Lululemon is a designer and retailer of athletic apparel that has expanded to over 200 stores internationally. It has experienced strong revenue and profit growth in recent years. The document provides an overview of Lululemon's current state, strategy, mission, vision, objectives, corporate governance, external environment, customers, competitors, resources, and strategic alternatives. Financial analysis and projections are also included.
Lululemon is a yoga-inspired athletic apparel company known for technical fabrics like Luon and Luxtreme. It was founded by Chip Wilson and focuses on creating clothing to support an active lifestyle. Lululemon has over 200 stores internationally and is popular among celebrities, with key fabrics designed to wick away sweat and prevent odor during workouts.
Internal Analysis and Strategy Report - LululemonKailey Cornett
The document is an internal case analysis report for lululemon athletica inc. prepared by Kailey Schaneberg for CEO Laurent Potdevin. It provides background on lululemon's success and challenges, including a product recall and leadership transitions that hurt growth. An analysis of lululemon's strengths, weaknesses, opportunities, and threats is presented. The memo recommends that lululemon create an exclusive multi-site fitness membership program, acquire the company that manufactures its Luon fabric to improve quality control and lower costs, expand its men's product line to include traditional sports apparel, and expand its brand ambassador program to professional athletes. Further details supporting these recommendations are attached.
This document summarizes information about lululemon athletica, a designer and retailer of high-end yoga inspired athletic wear. It discusses that lululemon was founded in 1998 in Vancouver, British Columbia by Chip Wilson as a yoga studio and has since expanded to locations across North America and Australia. The typical lululemon customer is described as a wealthy, educated, fit, healthy, active woman who is interested in yoga. Competitive forces, SWOT analysis, value chain, and other strategic aspects of lululemon's business are also summarized.
This document provides a market research project report on Lululemon Athletica Inc. conducted by a group of 4 members. It includes an executive summary on Lululemon's brand and issues it has faced since 2013 related to quality, CEO comments, and stock drops. The report analyzes Lululemon's brand, history, customer profile, sales review using a SWOT analysis. It then defines the problems of declining quality and high prices based on social media comments collected from Twitter, Facebook, Reddit, YouTube and Social Mention. The report focuses its research on improving Lululemon's brand image and quality.
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.
Lululemon is a company that sells athletic apparel focused on yoga. It was founded in 1998 in Vancouver after the founder realized the growing popularity of yoga. Lululemon has expanded its product line beyond yoga wear to include other athletic clothing and accessories. The company focuses on high quality, technical fabrics and flattering fits. Lululemon's target market is women ages 25-35 who are educated professionals interested in health and wellness. The company relies on grassroots marketing through yoga instructors rather than traditional advertising.
Lululemon is an athletic apparel company known for its yoga pants and workout gear. It targets educated, health-conscious women. The document discusses Lululemon's core competencies, competitive advantages, sustainability initiatives, and industry analysis. It finds that Lululemon has higher profit margins and revenue growth than competitors due to strong branding, innovative fabrics, and an emphasis on meeting customer needs.
Lululemon is a yoga-inspired athletic apparel company known for technical fabrics like Luon and Luxtreme. It was founded by Chip Wilson and focuses on creating clothing to support an active lifestyle. Lululemon has over 200 stores internationally and is popular among celebrities, with key fabrics designed to wick away sweat and prevent odor during workouts.
Internal Analysis and Strategy Report - LululemonKailey Cornett
The document is an internal case analysis report for lululemon athletica inc. prepared by Kailey Schaneberg for CEO Laurent Potdevin. It provides background on lululemon's success and challenges, including a product recall and leadership transitions that hurt growth. An analysis of lululemon's strengths, weaknesses, opportunities, and threats is presented. The memo recommends that lululemon create an exclusive multi-site fitness membership program, acquire the company that manufactures its Luon fabric to improve quality control and lower costs, expand its men's product line to include traditional sports apparel, and expand its brand ambassador program to professional athletes. Further details supporting these recommendations are attached.
This document summarizes information about lululemon athletica, a designer and retailer of high-end yoga inspired athletic wear. It discusses that lululemon was founded in 1998 in Vancouver, British Columbia by Chip Wilson as a yoga studio and has since expanded to locations across North America and Australia. The typical lululemon customer is described as a wealthy, educated, fit, healthy, active woman who is interested in yoga. Competitive forces, SWOT analysis, value chain, and other strategic aspects of lululemon's business are also summarized.
This document provides a market research project report on Lululemon Athletica Inc. conducted by a group of 4 members. It includes an executive summary on Lululemon's brand and issues it has faced since 2013 related to quality, CEO comments, and stock drops. The report analyzes Lululemon's brand, history, customer profile, sales review using a SWOT analysis. It then defines the problems of declining quality and high prices based on social media comments collected from Twitter, Facebook, Reddit, YouTube and Social Mention. The report focuses its research on improving Lululemon's brand image and quality.
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.
Lululemon is a company that sells athletic apparel focused on yoga. It was founded in 1998 in Vancouver after the founder realized the growing popularity of yoga. Lululemon has expanded its product line beyond yoga wear to include other athletic clothing and accessories. The company focuses on high quality, technical fabrics and flattering fits. Lululemon's target market is women ages 25-35 who are educated professionals interested in health and wellness. The company relies on grassroots marketing through yoga instructors rather than traditional advertising.
Lululemon is an athletic apparel company known for its yoga pants and workout gear. It targets educated, health-conscious women. The document discusses Lululemon's core competencies, competitive advantages, sustainability initiatives, and industry analysis. It finds that Lululemon has higher profit margins and revenue growth than competitors due to strong branding, innovative fabrics, and an emphasis on meeting customer needs.
Lululemon is a leading athletic apparel company known for its strong brand image. It has potential for expansion through new product lines like menswear and ivivva, as well as geographic growth. However, it faces key risks such as competition infringing on its strategies and instability in executive management. A discounted cash flow valuation estimates Lululemon's fair value at $66 per share, its current market price.
Lululemon is a retailer known for high quality yoga and athletic wear. Founded in 1998, Lululemon aims to inspire healthy living through clothing and community programs. The company has experienced strong financial growth, with revenue increasing to over $450 million in 2010. Lululemon focuses on sustainability and social responsibility through environmentally-friendly practices, community donations, and public health programs. As the athletic clothing market grows, Lululemon competes through a tailored education of its products and online support tools to help customers meet their fitness goals.
The document summarizes market research on Lululemon consumers in Chicago following negative publicity about the brand. Key findings include:
1. Current Lululemon customers still prefer the brand and were not strongly impacted by the bad publicity, though many were unaware of the issues.
2. Potential customers see Lululemon as overpriced, preppy, and prissy. Lowering prices and changing perceptions may attract new customers.
3. Most spending comes from current customers' infrequent purchases rather than high spending. New customers are needed for growth.
Lululemon is a yoga apparel company that has experienced rapid growth but also growing pains as it has expanded. It needs to reevaluate its vision and strategies. The document proposes updating Lululemon's vision to becoming the number one women's athletic apparel brand. It also recommends key strategic initiatives around sales growth, operational improvement, cost containment and product innovation. Key result and performance indicators are proposed to measure progress in these areas and ensure overall alignment with the mission.
Lululemon is a athletic apparel company founded in 1998 in Vancouver, Canada that designs yoga and athletic clothing. It now has over 350 stores worldwide and employs over 2,800 people. Lululemon targets active women and men ages 18-45 who are interested in maintaining a healthy lifestyle through yoga, running, and other sports. Recent news and prospects indicate Lululemon will continue its success by focusing on positive relationships with employees, customers, and community.
This marketing plan summary outlines Lululemon's situation, target markets, and marketing strategies. Lululemon aims to remedy its damaged brand image through PR initiatives and by validating its pricing and quality. Its target markets are affluent men and women ages 18+ who engage in active lifestyles. The plan proposes expanding product lines to include maternity, plus sizes, and youth apparel. Marketing strategies include sponsoring events, loyalty programs, store expansion, and growing e-commerce. Implementation will occur over 5 years through new product launches, advertising, partnerships, and performance measurement.
Lululemon is an athletic apparel company targeting yoga practitioners and runners aged 18-55 earning $40,000+. To continue growing from $1B to $1.3B in sales, Lululemon will invest $1M in digital marketing from January to April. This includes optimizing their website and email program, online/mobile ads, and expanding social media presence on platforms like Facebook, Twitter, YouTube and blogs to engage customers and drive traffic. Success will be measured by an increased ROI and customer engagement, as well as higher website traffic.
Lululemon is a brand known for high-quality yoga apparel. It differentiates itself by focusing on women and cultivating a sense of community in its stores. The brand has expanded beyond yoga to include other athletic apparel but could better segment its brand architecture. Lululemon uses high-performance fabrics and emphasizes function, style, and customer service. It positions itself as a luxury activewear brand and communicates its brand through elements like its logo and reusable shopping bags promoting wellness messages. The brand relies more on interactive marketing like in-store classes than traditional advertising.
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.
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.
The document analyzes the lululemon brand and its position in the sports fashion world. It discusses lululemon's marketing mix, target market, SWOT analysis, and strategic issues. Key points are that lululemon needs to revisit its value proposition, expand its product line to include plus sizes, sneakers, and international markets. It should also focus on product placement, create a loyalty program, and pursue celebrity endorsements.
Lululemon is a brand known for high-quality yoga and athletic apparel. It differentiates itself from competitors by focusing on women as consumers and emphasizing community and wellness in its stores and marketing. Lululemon uses innovative fabrics and designs its products to be both stylish and high-performing. The brand communicates through minimal traditional advertising and focuses on interactive marketing like in-store classes and events. Word-of-mouth from ambassadors and customers is an important part of Lululemon's marketing strategy. The brand has been very successful financially and in building a loyal customer base around its focus on health, fitness and lifestyle.
Nike is a major brand in the footwear and apparel industry known for its "Just Do It" slogan and Swoosh logo. It designs, develops, and markets footwear, apparel and equipment worldwide. While providing fashion and comfort, it competes on cost with competitors in the industry. Opportunities for Nike include intervening with new technology, appealing to the general population beyond athletes, and addressing environmental concerns over materials that impact rising costs.
The document summarizes a strategic plan for athletic apparel brand Lululemon. It outlines the company's strengths in quality, innovation, brand recognition and community focus. It then discusses strategic imperatives to expand into related categories like outerwear and accessories, leverage the brand across the customer lifecycle, and expand into niche markets through partnerships. The plan aims to achieve 30% annual growth over 10 years through these initiatives and maintaining a customer-centric approach.
The document provides an analysis of The North Face brand. It describes the company's history, founding in 1966 and operations focused on technical outerwear. The North Face sponsors major athletic events and saw profits rise in 2010. While successful overall, areas for improvement include product technology communications and increasing customer loyalty. The analysis covers the brand's internal environment, external factors, target customers, identity, and a proposed brand plan.
Lululemon is valued at $75 per share based on a discounted cash flow analysis. This represents a nearly 4% premium over the current market price. Key drivers of Lululemon's value include strong growth in the athleisure market, its unique in-store experience and focus on fashion and quality, and historical financial performance. While competitors encroach on its niche, Lululemon has opportunities through expanding in Asia and growing its e-commerce segment. The valuation assumes continued revenue growth of around 10% annually through 2022.
Lululemon targets two main audiences - a primary audience of active lifestyle enthusiasts aged 25-40 who seek high quality, fashionable fitness clothing, and a secondary audience aged 18-45 who want comfortable casual clothing. Lululemon focuses on word-of-mouth marketing and engages customers on social media by promoting an active lifestyle rather than products. It tailors social media content to different audiences like yoga, running and general fitness while maintaining over 1 million followers on most platforms.
This document discusses the internal environment of a boutique chain called Elegant Outfits located in Saudi Arabia. It identifies five key internal factors: customers, shareholders, competitors, employees, and financial institutions. It also examines how these internal factors affect the management processes of planning, organizing, staffing, communicating, and leading. Finally, it concludes that effective management requires rational assessment, goal-setting, resource allocation, and adaptation to changes in the internal and external environment.
This document contains a conceptual study of business management and organizational systems conducted by Partha Pratim Gautam for their MBA/PGPM program. It includes a student declaration, certificate by the guide Prof. Ravi Shankar, acknowledgements, table of contents, and executive summary. The study was conducted on Apollo Munich Health Insurance Company Ltd under the guidance of Prof. Ravi Shankar at Excel Business Academy in Bangalore.
Lululemon is a leading athletic apparel company known for its strong brand image. It has potential for expansion through new product lines like menswear and ivivva, as well as geographic growth. However, it faces key risks such as competition infringing on its strategies and instability in executive management. A discounted cash flow valuation estimates Lululemon's fair value at $66 per share, its current market price.
Lululemon is a retailer known for high quality yoga and athletic wear. Founded in 1998, Lululemon aims to inspire healthy living through clothing and community programs. The company has experienced strong financial growth, with revenue increasing to over $450 million in 2010. Lululemon focuses on sustainability and social responsibility through environmentally-friendly practices, community donations, and public health programs. As the athletic clothing market grows, Lululemon competes through a tailored education of its products and online support tools to help customers meet their fitness goals.
The document summarizes market research on Lululemon consumers in Chicago following negative publicity about the brand. Key findings include:
1. Current Lululemon customers still prefer the brand and were not strongly impacted by the bad publicity, though many were unaware of the issues.
2. Potential customers see Lululemon as overpriced, preppy, and prissy. Lowering prices and changing perceptions may attract new customers.
3. Most spending comes from current customers' infrequent purchases rather than high spending. New customers are needed for growth.
Lululemon is a yoga apparel company that has experienced rapid growth but also growing pains as it has expanded. It needs to reevaluate its vision and strategies. The document proposes updating Lululemon's vision to becoming the number one women's athletic apparel brand. It also recommends key strategic initiatives around sales growth, operational improvement, cost containment and product innovation. Key result and performance indicators are proposed to measure progress in these areas and ensure overall alignment with the mission.
Lululemon is a athletic apparel company founded in 1998 in Vancouver, Canada that designs yoga and athletic clothing. It now has over 350 stores worldwide and employs over 2,800 people. Lululemon targets active women and men ages 18-45 who are interested in maintaining a healthy lifestyle through yoga, running, and other sports. Recent news and prospects indicate Lululemon will continue its success by focusing on positive relationships with employees, customers, and community.
This marketing plan summary outlines Lululemon's situation, target markets, and marketing strategies. Lululemon aims to remedy its damaged brand image through PR initiatives and by validating its pricing and quality. Its target markets are affluent men and women ages 18+ who engage in active lifestyles. The plan proposes expanding product lines to include maternity, plus sizes, and youth apparel. Marketing strategies include sponsoring events, loyalty programs, store expansion, and growing e-commerce. Implementation will occur over 5 years through new product launches, advertising, partnerships, and performance measurement.
Lululemon is an athletic apparel company targeting yoga practitioners and runners aged 18-55 earning $40,000+. To continue growing from $1B to $1.3B in sales, Lululemon will invest $1M in digital marketing from January to April. This includes optimizing their website and email program, online/mobile ads, and expanding social media presence on platforms like Facebook, Twitter, YouTube and blogs to engage customers and drive traffic. Success will be measured by an increased ROI and customer engagement, as well as higher website traffic.
Lululemon is a brand known for high-quality yoga apparel. It differentiates itself by focusing on women and cultivating a sense of community in its stores. The brand has expanded beyond yoga to include other athletic apparel but could better segment its brand architecture. Lululemon uses high-performance fabrics and emphasizes function, style, and customer service. It positions itself as a luxury activewear brand and communicates its brand through elements like its logo and reusable shopping bags promoting wellness messages. The brand relies more on interactive marketing like in-store classes than traditional advertising.
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.
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.
The document analyzes the lululemon brand and its position in the sports fashion world. It discusses lululemon's marketing mix, target market, SWOT analysis, and strategic issues. Key points are that lululemon needs to revisit its value proposition, expand its product line to include plus sizes, sneakers, and international markets. It should also focus on product placement, create a loyalty program, and pursue celebrity endorsements.
Lululemon is a brand known for high-quality yoga and athletic apparel. It differentiates itself from competitors by focusing on women as consumers and emphasizing community and wellness in its stores and marketing. Lululemon uses innovative fabrics and designs its products to be both stylish and high-performing. The brand communicates through minimal traditional advertising and focuses on interactive marketing like in-store classes and events. Word-of-mouth from ambassadors and customers is an important part of Lululemon's marketing strategy. The brand has been very successful financially and in building a loyal customer base around its focus on health, fitness and lifestyle.
Nike is a major brand in the footwear and apparel industry known for its "Just Do It" slogan and Swoosh logo. It designs, develops, and markets footwear, apparel and equipment worldwide. While providing fashion and comfort, it competes on cost with competitors in the industry. Opportunities for Nike include intervening with new technology, appealing to the general population beyond athletes, and addressing environmental concerns over materials that impact rising costs.
The document summarizes a strategic plan for athletic apparel brand Lululemon. It outlines the company's strengths in quality, innovation, brand recognition and community focus. It then discusses strategic imperatives to expand into related categories like outerwear and accessories, leverage the brand across the customer lifecycle, and expand into niche markets through partnerships. The plan aims to achieve 30% annual growth over 10 years through these initiatives and maintaining a customer-centric approach.
The document provides an analysis of The North Face brand. It describes the company's history, founding in 1966 and operations focused on technical outerwear. The North Face sponsors major athletic events and saw profits rise in 2010. While successful overall, areas for improvement include product technology communications and increasing customer loyalty. The analysis covers the brand's internal environment, external factors, target customers, identity, and a proposed brand plan.
Lululemon is valued at $75 per share based on a discounted cash flow analysis. This represents a nearly 4% premium over the current market price. Key drivers of Lululemon's value include strong growth in the athleisure market, its unique in-store experience and focus on fashion and quality, and historical financial performance. While competitors encroach on its niche, Lululemon has opportunities through expanding in Asia and growing its e-commerce segment. The valuation assumes continued revenue growth of around 10% annually through 2022.
Lululemon targets two main audiences - a primary audience of active lifestyle enthusiasts aged 25-40 who seek high quality, fashionable fitness clothing, and a secondary audience aged 18-45 who want comfortable casual clothing. Lululemon focuses on word-of-mouth marketing and engages customers on social media by promoting an active lifestyle rather than products. It tailors social media content to different audiences like yoga, running and general fitness while maintaining over 1 million followers on most platforms.
This document discusses the internal environment of a boutique chain called Elegant Outfits located in Saudi Arabia. It identifies five key internal factors: customers, shareholders, competitors, employees, and financial institutions. It also examines how these internal factors affect the management processes of planning, organizing, staffing, communicating, and leading. Finally, it concludes that effective management requires rational assessment, goal-setting, resource allocation, and adaptation to changes in the internal and external environment.
This document contains a conceptual study of business management and organizational systems conducted by Partha Pratim Gautam for their MBA/PGPM program. It includes a student declaration, certificate by the guide Prof. Ravi Shankar, acknowledgements, table of contents, and executive summary. The study was conducted on Apollo Munich Health Insurance Company Ltd under the guidance of Prof. Ravi Shankar at Excel Business Academy in Bangalore.
This strategic marketing plan outlines Students-On-The-Go's goals to expand into Japan and increase profits to $4.8 million within a year. It will improve marketing strategies through campaigns, a website, and other media. It will also lower costs and offer scholarships to differentiate itself from competitors. By hiring local representatives and focusing on customers' needs, it aims to make a personal connection. If successful, this plan could result in over $5 million in profits, but estimates may differ due to changing factors.
welfare activity at mahindra and mahindra ltd, nashikSaket Rathi
The document discusses employee welfare activities at Mahindra and Mahindra Ltd. in Nashik, India. It outlines the objectives of studying welfare activities to understand satisfaction levels and additional requirements. It then describes the various vehicles manufactured at the Nashik plant, including the Mahindra Thar, Xylo, Quanto, Bolero, and Scorpio.
Hilal Foods is a family-owned Pakistani confectionery company with over 50 products including candies, cakes, chocolates, and powdered drinks. It is headed by Muhammad Ali Munshi and also run by his son and two grandsons. The company values teamwork, quality, innovation, integrity and people development. Hilal Foods exports its products to several countries and aims to become a global food leader through diversified halal products. It faces challenges in marketing such as improving return on investment and keeping up with trends.
Christine Callahan is applying for the position of Public Relations Manager at Lululemon Athletica. She summarizes her qualifications which include a degree in Psychology and Integrated Marketing Communications from Northwestern University and experience working at a Lululemon store. She then analyzes Lululemon's Twitter presence and provides recommendations to better incorporate the company's emphasis on community, including spotlighting ambassadors, studios, and employees to strengthen connections between the brand and its lifestyle.
Maliban Biscuit Manufactories Ltd. is one of Sri Lanka's largest biscuit manufacturers. The company was founded in 1954 and now has over 150 distributors and 260 sales representatives. [1] Maliban's strategic purpose is to become the market leader in all biscuit categories by improving distribution to over 95% of the country and introducing innovative products. [2] Their vision is to be the most successful and respected biscuit company in Sri Lanka. [3] A SWOT analysis identified political, economic, social, technological, environmental, and legal factors that impact Maliban, such as consumer attitudes, labor costs, environmental regulations, and intellectual property laws.
Business Policy and Strategic Management.pptxATIFASLAM90
The document discusses various aspects of business policy including:
1. Business policies are guidelines developed by organizations to govern their actions and define decision-making boundaries. They help achieve organizational goals.
2. Business policies cover functional areas like production, marketing, finance, and personnel. They define roles and responsibilities of senior management.
3. Effective business policies are specific, clear, reliable, appropriate, simple, inclusive and flexible to guide organizational activities. They provide long-term direction for organizations.
The document provides marketing recommendations for The Joint Sugar House chiropractic clinic. It discusses 10 credos of Marketing 3.0, which focus on balancing customer satisfaction, social responsibility, and profitability. Some of the credos include loving customers, respecting competitors, being sensitive to change, offering a good product at a fair price, and keeping and growing customers. The document also provides recommendations for improving the clinic's website and digital marketing strategy, as well as retaining existing customers and attracting new clients through in-person marketing efforts.
This document discusses corporate social responsibility and sustainability. It defines CSR as a form of business self-regulation that aims to contribute to societal goals through volunteering and ethical practices. Sustainability emphasizes long-term business value through practices that benefit people, the planet, and the economy. It discusses the environmental, social, and economic pillars of sustainability. The document also provides an example of issues around labor practices at Apple suppliers and criticisms of Walmart's CSR practices regarding use of child labor and gender discrimination.
The document provides an overview of business and its environment. It discusses [1] the nature of business, goals of business, and trends in modern business. It then covers [2] the importance of corporate governance, social responsibility, and business ethics. Finally, it analyzes [3] the different factors in a business environment and how businesses must analyze and respond to changes in their external environment.
The document provides an overview of business and its environment. It discusses [1] the nature of business, goals of business, and trends in modern business. It then covers [2] the importance of corporate governance, social responsibility, and business ethics. Finally, it analyzes [3] the different factors in a business environment and how businesses must understand and respond to their environment to be successful.
The document provides an overview of business and its environment. It discusses [1] the nature of business, goals of business, and trends in modern business. It then covers [2] the importance of corporate governance, social responsibility, and business ethics. Finally, it analyzes [3] the different factors in a business environment and how businesses must analyze and respond to changes in their external environment.
Understand how the new regulatory laws and guidelines going into affect in 2012 will have an impact on pharmaceutical companies and the relationship between Medical Science Liaisons and KOLs.
This document provides an overview of a corporate finance project conducted on Hindustan Unilever Limited (HUL) by a group of students. It acknowledges the guidance provided by their professor. The executive summary outlines the various sections covered in the project, including an analysis of HUL's corporate governance structure, risk and return profile, capital structure, rewards to shareholders, and recent developments. The document is divided into further sections that provide details on these topics and conclusions from the research.
This speech discusses the importance of business excellence and strategy implementation in organizations. It notes that the current business environment is vague, uncertain, complex and ambiguous, requiring companies to have strong strategies and business excellence frameworks. The speech outlines several key factors for organizational success, including visionary leadership, customer focus, robust strategies, and good governance. It emphasizes that effective strategy implementation relies on adopting business excellence models across the entire organization. Business excellence frameworks can help companies assess performance, identify gaps, and drive continuous improvement. The speech encourages aligning employee attitudes, efforts, and objectives with organizational goals in order to achieve excellence.
This document presents the strategic plan for Burgers and Pizza, a franchise that focuses on healthy foods. The plan outlines the company's vision, mission, and objectives. It aims to differentiate products through health and target schools/colleges near institutions. The plan uses a balanced scorecard to track progress in key areas like customers, finance, processes, and growth. Strategies include expanding to new locations, developing family-friendly products, adopting new technologies, and ensuring legal and ethical compliance to realize long term sustainability through cost leadership and differentiation. Controls like financial targets, customer surveys, and adherence to standards will evaluate strategy success.
The document discusses creating predictable business growth through three key areas: leadership, strategic planning, and sales optimization. It provides advice on building trust within executive teams, conducting strategic planning, and implementing sales best practices. The key takeaways are that success requires the right people in leadership, a clear strategic plan, and executing that plan through an integrated sales and marketing engine.
This document summarizes a presentation on strategic business planning given by Prof. Dr. Colin Thompson. The presentation covers defining goals to produce an effective strategic plan, including distinctive capabilities, market focus, identity, people, and profit goals. It also describes the logical flow from goals to action programs. Finally, it discusses that the strategic planning process itself, from building a leadership team to implementing change, helps create an organization committed to its strategic goals.
Taurus Zodiac Sign: Unveiling the Traits, Dates, and Horoscope Insights of th...my Pandit
Dive into the steadfast world of the Taurus Zodiac Sign. Discover the grounded, stable, and logical nature of Taurus individuals, and explore their key personality traits, important dates, and horoscope insights. Learn how the determination and patience of the Taurus sign make them the rock-steady achievers and anchors of the zodiac.
Unveiling the Dynamic Personalities, Key Dates, and Horoscope Insights: Gemin...my Pandit
Explore the fascinating world of the Gemini Zodiac Sign. Discover the unique personality traits, key dates, and horoscope insights of Gemini individuals. Learn how their sociable, communicative nature and boundless curiosity make them the dynamic explorers of the zodiac. Dive into the duality of the Gemini sign and understand their intellectual and adventurous spirit.
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.🤯
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Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
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Building Your Employer Brand with Social MediaLuanWise
Presented at The Global HR Summit, 6th June 2024
In this keynote, Luan Wise will provide invaluable insights to elevate your employer brand on social media platforms including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok. You'll learn how compelling content can authentically showcase your company culture, values, and employee experiences to support your talent acquisition and retention objectives. Additionally, you'll understand the power of employee advocacy to amplify reach and engagement – helping to position your organization as an employer of choice in today's competitive talent landscape.
Top mailing list providers in the USA.pptxJeremyPeirce1
Discover the top mailing list providers in the USA, offering targeted lists, segmentation, and analytics to optimize your marketing campaigns and drive engagement.
How MJ Global Leads the Packaging Industry.pdfMJ Global
MJ Global's success in staying ahead of the curve in the packaging industry is a testament to its dedication to innovation, sustainability, and customer-centricity. By embracing technological advancements, leading in eco-friendly solutions, collaborating with industry leaders, and adapting to evolving consumer preferences, MJ Global continues to set new standards in the packaging sector.
Zodiac Signs and Food Preferences_ What Your Sign Says About Your Tastemy Pandit
Know what your zodiac sign says about your taste in food! Explore how the 12 zodiac signs influence your culinary preferences with insights from MyPandit. Dive into astrology and flavors!
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Recruiting in the Digital Age: A Social Media MasterclassLuanWise
In this masterclass, presented at the Global HR Summit on 5th June 2024, Luan Wise explored the essential features of social media platforms that support talent acquisition, including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok.
Recruiting in the Digital Age: A Social Media Masterclass
Lululemon Strategy Report
1. Lululemon Strategy Report Page 1
LULULEMON STRATEGY REPORT
Prepared by:Aziz Ghani
Aziz Ghani : azizghani0@gmail.com 1416-856-6737
Business Strategy,
2. Lululemon Strategy Report Page 2
Contents
Introduction………………………………………………………………………………………3
Current State of Affairs………………………………………………………………………..…3
Mission……………………………………………………………………………………………3
Vision…………………………………………………………………………………………..…4
Objective……………………………………………………………………………………….…4
Current Strategy………………………………………………………………………………..…4
Corporate Governance……………………………………………………………………………5
External Environment: PESTLE…………….……………………………………………………5
Porter’s Five Forces………………………………………………………………………………7
Customers……………………………………………………………………………………...…8
Competitors………………………………………………………………………………………9
Corporate Structure………………………………………………………………………………9
Corporate Culture……………………………………………………………………………...…9
Corporate Resources…………………………………………………………………………..…10
Marketing……………………………………………………………………………...…10
Financial resources…………………………………………………………………….…10
Research and Development………………………………………………………………10
Operations and Logistics…………………………………………………………………11
Human resources…………………………………………………………………………11
Information Technology…………………………………………………………………11
Strategic Alternatives……………………………………………………………………………11
Analysis of Strategic Alternatives………………………………………………………………12
Strategic Recommendation…………………………………………………………………...…14
Implementation……………………………………………………………………………….…16
Evaluation and Control……………………………………………………………………….…16
Financial Ratios & Analysis……………………………………………………………………..17
Internal & External Analysis…………………………………………………………………….18
Pro Forma Statement…………………………………………………………………………….19
Bibliography…………………………………………………………………………………..…21
3. Lululemon Strategy Report Page 3
Introduction
Lululemon was founded in 1998 and opened its first retail store in Vancouver in 2000. The
company - designer and retailerof athletic apparel has expanded to become a public trading entity
on major stock exchanges. It currently operates over 200 retail stores on two continents. The
ideology behind Lululemon’s founding was to promote healthy living by means of yoga,
running, cycling and being athletically active. Lululemon continuously broadens the product it
offers to its clients.The product range includeseverything from jackets, yoga pants, mats to
general fitness wear. Lululemon’s primary target used to be young active females but in recent
years it has widened its target market by developing more products for the physically active
male.
Current performance
Lululemon is growing its operations having increased its retail presence in USA, Canada, United
Kingdom, New Zealand, Hong Kong and Australia. As of February 2013, the company has 135
stores in the US, 51 in Canada, 24 in Australia, 2 in Hong Kong and one in UK. As of the last
annual report Lululemon employed 6,383 people, the majority of whom work in the company’s
retail locations. Lululemon experienced double digit growth in its revenue and net income. In
particular its revenue grew by 37% and its net income by 47% vs. 2011 numbers.Lululemon is
currently in search for a new CEO. As per the Board of Directors’ decision the current CEO will
perform her duties until a suitable replacement is found.
Mission
Lululemon was founded with the mission of “providing people with the components to live a
longer, healthier and more fun life”. Its mission is driven by a set of core values supporting it in
developing a high standard of product, integrity in the company, promoting work-life balance,
training its employees in goal setting and self-responsibility. Over the years it has shifted from a
traditional mission statement to a so-called mission-manifesto represented by a list of
inspirational slogans.
4. Lululemon Strategy Report Page 4
Vision
Lululemon’s vision is “elevating the world from mediocrity to greatness.” Lululemon refers to
mediocrity as a path that is unfulfilling and not doing anything about the imperfect life people
are living.Greatness is defined as a means of living a life of getting the best of everything and
doing all that is required to achieve it.
Objective
Lululemon’s onward objective prospects in its operation are based on a number of elements.
Lululemon anticipates maintaining its position in the industry and expects to prevail amongst
competitors. Its objectives reflect current and future goals Lululemon aspires to achieve.The
following is the list of these objectives:
Successfully identify retail locations to open new stores and attract new
customers.
Innovate and provide customers with new products.
Sustain its brand image in the industry.
Achieve a positive growth while maintaining an adequate cash flow.
Maintain and increase sales of current stores.
Operate every department at the company efficiently.
Maintain dedicated and experienced staff in the organization.
Continuously
Current Strategy
Lululemon’s current strategy allowed it to become one of the major players in the athletic
apparel wear. Since the company’s founding it has had to shift between different strategies to
help achieve what it is recognized for today. Lululemon’s strategic factors augmenting it in the
industry are the following:
Lululemon applies a different method of marketing its product compared to competitors,
the approach is known as grassroots marketing. Grassroots marketing is a method where
the company targets a small audience and hopes its message will be passed through to a
larger audience. This marketing strategy costs less and is more effective than others.
Lululemon applies a vertical retail strategy to sell its products to customers. Lululemon
only sells its product through its own stores and authorized yoga studios. The stores are
5. Lululemon Strategy Report Page 5
authorized to control daily operation obstacles that occur, allowing managers to give
feedback to upper levels of management in the company. Store employees are also asked
to interact with clients on an individual basis to meet their needs. Overall this allows
Lululemon to quickly respond to needs of customers and develop new products.
Lululemon has been growingever since its foundation and intends to increase its market
share by opening new retail locations geographically and offering new innovative
products regularly.
Lululemon continuously broadens the product line offered to females, males and the
youth. The company intends to increase revenue and customer base by increasing the
collection of products sold.
Corporate Governance
The Board of Directors elected by stockholders makes significant decisions in the company. The
board is responsible for hiring senior management, and making sure they lead the company
towards achieving its goals. The Board of Directors must be qualified and independent in its
decision-making. A Lead Director is elected from the Board to directly work with the CEO and
senior management to set agendas and goals for the company. Currently 29% of the common
stock is owned by Mr. Wilson, who has major influence in decisions that require shareholders
vote.
External Environment: PESTLE
Political Factors
Lululemon doesnot own any of the manufacturing facilities, instead it outsources its merchandise
production to manufacturers in third-world countries with unstable political environment.
Lululemon is exposed to trade embargos and increase in tariff rates. The companydoes business
in countries that have no counterfeit laws.This allows competitors to easily replicate and sell
products under Lululemon’s brand name, which maynegatively impact Lululemon’s brand image
and bottom line. Lululemon operates in countries with different tax regulations, exposing it to
double taxation if the countries donot have respective treaties in place to avoid double taxation.
6. Lululemon Strategy Report Page 6
Yet governments of these countries may have incentive programs applicable for Lululemon as an
employer of local labour.
Economicfactors
Lululemon operates in different economies, some of which are declining, increasing or are in a
stagnation stage, but no one can foresee the future of a market. Lululemon purchases and sells its
merchandise in different currency affecting the cost of importing and sales, which may serve as
advantage and disadvantage for Lululemon. The company is also exposed to inflation that can
have an adverse effect if operating cost increases while selling price remains the same.
Social factors
Lululemon is part of the health and wellness industry.In today’s society awareness towards living
a healthy life is emphasized, the population is more aware of the advantages that yoga and being
athletically active can bring to one’s life. Statistics has shown that yoga is one of the growing
industries having grown 87% over the past 5 years. Americans spent $10.3 billion dollars on
yoga classes and products in 2012 compared to $5.7 billion in 2008, and forecast indicates the
trend will continue its upward trajectory. The yoga industry is going to experience a rise from the
baby-boomer generation, it is estimated that 76 million Americans fall under that age group, and
they tend to be financially able to spend towards recreational activities.
Technology factors
Lululemon is operating in an era where 2.4 billion people surf the Internet causing the spread of
globalization.This allows Lululemon to have access to different manufacturers to support it in
outsourcing efficiently. The Internet also allows customers to shop more confidently as they can
compare competing productsof different producers. Retailers can take advantage of selling
through e-commerce due to low operating cost.Statistics have shown the amount spent on online
shopping was $763 billion dollars in 2011. The Internet has enabled advertising to be done
through social media, via mobile means and search engine marketing making it one of the
cheapest and efficient ways to market a product.
Legal factors
7. Lululemon Strategy Report Page 7
Lululemon gets involved in legal matters with its customers, employees, competitors and
suppliers due to disagreements and damages caused while doing business. The recent lawsuit
against a competitor,Calvin Klein, Lululemon filed a suit against CalvinKlein for infringing their
yoga pants patent, and however they came to a quick undisclosed settlement. Recently also an
investor has filed a lawsuit against the company for alleging Lululemon of making misleading
statements to artificially increase their stock price and failing to disclose the defects in its yoga
pants recalled for being see-through.Lululemon gets into disagreements with employees at times,
but the resolution of such matters does not have any adverse effect in the operation of the
company.
Environment
Lululemon is currently not affecting the environment directly.This is due to outsourcing all their
products through third party manufacturers. Third party suppliers are mainly located in Southeast
Asia where pollution regulation is becoming stricter.
Porters Five Forces
Threat of new entrants
The threat of new entrants is high due to low entry barriers within the industry. Lululemon does
not own any patents allowing new competitors to easily replicate their product. Lululemon’s
wear is supplied through third party manufacturers and since the company has no long-term
contract, manufacturers can easily supply other retailers under their brand name. The profit
margin can attract investors due to it being high when compared to other industries, and the trend
in people practicing yoga is on the rise. Factors such as brand equity and retail presence can be
hard for new competitors due to Lululemon having a strong position in retail locations and a
strong brand image.
Bargaining power of buyers
Bargaining power of buyers is medium due to Lululemon’s distinctive design and material when
compared to competitors’ product. However, customers can give preference to competitor’s
product due to brand image or discount and allowance pricing. The market Lululemon is
8. Lululemon Strategy Report Page 8
currently operating in will always be competitive and Lululemon is not the only player
dominating the industry.
Bargaining power of suppliers
Bargaining power of suppliers is low due to Lululemon not having a long term contract with its
suppliers, even though 85% of its merchandise comes from only 10 suppliers and some fabrics
are currently supplied by one company. Still Lululemon is confident of being able to get its
merchandise from other suppliers in case of any disruption from current ones, but it may be at a
higher cost.
Threat of substitute products
The threat of substitute products is high. Although the high quality and materials used in the
Lululemon apparel is difficult to replicate there is lots of other brands that cater to active
individuals. However, the lower performance and feel of the materials used by the competition
give Lululemon an advantage since the customers are less likely to switch to products of less
quality.
Rivalry among existing competitors
The rivalry among competitors in the apparel industry is high. Lululemon’s main competitors are
Nike, Adidas and Under Armor. The competitors have access to a great amount of resources as
compared to Lululemon. The competitors have been established for a longer period, they have a
larger and broader customer range, greater financial capabilities, a stronger brand image and a
broader retail presence.
Customers
Lululemon was primarily targeting women customers, but over the year it has broadened its
customer base by designing products for the youth and male. In the latest available data, 11% of
total revenue came from selling men wear, majority of the customer base is female due to many
reasons.Research has shown 82.2% of the public that practice yoga are females in the US.
Although Lululemon is known for yoga wear, female customers have made it a trend to purchase
9. Lululemon Strategy Report Page 9
their clothes for casual wear on daily basis. Customer age group for Lululemon’s product is
mostly 18-44 with household income of $75,000 and above.
Competitors
The athletic apparel wear industry is highly competitive. Lululemon’s top 5 competitors are
Nike, Addidas, Under Armour, Lucy Activewear and Bebe Sport. Competition is mainly through
brand image, quality, innovation and price. Lululemon’s competitors have substantial
competitive positioning due to being more established with a broader customer base and product.
Competitors are also strong in terms of financial, R&D, marketing and retail. However,
Lululemon differentiates itself in the way it markets its product and believes it has a strong loyal
customer base due to its grass root marketing and vertical retail strategy.
Internal Environment
Corporate structure
Lululemon has a functional organizational structure, allowing decisions in the organization to be
decentralized. Lululemon intends to have its organizational structure as flat as possible.
Lululemon believes cross functional communication is crucial, allowing it to innovate and
differentiate their product. Departments such as design, retail operation, information and
technology must be able to give feedback and respond to each other’s’ request quickly.
Management strives to get information flow from design to the retail store shelves in a period of
45 days. The functional structure also allows Lululemon to function more efficiently by
forecasting accurately, operating within budget and strategic plans are selected.
Corporate culture
Lululemon’s organizational culture comes from their mission manifesto and vision statement,
Lululemon’s mission manifesto is made of 31 inspirational phrases that lead one towards a
positive and healthy living. Lululemon’s anticipation is for employees to implement its mission
in their life and work, in the optimism that it would create a definite work culture. In an
interview with the current CEO, it is reported the organization promotes employees to make their
10. Lululemon Strategy Report Page 10
own decision when operating stores.Employees are encouraged to take responsibility and be risk
takers to give them a sense of entrepreneurship. The corporation has a golden rule that states if
an employee makes a mistake they have to take control and fix it in the expectation of learning
from the mistake.
Corporate Resources
Marketing
Lululemon believes it doesnot require implementing a traditional method of marketing instead it
has takena different path to market their product. Lululemon employs a low cost strategy of
marketing that allows it to soar to unprecedented achievements. Its strategy is grassroots
marketing.This strategyis implemented by working closely with fitness professionals and local
gym personals to help in promoting their product. The people helping them in establishing the
brand in the community is calledambassador.The ambassador works closely with the
communities in the store area, each market is separately analyzed before the grassroots
marketing blueprint is applied. Lululemon highly relies on this method of marketing.This method
has enabled it to have a strong brand image, loyal customers and a large market share in the yoga
apparel industry.
Financial
Lululemon has been experiencing positive growth from time of establishment, it recorded $1.37
billion dollars in revenue at the end of 2012.Lululemon experienced a 57% growth in 2010,
40.6% in 2011 and 37% in 2012. Net income has grown 109% in 2010, 51% in 2011 and 47% in
2012. (Please refer to page 17 of this report for full financial analysis of the past 3 years)
R&D
Lululemon’s been innovative in the products they offer to its customers this is achieved through
many means. It thrives for feedback from all areas to help in the enhancement of their product by
information coming from retail employees, ambassadors, third party suppliers and athletes.
Retail employees can communicate the reviews they get from a product to management for it to
be closely studied, ambassadors are given the product to test and give feedback to the design
team. Conventions are also held to get feedback from athletes and consumers on product
enhancement and designs. Lululemon works closely with its suppliers to develop innovative
11. Lululemon Strategy Report Page 11
fabrics, over the course of years Lululemon and its suppliers have been able to be innovate
fabrics such as Luon, Soyla, Boolux, Silverescent, Vitaseaandwet.dry.warm.
Operation & Logistics
Lululemon retails their products through its stores and a small percentage through wholesale to
yoga studios and fitness centers. The products are being outsourced to approximately 50
manufacturers 90% of which are situated in Asia, and the other 10% in the Americas. Forecast of
inventory needs must be accurately estimated due to it being outsourced from countries far from
the distribution centers. Lululemon currently operates three distribution centers located in
Vancouver, Washington and Melbourne. This covers Canada, U.S. and Australia which are the
top 3 countries were they have the highest retail presence.
Human resources
Lululemon reported having 6,383 employees as of the last reporting fiscal. The employees are
expected to share the same vision as Lululemon. Employees are provided with many in-house
workshops such as self-development and goal setting to allow them to lead towards their long-
term objectives. Lululemon believes their employees are satisfied with the compensation they
receive for their employment and has offered them many means to keep their relationship
excellent with the employees.One is to offer them an option to purchase a limited amount of
stocks in the company at a 25% discount from fair market value.
Information Technology
Lululemon is highly dependent on its information system to operate its business.The system it
employs assists them to process transactions, inventory management, purchases, sales and
overall support a cost efficient operation. Lululemon has been able to enhance its image and sell
internationally through its website.Roughly 14% of the total revenue for 2012 came through its
Lululemon and Ivivva website. An advantage of selling through its website is that it allows
customers to purchase at any time, wide exposure, low overhead and helps in entering new
markets.
12. Lululemon Strategy Report Page 12
Strategic Alternatives
Alternative 1: Create a mass market brand that is cheaper than Lululemon.
Alternative 2: Offer sporting gear for main sports like soccer, basketball, baseball.
Alternative 3: Offer yoga apparel wear for plus size active people.
Alternative 4: Create a luxury brand to target high end consumers.
Analysis of Alternatives
Alternative 1
Create a mass market brand cheaper than “Lululemon” that offers yoga wear.
Pros
Revenue and customer base will increase.
A new brand becomes a new subsidiary in the company that can be sold for a profit.
Lululemon has the knowledge and experience to create the products.
The cost of startup would be less than it is for someone who is newly entering the
industry.
A more diversified customer base in terms of income, age and employment.
Can be sold through department stores and other private retail outlets if Lululemon
decides to not open exclusive stores.
Reduce dependence from its Lululemon operation.
Cons
Lower profit margin.
Create a price war with competitors.
It can have a negative effect on the brand “LULULEMON” that is currently successful.
A new subsidiary will require investment in resources, staff and retail locations.
Can affect the profitability of Lululemon, by customers shifting to its cheaper brand.
Alternative 2
Offer sporting uniform for main sports like soccer, basketball, baseball.
Pros
Male customers can be targeted easily.
13. Lululemon Strategy Report Page 13
Increases diversification of product line.
Increases sales by selling to current and new customers.
Increases revenue.
Major sport events happen throughout the year that offer free marketing of the product.
Customers buy sports uniform for more than just playing the sport, but for supporting the
game and wanting to be part of the sport by wearing the sports outfit.
Reduce dependence from its yoga wear.
Cons
Lululemon isn’t experienced in major sports uniform.
Lululemon will need to change its marketing strategy to promote the product by
marketing the traditional way.
A large investment is required.
Lululemon will be competing with companies that have established themselves very
deeply in the industry.
Alternative 3
Offer yoga apparel wear for plus size active people.
Pros
A new demographic of customers that arenot being catered by many other competitors.
There arenot many competitors that currently offer fashionable plus size outfit.
Increase in revenue.
Higher probability of plus size women purchasing regularly to look good.
Frequent purchases of new outfit due to weight loss from working out.
Small investment is required.
Cons
Current Lululemon customers maybe dissatisfied seeing obese people wearing
Lululemon.
It can affect the brand image of the product, and make Lululemon lose its current
customer.
Retail stores will need to change their layout to make space for the new selections.
14. Lululemon Strategy Report Page 14
Obese customers can lose interest in fitness due to extreme challenges and slow results.
Alternative 4
Create a luxury brand to target high end consumers.
Pros
Increase revenue and customer base.
Lululemon possess all the infrastructure required for startup.
High differentiation amongst competitors.
No price war involved between competitors.
Customers are upmarket clientele
Higher profit margin.
Customers have already had a connection with Lululemon and know the product.
Entering a niche market is easily manageable than a mass market.
Reduce dependence from the Lululemon brand
Cons
Customer target is limited to high income earners.
Lululemon customers might feel they’re not getting the best.
Retail location set up will be expensive, due to location, and store design.
Lululemon doesn’t have experience in the high-end apparel wear.
There is an investment risk of being the first movers in a market of high-end yoga wear.
Strategic Recommendation
Lululemon’s IPO since 2007 has grown at a rate of 447%, making investment in yoga pants one
of the most profitable industries. Lululemon has no current or long-term debts in their balance
sheet, and hasnot declared any dividend, giving investors the confidence that they are in a growth
stage, and in hopes of maximizing shareholder wealth. The company has accumulated a vast
amount of knowledge, experience and resources to expand within the clothing industry.
Lululemon currently has $590 million dollars in its balance sheet allowing it to undertake many
business opportunities in the industry. Undertaking new business opportunities gives advantages
of diversifying the business by reducing reliance on current offerings and it maximizes
shareholders wealth.
15. Lululemon Strategy Report Page 15
The strategic recommendation that is best suited for Lululemon is to create a luxury brand to
target high-end customers. Lululemon started as a store targeting a niche market of people that
practice yoga but over the years Lululemon has transformed from being a niche product to a
product that has become appealing to the mass market. People were buying Lululemon not to do
yoga but because it has become a fashion trend and something to wear on a day to day basis.
Lululemon’s yoga wear has become a fashion wear and creating a high-end brand will satisfy the
needs of the customers that wear clothes to make them feel superior in wealth, and the sense of
having money. Customers that will be purchasing the high-end brand have already established a
connection with yoga wear by wearing Lululemon’s apparel and can be attracted easily to the
high-end brand. The benefits to Lululemon in getting into high-end market is that the investment
is not as high compared to other opportunities, and Lululemon will still be operating in a niche
market where growth can be easily controllable versus entering a mass market.
Lululemon currently has a very diverse customer base from high school students to active
moms.Many customers at Lululemon have lost the feel of exclusivity about the brand and the
only way they can get that sense back is for them to purchase a high-brand that only few people
can afford, and for customers that donot need feel the need for exclusivity will remain
purchasing the original Lululemon brand. The markets for high-end brands have been
experiencing growth even during recessions, and extremely high profit margins. Luxury high-
end products have been experiencing a dramatic growth and while common brand retailers are
experiencing a drop in their sales, luxury brands are on the rise. The luxury high-brand industry
is estimated to be worth $285 US billion dollars in 2012 and its forecasted that it will rise more
in the coming years.Research has shown developing countries such as China has accounted for
13% of the luxury brand purchases for 2013, and it is expected that it will grow by 20% in
2014.It is also estimated that sales for luxury brands is going to rise by 6% in the US, and 12% in
central and South America. The other advantage to luxury brands is that they compete in quality
and design and not in price and majority of the consumers that purchase luxury brands make over
$150,000 with a professional secure job. Lululemon should not compete in price but rather
should differentiate itself from its competitors through its products, entering the Luxury brand
market will not only make their profit margins higher but also make them the first movers of
16. Lululemon Strategy Report Page 16
exclusive yoga apparel in the luxury market. They were the first movers in the yoga inspired
athletic wear industry and they proved to be successful and the way the luxury brand industry is
headed, Lululemon will prove to be successful again.
Implementation
Lululemon currently has adequate cash and resources needed to fuel to start a brand aimed
towards luxury high-end customers. Lululemon can implement the strategy in 7 stages.Stage 1
will be to first create a brand name, logo and slogan under which it will be operating, this is one
of the most important stages in the business because your product will be identified by its brand
and it is something that will remain with the business for the life of it. The brand, logo and
slogan must integrate with the company’s mission and vision. Stage 2 of developing the strategy
is to recruit a team of designers that are experienced in luxury brand designing and make them
collaborate with Lululemon’s existing design team. With the experience of two diverse design
teams they must be able to create distinctive luxury yoga apparel that will make it stand out and
fit in a luxury high-end brand yoga apparel store. Stage 3 of the implementation is to find the
locations where the brand will be retailed at, commonly luxury brands are sold in areas of the
city where high income households are located. For example in Toronto the location that would
be most suitable for them is Yorkville, Toronto. This is where majority of all the upscale retailers
are situated in. Lululemon must first implement the strategy in 3 major cities that are populated
with the most high income households. Stage 4 is to put together a team of interior designers to
layout the store for the products. The layout of the store will be a physical representation of the
product; therefore the store design must be elegant and architecturally luxurious. Stage 5 is to
establish a marketing team solely for the brand, Lululemon can still use its grassroots strategy,
but it can include some traditional marketing strategies with it as well to assist it in being
recognized in the elite community. Stage 6 is to hire and train employees to work at the retail
locations, employees must be trained to assist the customers in the best manner. Stage 7 would
be the last part of the implementation process this can only happen when the product, store,
marketing and workforce have been successfully established. The opening of the store must be
grand with media coverage to publicize its opening.
Evaluation and control
17. Lululemon Strategy Report Page 17
Once the strategy has been executed, Lululemon must assess if the new strategy is taking the
corporation in the right direction. Lululemon must make sure that the new brand is earning the
expected amount, because at the end it all comes down to return on investment. A survey must
be completed by the company to see the level of satisfaction with the new brand amongst
customers. New customers must be offered a questionnaire to get feedback of the quality of the
product sold to them. Financial statements must be analyzed to see if profit and revenue is in an
upward trend. Return on investment, net income and revenue must also be compared with the
industry average. The overall outlook of the organization must be on a track to achieve their
short term and long term forecast. (Please refer to page 19 to view pro forma statement)
Financial Ratio & %
Rounded to the nearestnumber& days
Fiscal Year 2012 2011 2010
Liquidity Ratio
CurrentRatio 5.9 5.1 4.56
QuickRatio 4.47 4.01 3.81
Cash Ratio 4.43 3.96 3.71
Activity (daysortimes)
AssetTurnover 1.5 1.6 1.8
InventoryTurnover 4.7 5.3 6.2
Payable period 4 days 5 days 6 days
InventoryAge 78 days 68 days 58 days
Profitability
Gross profitMargin 56% 57% 56%
OperatingMargin 28% 29% 25%
NetProfitMargin 20% 19% 17%
Returnon Equity 36% 37% 39%
Returnon Assets 30% 30% 30%
18. Lululemon Strategy Report Page 18
External Factors Weight Rating
Weighted
Score
Comments
1 2 3 4 5
Opportunities
Internationalexpansion of its retail stores.
0.10 2.00 0.20
Lululemon has the potentialof
expanding in developed and
developing countries
Increase its product offering for male and youth
0.20 3.00 0.60
Lululemon increasing its male and
youth customer base, currently it
concentrates more on females.
Diversify its product offering.
0.20 2.00 0.40
Offer products for other sports
Acquisition of third party suppliers
0.05 1.00 0.05
Takeover major suppliers to reduce
dependence
Threats
Consumer spending going down
0.15 4.00 0.60
An impact in the economy can
affect consumer expenditure.
Losing market share to competitors
0.20 5.00 1.00
The industry of atheletics apparelis
highly competitive.
Counterfeiting of its product
0.10 2.00 0.20
Lululemon products can be
counterfeited and sold for cheaper
price.
Total Scores 1.00 3.05
Internal Factors Weight Rating
Weighted
Score
Comments
1 2 3 4 5
Strengths
They industry they
are in is
experiencing
growth.
0.10 4.00 0.40 Yoga practice is on the rise amongst many
societies
Loyal Customers 0.15 5.00 0.75 Lululemonpossess customers who are loyal
towards the product and brand.
Innovative in its
yoga apparel
0.05 4.00 0.20 The fabric and design of the product is
innovative.
High equity to debt
ratio
0.05 2.00 0.10 Lululemon does not have any major debt in its
balance sheets
Strong brand image 0.10 4.00 0.40 Lululemons is one of the well-known brands in
the market for yoga wear
Vertical retail
strategy
0.15 4.00 0.60 Products are retailed through corporate stores
Weaknesses
Lululemon does not
possess any patents
on its product
0.10 4.00 0.40 Product is not safeguarded frombeing
replicated by competitors.
The company relies
highly on yoga
apparelsales
0.15 5.00 0.75 Lululemon doesn’t have a high diversification
in the products it offers.
Grassroots
marketing is the
only method of
advertising
0.10 3.00 0.30 Lululemons only method of marketing is
grassroots marketing.
Retail exposure is
low, versus
competitors
0.05 2.00 0.10 Lululemons retailoutlets are limited, potential
customers might not have access to purchase
its product.
Total Scores 1.00 4.00
19. Lululemon Strategy Report Page 19
Lululemon-Luxury Subsidary
For 2013 through 2015
(all numbers in $000)
REVENUE 2013 2014 2015
Gross sales $7,665.00 $17,520.00 $23,360.00
Less sales allowances 229.95 525.60 700.80
Net Sales $7,435.05 $16,994.40 $22,659.20
COST OF SALES
Beginning inventory 0.00 167.00 200.00
Plus goods purchased /manufactured 1700.00 3704.00 4531.84
Total Goods Available 1700.00 3871.00 4731.84
Less ending inventory 167.00 200.00 230.00
Total Costof Goods Sold 1533.00 3671.00 4501.84
Gross Profit (Loss) 5902.05 13323.40 18157.36
OPERATING EXPENSES
Selling
Salaries and wages 810.00 1620.00 2240.00
Advertising 500.00 1000.00 1500.00
Depreciation 90.00 180.00 240.00
Rent of retail stores 2100.00 4200.00 5600.00
Other 90.00 180.00 240.00
Total Selling Expenses 3590.00 7180.00 9820.00
General/Administrative
Salaries and wages $450 $550 $600
Rent 5 5 5
Designing 450 450 550
Insurance 80 80 85
Office supplies 1 1 1
Total General/Administrative Expenses $986 $1,086 $1,241
Total Operating Expenses $4,576 $8,266 $11,061
$1,326 $5,057 $7,096
Taxes on income 0 0 0
Net Income Before Taxes $1,326 $5,057 $7,096
20. Lululemon Strategy Report Page 20
Year 1
Locations- 3 stores
Average Salesperstore $7000
Mark up500%
3% of salesallowance
6 Full time employeesperstore
Advertisingperstore $166000
Average rentperstore $700000
Corporate expense $0.9million
Year 2
Locations- 6 stores
Average salesperstore $8000
Mark up500%
3% of salesallowance
6 Full time employeesperstore
Advertisingperstore $166000
Average rentperstore $700000
Corporate expense $1.1million
Year 3
Locations- 8 stores
Average sales perstore $8000
Mark up500%
3% of salesallowance
6 Full time employeesperstore
Advertisingperstore $166000
Average rentperstore $700000
Corporate expense $1.24million