Lulumon Athletica

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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.


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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.
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Explanation & Answer

Attached.

Running Head: LULUMON ATHLETICA

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Lulumon Athletica
Name
Institution

LULUMON ATHLETICA

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Question 1: How strong are the competitive forces confronting Lululemon in the market for
performance-based yoga and fitness apparel? Do a five a five forces analysis to support your
answer.
The competitive power in Lululemon is very strong from the established brands like
Athletica, Nike, Adidas, Lucy, the gap and also bebe stores because these organizations provide the
economic scale with very quality products. Lululemon has many substitutes products. These
products are available at a lower price though they have a similar quality of those in Lululemon.
The suppliers in Lululemon have a very high bargaining power due to the high demand for other
brands which have been established. The supply power in the Lululemon is very high making it be
confronted in the market for performance-based yoga and fitness apparel. Due to the increased
value of the company, there are many available suppliers with the aim of producing to Lululemon
in the market.
The buyers in Lululemon have a very high bargaining power. This is because the customers
want to purchase products of higher quality and the same athletic apparel is at the stores of athletic
and also Adidas. The power of buyers in Lululemon has been noted to be high because there are
other brands which have the same products as Lululemon. This has led to reduced costs because
the same products are being offered by other brands at a lower price. The entry threat is also high
because the barriers to the new entrants are very few and also due to the open market structure in
Lululemon. There is a moderate of new entrants in athletic because the brands which are popular
all over the world are mainly for men. These brands include Adidas, Nike and also under armor
which are mainly specializing in aspects which are different from outdoor sports and basketball.
This has led to different identity as opposed to Lululemon.

LULUMON ATHLETICA

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Question 2: what do you see as the key success factors in the market for performance-based
yoga and fitness apparel?
The key success factors in the market for performance-based yoga and fitness apparel are
aware of the brand, current demand of the market adaptability, high quality and well-designed
products and efficient supply with multi-channel distribution. The degree of brand awareness is
very strong in Lululemon in regards to the market today. Therefore, the ability of Lululemon to
stay relevant in their customer's mind in order to continue its growth should be maintained because
there are more direct educated consumers which arise every time...


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