumerate, an increase in global economy results in an increase in revenue and in production.
Legal and Regulatory Environment
What types of legal and regulatory forces affect REI in the U.S.?
1. There exists laws and regulations in relation to advertising and marketing. Knowledge of such laws is crucial for REI retails. The retail company needs to understand the specific guidelines that pertain to their industries to be able to align their activities to the rules.
2. Training and the workplace environment of employees is crucial. REI retails needs to promote an environment that lies in accordance to Work place safety and health laws. Without that, the company might face adverse legal retaliation that might affect their business activities.
Socio-Cultural Forces
What types of social and culture trends affect REI?
1. The use of social media has become a predominant activity in the world today. In the same manner, REI retail should gain an understanding of the use of social media for their business activities. Such a criterion can be achieved through marketing their products online. Further, an online community can be created where customers interact and share about the company’s product.
2. Different behaviors exist for every cultural group. REI retail should understand the cultural orientation of their customers. Such an understanding assists in aligning the company’s product to suit the preferences and taste of each market segment.
Technological Forces
What type of technology changes affect REI?
1. Technological development has been rampant. REI retail needs to upgrade its activities to the latest technologies in the market. Without that, the company can face the threat of displacement in the highly competitive market.
2. Te ...
Database Marketing Initiative for Lululemon AthleticaRahul Borthakur
A database marketing initiative for Lululemon Athletica that could be implemented to increase customer retention and profitability.
Project included in-depth study of Situation and Target Market Analysis for Lululemon Athletica. Development of Objectives and Strategy of the Retention Program, Tactical and Database Requirements, Lifetime Value (LTV) Estimates, Capital Requirements and Measurement process.
The students of North Carolina State University- Global Textile Brand Management and Marketing course developed a marketing strategy using the information learned in the semester long course. Lululemon was the chosen company.
2014 YMA Scholarship Case Study Project. Aspects of the project: developed a competitive analysis of Lululemon, created a 6-month marketing plan for a new campaign of choice, developed a merchandise assortment plan pertaining to the new campaign, completed a price analysis, and a 6-month open-to-buy plan.
Gamesia Tate
Capella University
October 15, 2016
REI Marketing Environment Worksheet
List the current characteristics of each environmental factor as they relate to REI.
U.S. Economy
How does the current U.S. economy affect REI retail operations?
1. The economy affects the purchasing power of the people. There has been poor economic conditions. Because of this, people have been unable to cater for recreational activities in their budget. On their part, the situation has affected REI retail such that there has been a reduction in the purchases.
2. Another economy element to consider is the loss of revenue. Without sufficient revenue, the company loses its ability to sustain its operations. Because of this, loss of revenue forces REI retail to cut down on its expenses to support its operations.
Global Economy
How does the current global economy affect REI retail operations?
1. In the aspect of global economy, exchange rates are crucial. The current exchange rates affect the costs and prices of the products. REI retail would therefore faces a fluctuation in their prices depending on the exchange rates.
2. A decrease in the global economy affects the costs and subsequently the revenue of REI retail. To enumerate, an increase in global economy results in an increase in revenue and in production.
Legal and Regulatory Environment
What types of legal and regulatory forces affect REI in the U.S.?
1. There exists laws and regulations in relation to advertising and marketing. Knowledge of such laws is crucial for REI retails. The retail company needs to understand the specific guidelines that pertain to their industries to be able to align their activities to the rules.
2. Training and the workplace environment of employees is crucial. REI retails needs to promote an environment that lies in accordance to Work place safety and health laws. Without that, the company might face adverse legal retaliation that might affect their business activities.
Socio-Cultural Forces
What types of social and culture trends affect REI?
1. The use of social media has become a predominant activity in the world today. In the same manner, REI retail should gain an understanding of the use of social media for their business activities. Such a criterion can be achieved through marketing their products online. Further, an online community can be created where customers interact and share about the company’s product.
2. Different behaviors exist for every cultural group. REI retail should understand the cultural orientation of their customers. Such an understanding assists in aligning the company’s product to suit the preferences and taste of each market segment.
Technological Forces
What type of technology changes affect REI?
1. Technological development has been rampant. REI retail needs to upgrade its activities to the latest technologies in the market. Without that, the company can face the threat of displacement in the highly competitive market.
2. Te ...
Running Head: MARKETING 1
MARKETING 14
Principles of Marketing
Institutional Affiliation
Student Name
Introduction
Kevin Plank, a former Fork Union Military Academy football player, established Under Armour in 1995 upon noticing that the cotton shirts of his football team at the University of Maryland were always soaked in sweat and noted better items for his team (Kraft, P., & Lee, J. W. 2009). He wanted to create shirts that were always cool even in the hottest of weather conditions. Plank went ahead and designed his prototype for his team, which attracted much attention from other collegiate teams. This prompted the expansion and growth of Under Amour products hence resulted in the opening up of its headquarters at Maryland-Baltimore. Nonetheless, despite its success, Under Amour continues facing stiff competition from similar sports retail brands. As a relatively new organization, Under Amour faces a high threat from competitors, yet it still has the opportunity to incorporate creative and innovative ideas (Kraft & Lee, 2009).
Five Environmental Forces
Environmental factors form part of a component of the PESTLE analysis tool, which gathers information regarding the firm’s circumstances. The environmental factors constitute usually impact various essential aspects of the business (Lam et al., 2019). A detailed description of how environmental factors affect Under Amour is outlined below.
Social factors
Under Amour is influenced by any alternations, whether positive or negative, in social factors in various circumstances. The management should examine the people's lifestyle in a given locality to determine whether they exercise regularly or not. This would determine if the company is viable to widen or restrict market share in the region.
Economic Factors
A business organization such as Under Amour is affected when significant trends in the economy might alleviate or hinder the organization attaining the set goals and objectives. The management must examine consumer behavior, interest rate adjustments, banking behavior, inflation, as well as overall economic indicators. When the economic factors are positive, the business growth would be significant as well.
Technological
Under Amour’s management should consider the changes brought about by the technology. It is because technology is changing the way of doing things in any organizational setting. Organizations that fail to embrace technology offer services and goods that are less competitive in the market hence low market share.
Competitive
Business growth and success are dependent on how organizations are capable of competing in the market. Under Amour’s management must ensure substantial financial resources are budgeted to ensure that the organization conducts aggressive marketing campaigns for brand awareness and recognition to the potential market.
Regulatory
The laws and regulations are enacted by the federal and state government to regulate the way bu.
Running Head MARKETING1MARKETING14P.docxjeanettehully
Running Head: MARKETING 1
MARKETING 14
Principles of Marketing
Institutional Affiliation
Student Name
Introduction
Kevin Plank, a former Fork Union Military Academy football player, established Under Armour in 1995 upon noticing that the cotton shirts of his football team at the University of Maryland were always soaked in sweat and noted better items for his team (Kraft, P., & Lee, J. W. 2009). He wanted to create shirts that were always cool even in the hottest of weather conditions. Plank went ahead and designed his prototype for his team, which attracted much attention from other collegiate teams. This prompted the expansion and growth of Under Amour products hence resulted in the opening up of its headquarters at Maryland-Baltimore. Nonetheless, despite its success, Under Amour continues facing stiff competition from similar sports retail brands. As a relatively new organization, Under Amour faces a high threat from competitors, yet it still has the opportunity to incorporate creative and innovative ideas (Kraft & Lee, 2009).
Five Environmental Forces
Environmental factors form part of a component of the PESTLE analysis tool, which gathers information regarding the firm’s circumstances. The environmental factors constitute usually impact various essential aspects of the business (Lam et al., 2019). A detailed description of how environmental factors affect Under Amour is outlined below.
Social factors
Under Amour is influenced by any alternations, whether positive or negative, in social factors in various circumstances. The management should examine the people's lifestyle in a given locality to determine whether they exercise regularly or not. This would determine if the company is viable to widen or restrict market share in the region.
Economic Factors
A business organization such as Under Amour is affected when significant trends in the economy might alleviate or hinder the organization attaining the set goals and objectives. The management must examine consumer behavior, interest rate adjustments, banking behavior, inflation, as well as overall economic indicators. When the economic factors are positive, the business growth would be significant as well.
Technological
Under Amour’s management should consider the changes brought about by the technology. It is because technology is changing the way of doing things in any organizational setting. Organizations that fail to embrace technology offer services and goods that are less competitive in the market hence low market share.
Competitive
Business growth and success are dependent on how organizations are capable of competing in the market. Under Amour’s management must ensure substantial financial resources are budgeted to ensure that the organization conducts aggressive marketing campaigns for brand awareness and recognition to the potential market.
Regulatory
The laws and regulations are enacted by the federal and state government to regulate the way bu ...
Running Head: MARKETING 1
MARKETING 14
Principles of Marketing
Institutional Affiliation
Student Name
Introduction
Kevin Plank, a former Fork Union Military Academy football player, established Under Armour in 1995 upon noticing that the cotton shirts of his football team at the University of Maryland were always soaked in sweat and noted better items for his team (Kraft, P., & Lee, J. W. 2009). He wanted to create shirts that were always cool even in the hottest of weather conditions. Plank went ahead and designed his prototype for his team, which attracted much attention from other collegiate teams. This prompted the expansion and growth of Under Amour products hence resulted in the opening up of its headquarters at Maryland-Baltimore. Nonetheless, despite its success, Under Amour continues facing stiff competition from similar sports retail brands. As a relatively new organization, Under Amour faces a high threat from competitors, yet it still has the opportunity to incorporate creative and innovative ideas (Kraft & Lee, 2009).
Five Environmental Forces
Environmental factors form part of a component of the PESTLE analysis tool, which gathers information regarding the firm’s circumstances. The environmental factors constitute usually impact various essential aspects of the business (Lam et al., 2019). A detailed description of how environmental factors affect Under Amour is outlined below.
Social factors
Under Amour is influenced by any alternations, whether positive or negative, in social factors in various circumstances. The management should examine the people's lifestyle in a given locality to determine whether they exercise regularly or not. This would determine if the company is viable to widen or restrict market share in the region.
Economic Factors
A business organization such as Under Amour is affected when significant trends in the economy might alleviate or hinder the organization attaining the set goals and objectives. The management must examine consumer behavior, interest rate adjustments, banking behavior, inflation, as well as overall economic indicators. When the economic factors are positive, the business growth would be significant as well.
Technological
Under Amour’s management should consider the changes brought about by the technology. It is because technology is changing the way of doing things in any organizational setting. Organizations that fail to embrace technology offer services and goods that are less competitive in the market hence low market share.
Competitive
Business growth and success are dependent on how organizations are capable of competing in the market. Under Amour’s management must ensure substantial financial resources are budgeted to ensure that the organization conducts aggressive marketing campaigns for brand awareness and recognition to the potential market.
Regulatory
The laws and regulations are enacted by the federal and state government to regulate the way bu.
Population Health- Health and Human Services Description.docxstilliegeorgiana
Population Health- Health and Human Services
Description: The baccalaureate graduate nurse will apply leadership concepts, skills, and
decision making in providing care in a variety of settings.
Course Competencies: 3) Integrate concepts from behavioral, biological and natural sciences to
review health needs of diverse populations. 7) Conduct a windshield survey. 8) Develop a plan
to meet an identified need in the community. 10) Discuss the sociopolitical, economic, and
ethnic characteristics of a community and their influence on population health.
QSEN Competencies: 1) Patient-Centered Care 3) Evidence-Based Practice 5) Safety
BSN Essential II
Area Gold
Mastery
Silver
Proficient
Bronze
Acceptable
Acceptable
Mastery not
Demonstrated
Observations
Social service
agencies, clinics,
dentists, doctors,
urgent care,
pharmacy? How far
is the nearest
hospital?
Is there access to
healthy food
choices-grocery
store(s),
restaurant(s), and
number of fast food
restaurants?
Facilities for
seniors? Long term
care facilities?
All of the listed
observations are
clearly addressed
and discussed in
a comprehensive
and detailed
manner with 2 or
more specific
examples.
Additional
issues, not listed
are addressed.
Three or more of
the listed
observations are
not present or
discussed in
depth
Two or less of
the listed
observations are
not present or
discussed in
depth
Does not
include
observations
Provide
recommendations
for two additional
health and/or social
service resources to
address the selected
population group
Provide
recommendation
s for two
additional health
and/or social
service resources
to address the
selected
population group
Provide
recommendation
s for two
additional health
and/or social
service resources
but does not
address the
selected
population group
Provide
recommendation
s for one
additional health
and/or social
service resources
to address the
selected
population group
Does not
include
observations
APA, Grammar,
Spelling, and
Punctuation
No errors in APA,
Spelling, and
Punctuation.
One to three errors
in APA, Spelling,
and Punctuation.
Four to six errors
in APA, Spelling,
and Punctuation.
Seven or more
errors in APA,
Spelling, and
Punctuation.
References Provides two or
more references.
Provides two
references.
Provides one
references.
Provides no
references.
Running head: BUSINESS 1
BUSINESS 2
Week 3 Assigment 1
Latonya Louden
Strayer University
BUS499 Business Administration Capstone
Brian Grizzell
02/04/2020
Strategic Management and Strategic Competitiveness
Globalization
Apple Inc is one of the most successful public corporations today. It has been ranked number one on the Forbes list for the last decade. Being an American multinational tech company, Appl ...
1. A N A L Y S IS O F L U L U L E M O N ’ S
S T R A T E G Y
Prepared for: MG 4740 Al L6 Capstone Business Strategy
Prepared by: Angelos Kansiz, 121437
Date: 21/4/15
2. 2
TABLE OF CONTENTS
INTRODUCTION 3
COMPANY PROFILE 4
COMPANY DIRECTION 6
ANALYSIS OF EXTERNAL ENVIRONMENT 7
PESTEL Analysis 7
Porter’s 5 Competitive Forces 8
Drivers of Industry change 10
Key Success Factors (KSF) 10
Strategic Group Mapping 11
ANALYSIS OF INTERNAL ENVIRONMENT 13
Financial Analysis 14
Capabilities 15
Competencies 17
Company Strategy 20
SWOT Analysis 21
FRONT BURNER ISSUES 22
CONCLUSION 24
APPENDIX 1 25
REFERENCES 26
3. 3
INTRODUCTION
The goal of this paper is to assess the business strategy implemented by Lulu
Lemon Corporation in order to achieve its goals in the sport’s wear industry.
There will be a brief presentation of the organization and its mission, vision
and goals. In the next sections the main parts examined are the company’s
external and internal environment leading to a SWOT analysis. Also there is a
discussion about the front burner issues the firm has and some solutions
proposed in order to address them. In the last part there are some final
recommendations made and the concluding remarks.
4. 4
COMPANY PROFILE
Lulu lemon, also known as Lulu or lemon, is a company serving as designer
and retailer for athletic apparel for yoga. It was founded in 1998 and opened
its first store in Kitsiliano, Vancouver, by Dennis Chip Wilson in 2000.
Nowadays it operates 254 stores all over the world. The areas of operation
are Canada, USA and Australia. The headquarters are located in Vancouver,
Canada. (Reuters.com, 2015)The products offered are related to sport
activities ranging from pants and jackets to underwear and yoga mats.
The target market, when Lulu Lemon was established, were sophisticated
women doing yoga. Eventually, it expanded its product scope by providing
equipment for men as well. Before that, Dennis Wilson owned stores selling
surfing, skating and snowboarding apparel and equipment. It was only after
when he sold all of his eight stores, that he took his first yoga class and
realized that there was no appropriate clothing for this exercise, so he
designed some prototypes and gave them to yoga instructors to test them.
The encouraging comments he received, led him to open the first store in
Kitsiliano. The designing studio he opened in 1998, when he founded the
company, was serving also as yoga studio so that he could cover some of his
expenses. The main idea was to create a place for people to come and
interact with their passion, yoga. (Thompson, Strickland and Gamble, 2007)
Today the company is competing in the US stock exchange. Private equity
firms like Advent International and Highland Capital Partners own 48% and
the rest 52% remains to the owner. (Inc. et al., 2015)
In terms of structure, Lulu lemon has a board of directors, which sets
exclusive expectations for the Company's workers, officers and executives.
5. 5
The only sure thing in this rationality is the significance of sound corporate
administration. It is the obligation of the Board of Directors to serve as a
judicious guardian for shareholders and to direct the administration of the
Company's business. To meet those expectations, the Board of Directors sets
norms and rules that lead towards this way.(Investor.lululemon.com, 2015)
6. 6
COMPANY DIRECTION
A statement of purpose is an assertion of an organization's main reason,
which clarifies its explanation behind presence. It can be effortlessly stirred up
with the vision explanation, yet one must remember the greatest contrast,
which is that a statement of purpose is centered on who we are now while a
vision articulation is who we need to be''.(Armstrong and Kotler, 2000)
On Lulu Lemon website, there is a short and precise mission statement,
declaring as their goal: “ creating components for people to live longer,
healthier, fun lives.” (Lululemon.com, 2015) Meaning that their objective is to
design and provide people with appropriate clothing and equipment, in order
to exercise and enhance the activity itself. By exercising, people live longer,
healthier and have more fun. So, it can be said that the company is offering
the necessary equipment for people to do so. In order to achieve its goals,
company focuses on enhanced quality of the products. Specifically, their
unique quality can be reflected through 3 core ideas: fabric, performance and
craftsmanship. Choosing the right material, produce it in a way to advance the
performance and of course create it in the best possible way.
(Lululemon.com, 2015)
Though they are more focused on their vision and objectives: ‘‘elevating the
world from mediocrity to greatness’’. The dream is to promote a healthier
lifestyle for people and change the way of people see training and yoga in
particular. One way to mix up their pronouncement for a statement of
purpose, despite the fact that it just mirrors the organization's vision, it is
simply a rundown of thirty-one thoughts and life rationalities for sound and
positive living, which can be found on their website. (Lululemon.com, 2015)
7. 7
ANALYSIS OF EXTERNAL ENVIRONMENT
A company performs its operations inside two environments, external and
internal. As external, are defined the conditions inside the industry within the
firm competes. In order to assess them two tools can be used, the PESTEL
analysis, which stands for political, economical, sociocultural, technological
and legal factors, and Porter’s model for the five competitive forces.
PESTEL Analysis
Political: Comprehensively, the active wear clothing industry is
developing (Blair, 2013). Since some of Lulu Lemon’s products are
made in China and other emerging Asian nations, increase in the
minimum wages in these nations can probably result in higher
assembling expenses.
Economical: Relentless financial turmoil, especially within Europe can
possibly influence Lulu Lemon’s global extension possibilities
adversely. Throughout hard monetary times, buyers get to be more
value cognizant; retailers must give separated items to keep up with
value levels.
Sociocultural: The business sector for active wear has been reinforced
by the development in the public arena towards dynamic and sound
ways of life. The quantity of individuals inside North America occupied
with yoga, keeps on rising (Moran, 2013).
Technological: The development of shopping online, has empowered
apparel retailers to achieve a much more extensive business sector.
This can be ascertained from the upward route of the e-commerce
8. 8
sector regarding sportswear. In 2012 the sales were 6.2 billion dollars
and in 2013 rose to 7.8. The appropriate table can be found in the
Appendix 1. (US Census Bureau, 2015)
Environmental: The middle-aged populace introduces an open door for
sports attire organizations. The adolescent sportswear business sector
is way too much served, while more established dynamic sections of
the populace are underserved. The men's athletic clothing business
section shows a vast development chance for expansion for Lulu
Lemon.
Legal: The NAFTA makes it simpler for Canadian organizations like
Lulu Lemon to branch out crosswise over North America. Presently,
Lulu Lemon has various licenses ensuring, not to mention a variety of
other things, its products (Pacheco, 2013).
Porter’s 5 Competitive Forces
I. Competition from rivals. As competitors of Lulu Lemon
can be considered Adidas, Nike, Under Armour,
companies that operate in the sportswear industry. This
force is strong since shifting to new firm is cheaper, not
only in terms of money but also in other ways like time
and convenience. For example, if a competitor opens a
new store in a more convenient location than their rivals,
it will be easier for customers to select them.
II. Threat of new entrants. This factor is categorized as
moderate. Companies have some privileges by achieving
9. 9
economies of scale. For instance, they can outsource the
production operation in countries where salaries are low,
having as a result lower manufacturing cost. Although
incumbent firms have better access to logistics, Internet
offers a bigger market to compete since even new firms
can attract more customers.
III. Threat of substitute products: Here, the effect of this
factor in the industry is weak, since there are no good
substitute products in order to replace training clothing.
The equipment needed is standardized more or less. For
example, soccer apparel is fixed.
IV. Supplier bargaining power: The degree to which supplier
can influence the industry is limited since the materials
provided, like wool and cotton are easily accessible.
V. Buyer bargaining power: Another strong indicator of the
industry. Customers can comfortably turn to other firm’s
products, in case that Lulu Lemon’s products do not
satisfy them.
10. 10
Drivers of Industry change
Among other factors, those that expedite alternation in the sportswear
industry are the following:
Increased globalization: Today active wear companies have to compete in
an international surrounding, which means more competitors and more
diversity.
Product and Marketing innovation: Companies have to compete hard with
each other so that they will increase their market share. Nike had spent for
marketing expenses 2.4 billions, in 2011.(Booth, 2013) On the other hand
Lulu Lemon did a more innovative move by giving apparel worth up to
1,000$ free to yoga instructors in order to promote their brand.(Helliker,
2010)
Changing societal concerns, attitudes and lifestyles: As it was mentioned
above, there is a shift in people towards healthier lifestyles; something that
undeniably affects sportswear companies. As more and more people are
involved, their demands for effective and efficient products increase. So
firms have to advance their products respectively.
Key Success Factors (KSF)
Key success factors are parameters that have direct impact on the ability of
firms to compete within the industry. The strategy implemented, product
features, access to resources are some of them. (Thompson, Strickland and
Gamble, 2007)
The more crucial factors for the specific industry are:
11. 11
Product performance: Consumers demand from their active wear to be
flexible, comfortable, and of course supportive to the specific activity.
For example, from running jerseys is considered as necessary the
appropriate material to remain dry as long as possible.
Price: Remaining price competent is a strong advantage for those firms
in order to retain their market share. For companies to do so, they must
have low manufacturing costs, something that usually is achieved by
outsourcing the production operation to low wage countries, like Nike
which assigned 42% of apparel production in
China.(Manufacturingmap.nikeinc.com, 2015)
Strategic Group Mapping
In strategic groups are categorized competitors who use an equivalent
approach in the market. In this case the competitors of Lulu Lemon will be
positioned based on their price and geographic coverage along with it. As it
can be seen Lulu Lemon offers products with higher quality but higher prices
also in less areas than its competitors.
13. 13
ANALYSIS OF INTERNAL ENVIRONMENT
The elements that consist the internal environment in which companies
operate, are the different departments, their interaction and how well they are
aligned, in order to meet objectives which are defined by the strategy
implemented. In the specific company their goal is to create components for
people to live longer and healthier lives. First of all, the resources must be
assessed. There are two main categories, tangibles and intangibles.
Tangibles
Physical resources: Lulu Lemon has 3 retail centers: in Vancouver, in
Ohio and in Melbourne. Through those facilities, it has the ability to
distribute its products more efficiently. In addition, it owns 254 stores
around the world, becoming more accessible to customers.
(Reuters.com, 2015)
Technological: Lulu Lemon offers 15% discount to accredited yoga
instructors in order to participate in the Research and Development
department and provide feedback.(Lululemon.com, 2015)
Intangibles
Human capital: In January 2012 Lulu Lemon had 5807 employees
from which 4872 were working in the retail stores. Obviously their
frontline is a big asset. In order to prepare it better, aside from the
training received, employees are given motives to participate in
yoga classes so that they are able to comprehend the activity more
Figure1
14. 14
and gain a deeper understanding of the features of the apparel they
sell. (Thompson, Strickland and Gamble, 2007)
Logo & Company image: The firm has patents protecting its logo,
fabrics used and designs from being imitated from competitors. Of
course the brand name has become a synonym for yoga equipment
of high quality.
Company Culture: Employees were given collective bargaining
agreement in order to feel more committed to their work, and as a
result no strikes or work stoppages have arise. A specific mentality
is expected from all employees so that they will promote company’s
aspirations.(Thompson, Strickland and Gamble, 2007)
Financial Analysis
As any entrepreneurial venture, Lulu Lemon’s financial objectives are to
increase sales and gain market share, enhance its income and develop a
sound financial department. Its sales constantly move upwards. In 2011, the
sales were 711.7M $ and in 2014 they reached 1.8B $. Gross income also
rose from 570M $ in 2012 to 915M $ in 2014.(Marketwatch.com, 2015)
In terms of ratios, Lulu lemon is showing again remarkable standing. Its gross
profit margin ratio, which reflects the ability of earnings to cover operating
expenses and incur a profit at the same time, is 54% for the last 5 years, while
the average for industry is 48%. In addition, the net profit margin ratio is
impressive, which indicates the profit per dollar after tax. The company’s
average for the last 5 years is 17%, while for the industry is 6.6%
(Dailyfinance.com, 2015) Apart from the aforementioned ratios, liquidity ratios
15. 15
must be examined as well. The current ratio, calculated by dividing current
assets over current liabilities is 5.9%, whereas the industry’s ratio is 2.7%.
That means that the company can pay liabilities by deploying assets that can
be inverted into cash in the short term. Another ratio reflecting the growth of
Lulu Lemon is the earnings per share, the profit for every share of the stock
standing. For Lulu Lemon is 38% and for the industry the average is 4.8% for
the past 5 years. (Dailyfinance.com, 2015)
Capabilities
Capabilities are activities performed by a company mainly based on tacit
knowledge, which should result in competitive advantage. To be considered
as sustainable, an advantage must endure after rivals try to imitate it. Lulu
Lemon’s capabilities are:
Logistics: According to the inventory managing system, specific
designs are distributed to specific stores, so that they enforce
customers to buy them quickly and simultaneously limit the number of
people who will own the exact same product, something that could
make the products considered as common. (Road less Invested, 2012)
Service: The customer service provided by the firm is really
encouraging. First and foremost employees are trained in a way to
embrace the healthy lifestyle and interact better with customers.
Furthermore, some stores provide additional yoga sessions that are led
by regional instructors. Thus, customers feel more cozy in the stores.
Of course, there is an online forum with dual purpose. To inform
customers about the unique features of the products offered and at the
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same time to collect valuable feedback in order to improve their goods.
(Lululemon.com, 2015)
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Competencies
On the other hand, competencies are activities performed inside the
company with primary purpose to implement a specific strategy. There
are two divisions of competencies, core and distinctive. The first is
crucial for firms in order their strategic goals to be achieved and the
latter is when a company performs this activity more effectively and
efficiently than their rivals. Obviously firms would like to have distinctive
competencies, so that they differentiate from competitors.(Thompson,
Strickland and Gamble, 2007) To assess Lulu Lemon’s competencies,
the VRIN tool will be used. This acronym stands for how Valuable,
Rare, Inimitable and Non-substitutable a competence is.
1. Strong ties with customers. The customers selecting Lulu
Lemon products share the same passion for obtaining a
healthy lifestyle. There is a connection between them, which
is based on the mutual appreciation for an active living. As a
result, customers become loyal. It is rare for companies to
create such bonds with customers. It cannot be easily copied
due to social complexity besides the fact that it requires a lot
of time and effort.
2. Quality & Design: The products of Lulu Lemon are designed
for energetic people and customers appreciate that, since
they consider themselves as such. As far as their
uniqueness is concerned, there are specific patents which
protect its products and in case of imitation, litigation could
arise. Nonetheless the raw materials are used exclusively by
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Lulu lemon. Concerning how common or rare it is, only few
companies use client feedback in their production process.
The specific yoga products cannot be easily substituted by
other, while running apparel can be found easily in other
firms.
3. Organizational culture: This healthy mentality prevailing
among employees in Lulu lemon, combined with the vision of
firm’s top management, results in a strong commitment of
employees to their jobs since they feel valued. This can’t be
easily transferred to firms whose frontline doesn’t share the
same aspiration with the management. This culture leads to
inimitable store experience for customers who can buy
products from where they train. For them it is not just a store
but also a place where they interact. Here one should bear in
mind that employees are trained to treat customers as guest
when they enter a shop. This mentality cannot be substituted
with ease, since it requires a lot of effort.
4. Strategic alliance: In 2009, Lulu Lemon launched the Ivivva
firm, which is strictly limited to selling women dancing
apparel through its 14 stores across USA and Canada. This
competency is very valuable since it exploits its distribution
facilities, reaching economies of scale in the production
operation and meanwhile expands its product scope and
target market since Ivivva focuses only on girls from the age
of 6 to 20. However, it is not rare for such collaborations to
19. 19
exist and they can be easily imitated. For example, Nike in
2003 and 2004 acquired the Hurley International and the
Converse firm respectively. Those firms focus on different
markets since Hurley provides skateboarding apparel and
Converse is more known for its shoes.
20. 20
Company Strategy
Lulu Lemon, by the time it was firstly launched, it had targeted educated
women who wanted to bring in balance their workloads, which are family and
work responsibilities, by achieving inner peace through practicing yoga. The
strategy used is focused differentiation since they provide athletic apparel but
targeted to yoga fans. Their mission remains the same until today, “creating
components for people to live healthier lives”. In 2007, when the company
became public by trading shares in the NASDAQ and the Toronto exchange,
the strategic objectives which were set, remain almost the same by the time
being.
1. Expand the store base within North America.
2. Increase brand awareness
3. Introduce innovative product technologies
4. Enhance attractiveness of the products
5. Expand store base outside North America.
6. Make the shopping experience in one of the Lulu Lemon’s shops
unique.
The company showed remarkable commitment to its strategic objectives,
so that it would be able to implement its strategy. As the years go by, Lulu
Lemon remains focused on its goals. The store base has been expanded
both for North America and USA. Its products are enhanced since they
receive and exploit customer feedback, one of the best feedback pools. In
addition, the product scope has been updated by providing apparel for
men and by launching running clothing as well. It must be pointed out,
that the brand becomes more and more popular since yoga instructors
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promote its products. Through constant training of employees and
cultivation of their mentality, shopping in one of the company’s store has
become more special aside from the fact that some stores provide yoga
sessions.
SWOT Analysis
After conducting both internal and external analysis, a SWOT analysis can
be presented. This acronym stands for Strengths, Weaknesses,
Opportunities and Threats.
Strengths: On one hand fabrics used in manufacturing process
result in high quality products and on the other hand employees’
training leads to strong company culture which customers can
easily discern. Exploitation of a market niche has to be also
reported. Since, when it was launched there was no other yoga
apparel retailer.
Weaknesses: Limited product line, high retail prices, low brand
awareness, promoting is mainly focused on yoga studios.
Opportunities: Expansion of the product line to other sports apart
from yoga, which has slowly been incorporated. Expansion in terms
of geographic coverage is another opportunity.
Threats: There is always the threat of new entrance in the market,
in addition to the threat of competition from strong financial
corporations like Nike.
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FRONT BURNER ISSUES
The issues that Lulu Lemon should address in order to remain successful and
financially sound in the following years are the following three:
1st Issue: Narrow product line. The products of Lulu Lemon are primarily
focused on women doing yoga. Despite the fact that that focus established
Lulu Lemon’s position in the market, as the years go by they should try to
broaden their product scope. Right now there is a men’s section in their
apparel but is limited. They should provide clothing for men that will carry
equal focus like the women’s section. A more appropriate way to expand their
line would be by providing apparel for sports except yoga. It must be
mentioned that this broadening of the line should arise carefully. A fast and
careless expansion could hurt the brand name.
2nd Issue: Expand geographic coverage. For the moment, Lulu Lemon
operates in Canada, USA and Australia. Europe, Asia and South America are
the markets in which it could expand into. Such move, would establish the firm
as a true international player in the global market. In order to do so, careful
research should be made, since the products are restricted down to people
with healthy lifestyle, yoga fans and adequate buying power. So, in case it
enters a new market where people are not so fond of adopting a healthy
lifestyle or don’t prefer yoga as a way to exercise, the company wouldn’t be
that successful.
3rd Issue: Limited brand awareness. Although Lulu Lemon intentionally
promotes its products mainly through yoga instructors, there is enough room
for improvement. As its product variance gets bigger people should get aware.
Currently only yoga fans are aware of Lulu Lemon, so in order to address this
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issue, marketing department should increase promotion, while remaining loyal
to their vision for designing clothing for people to live healthier. For example,
they could put advertisements in additional gyms apart from yoga studios and
increase online promotion on healthy and green websites, in order to show
consistency with their vision and mission. Otherwise they could be easily
misinterpreted from potential customers as a typical sportswear company.
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CONCLUSION
To sum up this project, Lulu Lemon is a pioneer in the sportswear by
introducing yoga apparel. Its main strengths are the strong organizational
culture that defines all the human capital employed and the commitment to its
vision and mission. Its operations can be declared successful, since it yields
profits, maintains satisfactory liquidity and keeps operating expenses as low
as possible while it retains quality in products. However, there are some
issues that require attention in order to remain successful. The product scope
must be enriched so that more customers can be targeted and put pressure to
rivals and increase its market share. In addition expanding in new markets will
give the chance to Lulu Lemon to become a global firm, increase the brand
awareness and of course increase revenues.
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