Lululemon:

Turning Lemons into Lemonade

By:
Joey De Villa
Collins Nacino
Kristelle Yabut
Katrina Solitario

BUS 121
Dr. Andres Ignacio San Mateo Jr.
 About Lululemon
• Founded in Vancouver, Canada in 1998, it is
an athletic apparel company intended for
individuals with active lifestyle
• Designer and retailer of high end yoga and
athletic apparel
 About Lululemon
• It is based in Vancouver, British Columbia,
Canada and operates its clothing stores in
numerous countries throughout the world.
• Targeting upper and upper middle classes, mostly
women with health and yoga lifestyle awareness
 About Lululemon
• Operates more than 350 stores
• USA
• Canada
• Australia
• New Zealand
• Singapore
 About Lululemon
• Main competitors:
• Nike
• Adidas
• Under Armor
• Athleta
• New Balance
 About Lululemon
• MISSION
“Creating components for people to live longer,
healthier, more fun lives”
 About Lululemon
• VISION
“Elevating the world from mediocrity to greatness.”
 About Lululemon
• MANIFESTO
About Lululemon
Identify the Stakeholders and Get the Facts

• Dennis “Chip” Wilson

- Founder of Lululemon in
1998 at Vancouver, British
Columbia, Canada
Identify the Stakeholders and Get the Facts

• Christine Day
- Former CEO (2008-2013)
Identify the Stakeholders and Get the Facts

• Laurent Potdevin
- CEO from 2014 to 2018
Identify the Stakeholders and Get the Facts

• Customers
- Active young-thinking women
- “fit” moms
Identify the Stakeholders and Get the Facts

• Employees
- With Type A
personalities, or those
with more competitive
personalities
 Define the Problem
• Damaged Reputation due to Controversies
- MISLEADING ADVERTISING
-VitaSea Products, made from “seaweed”
-The New York Times released an article claiming that the products are
tested and could not find seaweed fiber in the product.
-Competition Bureau of Canada ordered Lululemon to remove health
benefits labeling
 Define the Problem
- CONTROVERSIAL
STATEMENTS BY
FOUNDER DENNIS
“CHIP” WILSON
- “Who is John Galt?”
 Define the Problem
- CONTROVERSIAL STATEMENTS BY
FOUNDER DENNIS “CHIP” WILSON
- He admitted to having chosen the company
name because “it’s funny to watch (Japanese) say
it”
 Define the Problem
- CONTROVERSIAL STATEMENTS BY
FOUNDER DENNIS “CHIP” WILSON
- Blog about the rise in divorce rates and breast cancer
among women
- "fat shaming" which led to much criticism
among feminist blogs
 Define the Problem
- CONTROVERSIAL STATEMENTS BY
FOUNDER DENNIS “CHIP” WILSON
- “third world children should be allowed to work
in factories because it provides them with much-
needed wages”
 Define the Problem
- PRODUCT QUALITY ISSUES
- March 2013
- clothing being poor quality with some items
being "too sheer,"
 Define the Problem
- PRODUCT QUALITY ISSUES
- December 2010
- lululemon recalled some of the store's reusable
bags that were made in
China from polypropylene
 Define the Problem
- LULULEMON MURDER
- March 2011
- An employee was brutally murdered by her co-
worker.
 Define the Problem
- CUSTOMER PRIVACY
- Listening to customers as they shop in the store
- Employees are trained to eavesdrop on their
customers
Identify and Evaluate Alternatives
Alternative 1:
Promoting the brand through positive
advertising
 Identify and Evaluate Alternatives
Promoting the brand through positive advertising
• Pros: • Cons:
- To redeem company’s - Additional cost
reputation
- Re branding efforts
- Revenue and customer
base will increase
- Can build brand loyalty
Identify and Evaluate Alternatives
Alternative 2:
Quality Control
 Identify and Evaluate Alternatives
Quality Control
• Pros: • Cons:
- Establishing good reputation
to the customers - Needing more manpower
- Customer satisfaction - Overhead cost for
- Employee efficiency and reprocessing rejected
productivity products
Identify and Evaluate Alternatives
Alternative 3:
Gather Feedback and solicit opinions
through survey
 Identify and Evaluate Alternatives
Gather Feedback and solicit opinions through survey
• Pros: • Cons:
- Cost-efficient
- Speedy results
- Respondents anonymity
- Will create strategies and
to follow trends
- Respondents may not be
truthful with their
answers
- Limited respondent
availability
- Skipped questions
Identify and Evaluate Alternatives
Alternative 4:
Company owned company operated
 Identify and Evaluate Alternatives
Company owned company operated
• Pros: • Cons:
- Centralized decision - Limited
making communication
- Reduce conflict - Inflexibility of retail
- Control and operations
accountability
- Fast execution
Identify and Evaluate Alternatives
Alternative 5:
Yoga Apparel for plus size active people
 Identify and Evaluate Alternatives
Yoga Apparel for plus size active people
• Pros: • Cons:
- New demographic of - Current customers may
customers be dissatisfied
- Increase in revenue - Can affect brand image
- Small investment is required of the product
- Higher probability of plus - Change of layout
size women
 Make a Decision
• Lululemon shall come up with action plans to
remarket the company as a whole and to set
corporate governance within the company. This
would cause/invite new customers to come in and
old/current customers to feel better about coming
back with improved branding and product quality
 Make a Decision
• Come up with a concrete marketing strategies in
terms of representing the company to the markets,
competitors and belonged industries thus
eliminating the issues on false advertisements and
misrepresentation
 Make a Decision
• To live up with the company’s ultimate goal of
transforming mediocrity to greatness through
organizational capability, product quality and
diversity and positive market share, thus lemon to
lemonade
 Make a Decision
• Top management should create ethical standards
across the organization down to retail operations.
This will promote efficiency and quality of work
and at the same time uplifting the morale of the
employees by eradicating conflict
 Implementation Plan of the Decision
• To create new positive advertising, involving models of
all ethnicity and sizes.
• Monitoring ethical behavior and productivity to start in
individual stores (branch)
• To have rules and regulations written down for all
employees to look at before hiring.
 Implementation Plan of the Decision
• Core values is important to set for the company to
look back and rely on.
• To hire quality inspectors that clearly understands
and comply with company’s standard
 Method of Evaluation
• Individualist Theory
- a business is acting within standards when it makes
profit for its stockholders, but also respecting human
rights.
 Method of Evaluation
• Utilitarianism
- an action is deemed ethical if it promotes all around
happiness to all parties affected.
 Method of Evaluation
• Kantianism
- is based on four basic principles
1. to act rationally
2. to allow people to help to make rational decisions
3. to respect people, respect their autonomy and individual needs.
4. be motivated by goodwill, seeking to do what is right because it is right
 Method of Evaluation
• Systemic Issues
- It's
an issue, problem or change in company policy or
practice that affects, or has the potential to affect, a number
of customers.
THE END