Background: Lululemon Athelica Inc. is a company that was founded by Chip Wilson in 1998 and is headquartered in Vancouver, Canada. It is an apparel company that manufactures yoga, running, training and other sportswear. The emergence of yoga lovers drove the growth of the company. The women loved the high-quality yoga pants such that they wore them even outside the yoga studios and into everyday life. The patented “ luon” material gives the wearer a soft feeling, absorbs the moisture well and stretches. They have since expanded to produce other products including soft bra, work pants and outerwear. The company sells its wear from its over 406 stores based in the United States, Canada, United Kingdom, Australia, China, Germany and others. The company is currently experiencing stiff competition from the cheap athleisure wear that has flooded the market.
Strengths of Lululemon Athletica
Product Quality: The company makes top-notch quality apparel with innovative features and styles that are appropriate for yoga and other sporting activities. The products are made of quality texture and stretch easily.
Niche Market strategy: The company specializes primarily on sportswear and merchandise for training, running and yoga. With the increase in fitness awareness, more and more people are becoming physically active. This creates a huge demand for sportswear.
Premium Brand Affinity: The Company’s target clients are educated, health-conscious, high-income men and women. They are ardent lovers of the company products because of the comfortable yet fashionable wear (Snelling, 2012).
High Customer Engagement: The company engages the customers in a huge way, where the staff would refer to the customers by name. Again, the company culture of allowing the customers to try the clothes as many as they would wish.
Customer-Centric Business Model: The company seek to know the customers’ needs and feedback to make better products that meet customer needs and wants.
Weaknesses
High Prices: The company products are often pricey compared to its competitors like Nike, Under Armour and Amazon. This is because of the high fund investment made in research and development to develop quality fabrics.
Brand Perception: Lululemon is considered a yoga brand even though it has expanded its products appropriate for other sporting activities. Additionally, the company products are primarily viewed as women products. This is not the case because the sale of men’s wear constituted 21% of the company total of 3.3 billion sales in 2019.
Operational Issues: The company has had a slump in sales for some time, and this has been attributed to some operational issues like few number of colours to choose from, a visual merchandising problem in their website and challenges of scaling up operations.
Lululemon’s Core Competence
Its core competence lies in its ability to produce high-quality sportswear through rigorous innovations and development.
Lululemon’s Opportunities
Product Innovation and expansion: The Company employs sweat resistance technology to produce exceptional sportswear that cannot compare to its competitors. Furthermore, it has seen its products expand from just yoga wear to running, training and athleisure wear. It also to move from athleisure wear into other categories like personal care products.
International Market Expansion: Lulumenn seeks to increase its presence in Asia-pacific, China European markets.
Lululemon Threats
Competition: The market for sportswear is highly competitive with the entry of Nike, Under Armour, Gap and Amazon, who sometimes have a broader presence, lower prices and big budgets for operations.
Changing trend in culture taste and preferences: Customers taste, and preferences are constantly evolving, and this calls for Lululemon to continually research and innovate products that meet the clients’ needs (Hendrix, 2004).
Problem statement
Lululemon Athletica to expand distribution and to increase their presence as to increase sales on men’s wear by 38%, thereby making a total of 5.9 billion in sales.
Strategic Alternative
Lululemon can become a Broad differentiator. This is by ensuring that they continue producing high-end sportswear while at the same time expanding their distribution to Noth America, China and Europe markets.
It could also adopt Niche Differentiator where they will focus on high tech segment thereby being able to produce products with excellent design, create product accessibility and also create awareness of their products to the people (Casey,2002).
Target segment
Sportswear comprises demographic segment which divides a market age, gender, family size, education level, income and occupation variable. Lululemon will be interested in the men wear segment.
Recommendations
Lululemon should focus on Broad differentiator so that they can beat their competitors. They should invest in innovations and technology so that they produce top-notch high-end sportswear. This will help them reach a broader market and thereby increase sales. Their high-quality products will make them a preferred option by clients, thus beating the competition.
Implementation
Lululemon should develop high-quality sportswear that meets the needs of the physically active clients that will be superior to what the competition offers.
Tracking Metrics
Lululemon should conduct a survey targeting the high elite and sophisticated athletes to determine whether LULU wear is their apparel of choice. A review of the delivery records will ascertain whether the LULU wear is distributed in many parts of the world. Books o account like the profit and loss accounts will be used to determine whether sales have gone up and by what margins.
Take away
Despite the facts that Lululemon is facing stiff competition, it could still raise its sales by venturing into new markets. It should also embrace continuous improvement through research and development to keep them ahead of the pack.
Works Cited
Casey, Catherine. Critical Analysis of Organizations: Theory, Practice, Revitalization. SAGE, 2002.
Hendrix, Basye. Critical Analysis: The Business Manual. 2004.
Snelling, Jennifer. The Influence of the SWOT Analysis in Organizational Development Strategic Planning. GRIN Verlag, 2012.