Lululemon Athletica Incorporated Analysis

Running head: LULULEMON ATHLETICA INCORPORATED

Lululemon Athletica Incororated !achar" C #hel$%" &U#N '() No*em%er 1+, -)1+ Dr. Ca$taneda

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LULULEMON ATHLETICA INCORPORATED

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Lululemon Athletica Incororated Introduction

Lululemon Athletica Incororated i$ a coman" that $eciali/e$ in the de$ign and roduction o0 highend "ogain$ired athletic aarel. The coman" 2a$ 0ounded in 1334 in 5ancou*er, Canada, %" Chi 6il$on. 6il$on7$ in$iration 0or hi$ coman" came to 0ruition a0ter he too8 hi$ 0ir$t commercial "oga cla$$. A0ter 0alling in lo*e 2ith the acti*it" 6il$on reali/ed that the cotton clothing he u$ed 0or the acti*it" 2a$ inaroriate and un$uita%le gi*en it$ a%$ortion o0 $2eat and lac8 o0 ela$ticit". Thi$ re$ented a ma9or ro%lem 0or 6il$on and acted a$ hi$ de0ining mentalit" 0or hi$ %u$ine$$. U$ing hi$ a$$ion 0or "oga a$ a dri*ing 0orce, 6il$on oened a de$ign $tudio 0or "oga aarel that $er*ed a$ a "oga $tudio at night. rom their 6il$on 2a$ a%le to o00er hi$ de$ign$ to "oga in$tructor$ and 2ith $uch o$iti*e 0eed%ac8 oened hi$ 0ir$t $tore in -))) in 5ancou*er. 6il$on7$ de$ign 0or hi$ coman" $a2 to addre$$ a *oid in the 2omen7$ athletic aarel mar8et %" ro*iding 2omen 2ith athletic "ogain$ired er0ormance aarel ;
The goal 0or Lululemon $ince the concetion o0 the coman" %ac8 in 1334 ha$ %een to $ul" their con$umer$ 2ith the roduct$ the" need and 2ant to li*e acti*e, health", and acti*e li*e$. A$ a coman" the" en$ure highend >ualit" in the roduct$ the" roduce, creating and e*en trademar8ing $ome o0 the material$ the u$e, in addition to %eing 0ull" ac>uainted 2ith con$umer need$ on order to adat to the need$ o0 a changing mar8et. Integrit" and ethic$ run 0ull $2ing in Lululemon$ %u$ine$$ aeal a$ the coman" 2or8$ in uni$on to de*elo o$iti*e relation$hi$ 2ith all communitie$ their $tore$ are located in. Lululemon7$ 0ocu$ on the communit" i$ $o in*ol*ed in their %u$ine$$ model that the coman" ha$ ta8en to educating their $ta00 2ith the not


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9u$t the %a$ic$ %ut 0ull" immer$ing them into the 2orld o0 "oga 0itne$$ turning them into not a$$ociate$ %ut @educator$ ;
In Decem%er o0 -))+, Lululemon had gro2n to hold -( coman" $tore$ and - 0ranchi$ed $tore$. The" recorded $ale$ en route to B4+ million annuall". &" the end o0 -)) the coman" eanded oeration$ to hold '1 coman"o2ned $tore$ and 1) 0ranchi$ed $tore$. Net re*enue$ gre2 %" +( to B1'3 million 2ith a net income o0 around +.- or B(.( million. In -))( the coman" 2a$ large enough and the coman"7$ o2ner elected to ta8e the coman" u%lic on Augu$t -. In -))3 Lululemon$ net income gre2 to around +4.? million dollar$. Lululemon continued gro2 eonentiall" netting a ro0it o0 1-1.4 million in 0i$cal "ear -)11 and 14+.) million in -)1- ;uarter in -)1' increa$ing %" 1 to B)-.+ million 0rom B+-1.) million in the 0ourth >uarter o0 0i$cal -)1? ;In*e$tor.lululemon.com, -)1+=. Thi$ rogre$$i*e gro2th $ho2$ 0inancial $ecurit" in Lululemon7$ gro2th $trateg". Lululemon Business Strateg

Lulelemon Athletica Incororated u$e$ a $ound $trateg" o0 di00erentiation 2hen it come$ to their %u$ine$$le*el $trateg". According to uirement$ %etter than ri*al$ roduct$ ;-)1+, . 3?=. Lululemon u$e$ di00erentiation to concentrate and re*ol*e around a cu$tomer centricit" all 2hile rimaril" 0ocu$ing on the mar8et $egment o0 con$umer$ 2ho are concerned 2ith their general 2ell%eing. According to the Lululemon 2e%$ite and on their cororate relation$ lin8 the" %elie*e in heling eole ur$ue a $en$e o0 haine$$ and


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accomli$hment in li0e through an acti*e li0e$t"le. The" %elie*e that endor$ing an acti*e li0e$t"le and $uorting tho$e 2ith an acti*e li0e$t"le %" ro*iding the roduct$ and $er*ice$ the" need, con$umer$ can achie*e 0ull en9o"ment o0 li0e ;Lululemon Athletica, -)1+=. 6ith that %eing $aid a0ter re*ie2ing Lululemon7$ %u$ine$$ $trateg" it can %e concluded that their rimar" %u$ine$$ $trateg" i$ to %rand their coman" and roduct$ to li*ing an acti*e and guilt 0ree 2a" o0 li0e. Thi$ can %e $een in the roduct$ the" o00er to con$umer$ %ut al$o in the $er*ice$ the" o00er 2ithin their coman". ree "oga cla$$e$, a 2ell 0ormulated am%a$$ador rogram, and mo$t imortantl" a $olid commitment to the $u$taina%ilit" o0 their oeration$ lace Lululemon7$ commitment to their %u$ine$$ and cu$tomer$ in a high and o$iti*e light ;Lululemon Athletica, -)1+=. Their 0ocu$ on di00erentiation and cu$tomer and emlo"ee centricit" ha$ heled Lululemon %uild it$el0 into a con$umerminded and $u$taina%le organi/ation that commit$ to %e more than a retailer. Strategic Problem

6hile the $trategie$ Lululemon ha$ ro*ed to %e $ucce$$0ul it $hould %e noted that the" $u00er 0rom a narro2 0ocu$ed di00erentiation $trateg". #ince it$ 0ounding Lululemon ha$ narro2ed it$ %u$ine$$ to the 2omen7$ athletic aarel mar8et. Thi$ ha$ %ecome a $trategic ro%lem 0or Lululemon a$ their 0ocu$ on 2omen7$ aarel ha$ dominated their %rand image ;Lut/, -)1+=. Thi$ o$e$ a ma9or ro%lem 0or their %u$ine$$ a$ the men7$ aarel mar8et i$ one o0 the large$t oortunitie$ 0or Lululemon$ %u$ine$$. In addition Lululemon7$ $u00er$ 0rom a lac8 o0 glo%al %rand recognition a$ the" ha*e limited their %u$ine$$ rimaril" to North America. Thi$ lace$ their %u$ine$$ 0arther %ehind than their ma9or cometitor$ a$ the" are mi$$ing out on ma9or mar8et$ $uch a$ Euroe, A$ia, and #outh America. !ecommendation for "en’s #$$arel %&$ansion and Im$lementation


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or an ean$ion into men7$ aarel to 2or8 a good recommendation 0or Lululemon 2ould %e to generate a ne2 roduct line. #ince de$igning aarel 2a$ 2hat 6il$on 0ounded hi$ coman" on thi$ $olution $hould not ro*e too di00icult 0or Lululemon. The de$igner$ at Lululemon $hould continue their $trategie$ o0 di00erentiation to come u 2ith a more ma$culine name 0or their male aarel line. A0ter roducing the name and line the" 2ould then need to aeal to men in order to get them into their $tore$. The coman" could u$e decorati*e $trategie$ u$ed in mo$t retail chain$ and di*ide a $ection o0 their $tore into a male $ection cutting co$t$ o0ten a$$ociated 2ith oening a ne2 $tore. Thi$ $ection 2ould then aeal to men through $ection de$ign and decoration. Lululemon $hould al$o 0ocu$ on hiring more male a$$ociate$. A$ a coman" mo$t o0 their %rand a2arene$$ ha$ %een %uilt through communit" in*ol*ement. &" ha*ing more male$ 2earing and educating other$ a%out the ne2 roduct line %rand recognition 2ould gro2. !ecommendation for International %&$ansion and Im$lementation

Loo8ing at international ean$ion

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0ranchi$ing and %egan to %u" $tore$ %ac8 0rom 0ranchi$ee$. &" %u"ing %ac8 the $tore$, Lululemon 2a$ then in a o$ition 2here their %rand had di$$eminated into the Au$tralian 0itne$$ mar8et and 2a$ a%le to >uic8l" and e00icientl" integrate their %u$ine$$ into Au$tralia. A $olid recommendation 0or Lululemon7$ international ean$ion i$ to %egin 0ranchi$ing their $tore$ in lau$i%le emerging mar8et$. #ince the coman" ha$ e "e$ to o2n the ma9orit" o0 it$ $tore it 2ould ha*e to monitor and limit the amount o0 0ranchi$ed $tore$ it allo2$. &" limiting the $tore$ the coman" 2ould not onl" hold control o*er it$ a$$et$ %ut al$o gain *ital in0ormation 2hen it come$ to international mar8et$. U$ing limited 0ranchi$or$ 2ould allo2 0or Lululemon to $ee ho2 their %u$ine$$ 2ould integrate into 0oreign culture$. #ince the ma9orit" o0 their %rand recognition i$ %uilt uon cultural connection through their educator$ and a$$ociate$ it i$ un8no2n ho2 2ell their %rand 2ould integrate. &" allo2ing 0ranchi$or$ to %ring the %u$ine$$ to 0oreign mar8et$ Lululemon limit$ it$ o*erall ri$8 and gain$ much needed international %rand recognition. Lululemon can then choo$e to %u" %ac8 the 0ranchi$e$ in the 0uture 9u$t a$ the" did 2ith Au$tralia. 'onclusion

Lululemon i$ a coman" that ha$ 0irml" e$ta%li$hed a $trong reutation 2ithin their re$ected communitie$. 6ith a $ound commitment to >ualit", it$ $ulier$, it$ educator$, and it$ con$umer$ Lululemon ha$ gro2n at a $u$taina%le and ro0ita%le rate. Their %u$ine$$ ractice$ and $trategie$ ha*e $ho2n con$umer$ that the" are there to $er*e their intere$t$ and %e $ociall" re$on$i%le 0or their re$ected communitie$ e*en at the een$e o0 the coman". Thi$ een$e i$ $een in the lac8 o0 %rand recognition throughout international mar8et$. Ho2e*er, 2ith Lululemon entering the glo%al mar8et, there i$ no dou%t that the" 2ill continue to accomli$h


ma9or $ucce$$ in an" location the" oerate in %" continuing to u$e the current $trategie$ and commitment the" %uilt their %u$ine$$ on.

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Re0erence$
htt:JJin*e$tor.lululemon.comJrelea$edetail.c0mKRelea$eID4?+31 Lululemon.com,. ;-)1+=. "a# $ lululemon athletica. Retrie*ed 1- No*em%er -)1+, 0rom htt:JJ222.lululemon.comJa%outJ0a> Lut/, A. ;-)1+=. % Reasons &en Don't ant )o ear Lululemon. *usiness +nsider . Retrie*ed 1? No*em%er -)1+, 0rom htt:JJ222.%u$ine$$in$ider.comJlululemonoeningmen$$tore$ -)1?i//?1ITIMe

Lululemon Athletica Incorporated Analysis

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