6. Which one of the five generic competitive strategies discussed in Chapter 5
most closely approximates the competitive approach that Lululemon is
employing?
7. What do the data in case Exhibit 1 reveal about Lululemon's financial and
operating performance?
8. What 3-4 top priority issues do CEO Laurent Potdevin and Lululemon
management need to address?
9. What recommendations would you make to Lululemon CEO Laurent Potdevin?
At a minimum, your recommendations should cover what to do about each
of the top priority issues identified in question 8.
10. What changes has the company made since 2014 to address the issues
identified in question 8?
Your paper should be 6- to 8-pages long, excluding title page and references, with
support from a minimum of two external sources. Be sure your paper adheres to the
CSU-Global Guide to Writing and APA Style. The CSU-Global library is a good place to
find these sources.
Option #2: Lulumon Athletica
Before beginning this case analysis assignment, read through the Guide to Case Analysis
on pages CA-1 through CA-12 of your text. Make sure to pay close attention to Table 2,
The Ten Commandments of Case Analysis.
Read through the Lululemon Athletica case studyon pages C-73 through C-90 of your
text. Review the items below that relate to the case study.
1. Lululemon's CEO Chip Wilson's Apology Called Worst Ever
2. Exclusive Interview with Lululemon Founder Chip Wilson
3. Sherman, L. (2016, January 25). The rise, stumble and future of Lululemon.
Retrieved from http://www.businessoffashion.com/articles/intelligence/the-
rise-stumble-and-future-of-lululemon
After you complete the reading and watch the videos, develop responses to each of the
following questions.
1. How strong are the competitive forces confronting Lululemon in the market
for performance-based yoga and fitness apparel? Do a five-forces analysis to
support your answer.
2. What do you see as the key success factors in the market for performance-
based yoga and fitness apparel?
3. What does a SWOT analysis reveal about the overall attractiveness of
Lululemon's situation?
4. What are the primary components of Lululemon's value chain?
5. What are the key elements of Lululemon's strategy?
retail stores, more than 100 international-licensee
operated stores, and bebe.com.
A number of other national and regional retailers
of women's apparel, seeking to capitalize on growing
sales of activewear made of high-tech fabrics, had
created their own labels for fitness apparel suitable
for yoga, running, gym exercise, and outdoor activi-
ties, For example, Nordstrom, a nationally respected
department store retailer, had recently introduced
its own Zella line of attire for yoga, cross-training,
workouts, swimming, and “beyond the workout”;
many of the initial products in the Zella collection
were designed by a former member of lululemon's
design team. Zella-branded products were offered
in regular sizes (XXS, XS, S, M, L, XL, and XXL)
and plus sizes (1X, 2X, and 3X). Nordstrom was
also marketing several other brands of activewear
for women, men, and juniors, including Nike, Under
Armour, Patagonia, Reebok, and adidas. In 2014,
Nordstrom's activewear offerings could be purchased
at 117 Nordstrom full-line department stores (typi-
cally 140,000 to 250,000 square feet in size) and 148
Nordstrom Rack stores (typically 30,000 to 50,000
square feet in size) in 36 states, as well as online at
Nordstrom's website, www.nordstrom.com.
Typically, the items in the Gapfit, Athleta, lucy,
bebe Sport, and Zella collections were priced 10 to
25 percent below similar kinds of lululemon prod-
ucts. Likewise, Nike, Under Armour, adidas, and
Reebok apparel items were usually less expensive
than comparable lululemon-branded items.
and paid millions of dollars annually to numerous
high-profile male and female athletes to endorse
their products. Like lululemon, they designed their
own products but outsourced the production of their
garments to contract manufacturers.
Three New Formidable
Competitors Emerge
Headed into 2014, lululemon was confronted with
increasingly stiff competition from three specialty
retailers that had taken note of lululemon's success
and opted to significantly expand their offerings of
women's activewear and fitness apparel:
• Athleta. Athleta was a relatively new chain and
online retailer (athleta.gap.com) that spe-
cialized in comfortable, fashionable, high-
performance women's apparel for workouts,
sports, physically active recreational activities,
and leisure wear. The chain had grown from 1
retail store in 2011 to 65 retail stores coast to
coast as of early 2014; more Athleta stores were
expected to open in 2014 and beyond. Athleta's
expanding product line included swimwear, tops,
bras, jackets, sweaters, pants, tights, shorts, T-shirt
dresses, performance footwear, sneakers, sandals,
bags, headwear, and gear. Items were colorful,
stylish, and functional. In April 2014, the array
of apparel items and color selections at Athleta's
website exceeded those at lululemon's website;
Athleta's online sales grew 21 percent in 2013. A
number of items in Athleta's retail stores and at its
website were available in tall and petite sizes, as
well as large and extra-large sizes. According to
Nancy Green, Athleta's general manager, "Many
of our competitors offer performance or lifestyle
apparel, but we have extraordinary expertise and
strength in both categories. It's about owning the
fusion of premium performance, fashion, and
lifestyle." Athleta utilized well-known women
athletes and local fitness instructors to serve as
brand ambassadors by blogging for Athleta's
website, teaching classes at local stores, and test-
ing Athleta garments. In 2012, Athleta initiated
its first national advertising campaign, “Power to
the She," to promote the Athleta brand. In addi-
tion, Athleta had a special social media website,
www.athleta.net/chi, that connected women
with interests in sports and fitness, nutrition and
health, tutorials and training plans, and travel and
adventure. Athleta was a subsidiary of The Gap,
Inc.; in 2013, Gap had 3,095 company-operated
retail stores worldwide and 312 franchised stores
that operated under such brand names as Gap, Old
Navy, Banana Republic, Athleta, and Intermix.
The product offerings at the 1,236 Gap-branded
stores included a GapFit collection of fitness and
lifestyle products for women.
• Lucy. Lucy was a women's activewear brand
designed for style, performance, and fit that was
intended for yoga, running, training, and other fit-
ness and active recreational activities; the product
offerings included tops, bottoms, skirts, dresses,
jackets, hoodies, sports bras, socks, caps, head-
bands, and bags and totes. Apparel was made
from five lucy signature fabrics, each with dif-
ferent combinations of performance features
that included moisture-wicking, odor-inhibiting,
seamless, stretch, thermal warmth, wind resistant,
and water resistant. Many garments were offered
in three distinct fits: relaxed, body skimming,
and body hugging. Pants came in three lengths
(short, regular, and tall). Garments were typically
offered in six sizes: XXS, XS, S, M, L, and XL.
Lucy-branded performance apparel was sold at
63 company-owned lucy stores in 15 states and
the District of Columbia and at www.lucy.com;
plans called for opening additional stores. Lucy
had recently initiated new advertising campaigns
and remodeled all its existing stores, using a
design that featured more social space, commu-
nal tables and benches, soft canopy lighting, and
nice dressing rooms. Lucy was a wholly owned
subsidiary of VF Corp., a designer, marketer,
wholesaler, and retailer of over 30 brands of
apparel and footwear, with 2013 sales of $11.4
billion. Sales at lucy stores in 2013 were in the
range of $110 million.
• Bebe stores. Bebe touted its stores as upscale,
visually stimulating boutiques that were a go-to
destination for chic, contemporary fashion. The
company's bebe Sport collection consisted of
apparel for a variety of fitness and recreational
activities and included sports bras, tops, pants,
shorts, jackets, hoodies, and tennis outfits. Gar-
ments were offered in two size ranges: regular (XS,
S, M, and L) and petite (S and M/L). Bebe marketed
its bebe Sport collection through more tl
EXHIBIT 5 The Lululemon Manifesto
.
• Drink FRESH water and as much water as you can. Water flushes unwanted toxins from your body and keeps your
brain sharp
• A daily hit of athletic-induced endorphins gives you the power to make better decisions, helps you be at peace with
yourself, and offsets stress.
• Do one thing a day that scares you.
• Listen, listen, listen, and then ask strategic questions.
• Write down your short and long-term GOALS four times a year. Two personal, two business and two health goals for
the next 1, 5, and 10 years. Goal setting triggers your subconscious computer.
. Life is full of setbacks. Success is determined by how you handle setbacks.
• Your outlook on life is a direct reflection of how much you like yourself.
. That which matters the most should never give way to that which matters the least.
• Stress is related to 99 percent of all illness.
• Jealousy works the opposite way you want it to.
• The world is changing at such a rapid rate that waiting to implement changes will leave you 2 steps behind. Do it
now, do it now, do it now!
• Friends are more important than money.
Breathe deeply and appreciate the moment. Living in the moment could be the meaning of life.
• Take various vitamins. You never know what small mineral can eliminate the bottleneck to everlasting health.
• Don't trust that an old age pension will be sufficient.
• Visualize your eventual demise. It can have an amazing effect on how you live for the moment.
• The conscious brain can only hold one thought at a time. Choose a positive thought.
• Live near the ocean and inhale the pure salt air that flows over the water (Vancouver will do nicely).
. Observe a plant before and after watering and relate these benefits to your body and brain.
• Practice yoga so you can remain active in physical sports as you age.
• Dance, sing, floss and travel.
• Children are the orgasm of life. Just like you did not know what an orgasm was before you had one, nature does not
let you know how great children are until you have them.
• Successful people replace the words "wish," "should" and "try," with "I will."
• Creativity is maximized when you're living in the moment.
• Nature wants us to be mediocre because we have a greater chance to survive and reproduce. Mediocre is as close
to the bottom as it is to the top, and will give you a lousy life.
• Lululemon athletica creates components for people to live longer, healthier and more fun lives. If we can produce
products to keep people active and stress-free, we believe the world will become a much better place.
. Do not use cleaning chemicals on your kitchen counters. Someone will inevitably make a sandwich on your counter.
• SWEAT once a day to regenerate your skin.
• The perfect tombstone would read "all used up."
• 10-15 friends allows for real relationships.
• Communication is COMPLICATED. We are all raised in a different family with slightly different definitions of every
word. An agreement is an agreement only if each party knows the conditions for satisfaction and a time is set for
satisfaction to occur.
• What we do to the earth we do to ourselves.
• The pursuit of happiness is the source of all unhappiness.
Purchase answer to see full
attachment