Founded in 1998 in Vancouver by Chip Wilson. The company designs and produces more appropriate yoga apparel products. The 1st store was opened in Kitsilano in year 2000. The store was meant to be a community hub where people learn and discuss the physical aspects of healthy living from yoga. Target all ages, primarily active men and women: Individuals that work, play and share the vision of creating healthier, happier and more fun lives.
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Vision: Elevating the world from mediocrity to greatness and become the number one women's athletic apparel brand. Mission: Creating components for people to live a longer, healthier, more fun life. providing a community with a wellness in each of its stores. Objectives: To train their people so well that they could in positively influence their families, communities and the people walking into their stores. And to increase the number of male customer through the existing ones.
POLITICAL
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Tax Incentives
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Protecting product from imitation
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Consumers are price sensitive
ECONOMIC
SOCIAL
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Trend towards health consciousness
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Expectation of sale environmental standards
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TECHNOLOGY
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Increase in market reach due to internet capabilities Technologically advanced textiles
Threat of Substitute Products
Weak to Moderate
Bargaining Power of Suppliers
Strong
Rival Among Existing Firms
Bargaining Power of Buyers
Strong
Strong
Threat of New Entrants
Weak to Moderate
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Pursues a strategy of focused differentiation, concentrating on a consumer segment concerned with health and fitness The business strategy is to brand the company as conducive to a particular way of living by offering free yoga classes to employees and customers, creating an ambassador program, and emphasizing the sustainability of their operations.
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Strategic sales programs partnering with yoga and fitness facilities in order to feature Lululemon yoga equipment and apparel in studios
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Lululemon uses both backward vertical integration and forward vertical integration Has never pursued a horizontal integration strategy; they are a vertically integrated retailer involved in design, marketing, distribution and retail stages of the value chain Also vertically integrated in their e-commerce business
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Production is the only activity that is outsourced to low cost countries
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49 % - in China
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41% - in South East Asia
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3% - in Canada
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Remainder in US, Peru, Egypt –
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Company follows a Global strategy for their international business Has stores in North America, Australia and New Zealand, with showrooms carrying key styles in North America, Europe and Asia Company utilizes the overarching themes of fitness and positivity to reach customers in regions, rather than tailoring the approach for local markets
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Limited level of diversification in products Business is based upon production and sale of both fitness apparel and equipment for yoga and Pilates
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Lululemon has created a new program called "Fund a Goal," which was designed to eventually pay for high-performing employees to achieve one of the goals on their list. All of Lululemon's employees are given opportunities to attend fitness classes at local gyms in the area
Low quality products •
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Yoga pants were too sheer & see through Have to recall 17% of their products from the market New yoga pants still sheer & they are pilling after a few wear
Image problems •
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Popular CEO announced decision to step down Negative comment from founder regarding customers body size He mentioned that the big size customers should not wear their products
Missing out on major markets
Narrow focus •
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Focusing on women only Products size are up to UK 16 only (XL)
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Focusing mainly in Canada, NZ, Australia & US only Less physical store in other countries
Low quality products •
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Do not be too dependent on third parties producer & manufacturer Focus on quality control Do proper product testing Build good relationship with fabric supplier
Image problems • •
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Portray good image Give discounts to customers to attract them Remind employees and top management to serve customers properly Do not give negative comments to customers
Narrow focus •
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Do more promotions on men's attire & other products Produce more sizes of products Expand product line
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Do market research on other countries Expand to Asia, Europe and others Open more physical stores rather than having online business only
