Malika Seidova 14669 BIS

Nadhirah Mohd Nasir 15063 BIS

Juan Andres M. Elonga 13971 ICT


Lecturer: Mr. Abu Baker Sedek b. Abd Jamak
GCB 3103/GBB 3103 STRATEGIC MANAGEMENT
April 16, 2014
lululemon athletica inc.
Introduction
Background
Vision, Mission & Objectives
Problem statement
Internal Analysis
SWOT
External Analysis
PEST Analysis
5 Forces Model
5 Generic Competitive Strategies
International Strategies
Corporate-level Strategies
Employee management &
motivation
Strategic Issues / Problems
Recommendations

Company History
Founded in 1998 in Vancouver by Chip
Wilson.
The company designs and produces more
appropriate yoga apparel products.
The 1
st
store was opened in Kitsilano in
year 2000.
The store was meant to be a community
hub where people learn and discuss the
physical aspects of healthy living from
yoga.
Target all ages, primarily active men and
women: Individuals that work, play and
share the vision of creating healthier,
happier and more fun lives.

Company History Cont
Vision: Elevating the world from
mediocrity to greatness and become
the number one women's athletic
apparel brand.
Mission: Creating components for
people to live a longer, healthier, more
fun life. providing a community with a
wellness in each of its stores.
Objectives: To train their people so
well that they could in positively
influence their families, communities
and the people walking into their
stores. And to increase the number of
male customer through the existing
ones.

Internal Analysis: SWOT
External Analysis: PEST
POLITICAL
Tax Incentives
Protecting product from imitation
ECONOMIC
Consumers are price sensitive
SOCIAL
Trend towards health consciousness
Expectation of sale environmental standards
TECHNOLOGY
Increase in market reach due to internet
capabilities
Technologically advanced textiles
External Analysis Cont Five Competitive Forces
Rival Among
Existing Firms
Strong
Threat of
Substitute
Products
Weak to
Moderate

Bargaining Power
of Buyers
Strong

Threat of New
Entrants
Weak to
Moderate

Bargaining Power
of Suppliers
Strong
Companys five generic competitive strategies
Pursues a strategy of focused differentiation, concentrating on a
consumer segment concerned with health and fitness
The business strategy is to brand the company as conducive to a
particular way of living by offering free yoga classes to employees
and customers, creating an ambassador program, and emphasizing
the sustainability of their operations.
Companys five generic competitive strategies
Strategic sales programs partnering with yoga and fitness facilities in
order to feature Lululemon yoga equipment and apparel in studios
Companys five generic competitive strategies
Lululemon uses both backward vertical integration and forward vertical
integration
Has never pursued a horizontal integration strategy; they are a vertically
integrated retailer involved in design, marketing, distribution and retail
stages of the value chain
Also vertically integrated in their e-commerce business
Companys five generic competitive strategies
Production is the only activity that is outsourced to low cost
countries
49 % - in China
41% - in South East Asia
3% - in Canada
Remainder in US, Peru, Egypt
International Strategies
Company follows a Global strategy for their international business
Has stores in North America, Australia and New Zealand, with
showrooms carrying key styles in North America, Europe and Asia
Company utilizes the overarching themes of fitness and positivity to
reach customers in regions, rather than tailoring the approach for
local markets
Corporate-Level Strategies
Limited level of diversification in products
Business is based upon production and sale of both fitness apparel
and equipment for yoga and Pilates
Employee management and motivation
Lululemon has created a new program called "Fund a Goal," which
was designed to eventually pay for high-performing employees to
achieve one of the goals on their list.
All of Lululemon's employees are given opportunities to attend
fitness classes at local gyms in the area
Strategic Issues
Low quality products
Yoga pants were too
sheer & see through
Have to recall 17% of
their products from the
market
New yoga pants still
sheer & they are pilling
after a few wear
Image problems
Popular CEO
announced decision to
step down
Negative comment
from founder regarding
customers body size
He mentioned that the
big size customers
should not wear their
products
Strategic Issues & Recommendations
Narrow focus
Focusing on
women only
Products size are
up to UK 16 only
(XL)

Missing out on
major markets
Focusing mainly
in Canada, NZ,
Australia & US
only
Less physical
store in other
countries
Recommendations
Low quality products
Do not be too
dependent on third
parties producer &
manufacturer
Focus on quality control
Do proper product
testing
Build good relationship
with fabric supplier
Image problems
Portray good image
Give discounts to
customers to attract
them
Remind employees and
top management to
serve customers
properly
Do not give negative
comments to customers
Recommendations
Narrow focus
Do more
promotions on
men's attire & other
products
Produce more sizes
of products
Expand product line

Missing out on major
markets
Do market research
on other countries
Expand to Asia,
Europe and others
Open more physical
stores rather than
having online
business only