The current paper is committed to the analysis of Lululemon athletica. When conducting this analysis, a conclusive situational analysis of the organization is made. To help analyze both the internal and external environments of the organization, its SWOT analysis is undertaken using the information presented in the case study. This then leads to the development of the problem statement, and available alternatives. The paper ends with a recommendation where the author suggests the best alternative as well as the best plan of implementation.
Headed by Chip Wilson, Lululemon athletica was founded in 1998 by a group of athletes. Since its inception as surf and skateboard brand Westbeach, Lululemon athletica which isVancouver-based has since become a giant retailing phenomenon in Canada. Its founder, Chip Wilson is a Vancouver-based manufacturer, distributor and retailer of high quality yoga apparel.
In four countries alone, the company has 57 stores and 1700 employees. This has made it be recognized as a few of the fastest growing apparel companies worldwide. Its success is owed to a drastic popularity of its yoga. Its dramatic popularity increase arose from its participation in yoga in Canada between 2001 and 2006. The company’s performance in the apparel industry has continued to rise with drastic increases in its participation in yoga by 136%. This has made it the number one trend in sport. The success has however been realized without giant spending in marketing as opposed to its industry peers.
Lululemon Athletica SWOT analysis, and Alternatives
Strengths
The company’s major strength is its outstanding yoga brand identity which has made it stand out as number one trend in sport. Also, the company has strength of producing superior high quality products to its customers. Its products have innovative features and style. Their product is made of anti-microbial wicking fabrics. Besides, its product has unique features. Its product is made using flat seams that on top make the product non-abrasive to the wearer. It also sells yoga-inspired apparel and accessories designed for both sexes. As well, it stands out as the only company that can make a lululemon athletic brand that easily incorporate itself in the users’ everyday lives as it is non-abrasive and can be used as a street wear by anyone.
Besides making unique and high quality products, the company also has lower costs of operating expenses. It does not incur huge marketing budgets. It instead incurs minimal costs of traditional advertising. The company has its costs lower than its industry peers as it has maintained its advertising costs lower. For instance, it chooses free community papers to announce its store openings. Its community engagement also stands out as some of its strengths.
The company has overqualified and trained staff. The staffs are recognized as being able to meet prospective educators and carry out consumer training. The marketing approach which is community centered is a major strength in that it helps in building brand awareness, creating good customer relationships as well engaging in activities which are philanthropic.
Also, it has outstanding target audience. It has constantly targeted broad audience. For example, even though its products are principally made for athletes, its products can be used for any activity by anyone as well for sweet wear. Lastly, its preference of selective outside retailers is strength. This has enabled the company have control and position itself better with regard to its premium pricing and a defined brand of premium message.
Weaknesses
The major weakness of the company is the slow growth in its strategy. This is as a result of lack of lack and only selling in own stores. The company also has a weakness of lack of mass marketing as it only uses traditional marketing techniques. It only uses word of mouth marketing It lacks clear control of mass marketing.
Basically, it does not carry out decentralized marketing. Besides, the company has fewer retails outlets. It only has 57 stores in four countries. Its retail strategy which is vertical in nature may as well be a weakness. Its production considerations are reduced to only fabrics. It has as well failed to occupy a larger potential larger market in the United States. Lastly, its product’s brand is weakly recognized in the United States. Its innovative styles may not be appealing for the United States athletes. It has smaller market focus. It does not for instance focus on U.S youths.
Opportunities
Lululemon Athletica has diverse opportunities which can help in increasing its revenue base. The company has an opportunity to sell its products in the United States market. It can radically penetrate the market and grow exponentially. With its grassroots marketing strategies, it is clear that it can successfully penetrate the United States market and thereby increase its market share.
The company also has an opportunity of targeting a new market segments, for example, targeting men. Besides, it has the prospect of heavily focusing on word of mouth as its marketing strategy as this easily translates into viral marketing which is very effective marketing tool. For instance, it should focus on penetrating new markets in Europe, Asia and Middle East as well.
The company also has an opportunity of conducting extensive research on how to better improve the quality of its products. It can as well focus its marketing strategies to the novice athletes, adults and seniors inclusive.
Threats
Lululemon Athletica’s major threat is resulting from the new market entrants. There is likelihood of stiff competition from companies like Lotuswear which aims at capitalizing on street wear trend. Also, there is threat resulting from maintaining the retail momentum. It is impossible to maintain momentum over the long term at retail level as predicted by industry experts. Lastly, there is possibility that its grassroots marketing strategies will wear thin soon. This may mean loss of potential customers and lose of market share in the stern challenge of poor economic conditions that may greatly hinder expansion at the international level.
Recommendation
The company should develop its e-commerce so that it increases its online presence and clientele base, preferably worldwide. It can also heavily capitalize on the ignorance of its customers. Consumers generally lack knowledge about other products and this forms a better opportunity to exploit fully its marketing strategies.
The best alternative thus is to penetrate the U.S.A’s market and satisfy the needs of the youth athlete, yoga females, men and children. Also, since its grassroots marketing strategies will wear thin soon, it is recommended that the company implement online viral marketing strategies besides the traditional marketing methods.
Work cited
The given case study.
