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Lululemon: SWOT ((Lululemon: Internal Strengths and Competitive…
Lululemon: SWOT
Lululemon: Internal Strengths and Competitive Capabilities
• Strong product quality relative to rivals in the industry they offer, “fashion forward performance gear that is functional”.
• They developed “Next Gen” and “Ivivva” fabrics and invested in R&D technologies to strengthen consumer satisfaction and showing consumers what high-tech fabrics can do.
• Strong global distribution relationship and capabilities
• Strong brand name and company image, they have a “distinct in-store shopping experience with strong ties to fitness instructors, local athletes, yoga instructors, and various community based organizations event outreach”.
• Good supply chain: North American manufacturing relationship help to provide the capability to speed select products to put to market and respond quickly to changing market trends and keep up with high buyer demand.
• Good online sales strategy (www.lululemon.com): high-end shopping customer service with color coordinated fitness sets each season.
• Strong Geographic growth and outreach 245 stores in America, 51 in Canada, 27 Australia, 9 in United Kingdom, 5 New Zealand, 3 in Asia…etc.
Lululemon: Potential Market Opportunities
• Expanding into more customer groups in cycling, running, gym apparel, shoes, sports gear and fitness gear for an everyday life style.
• Leveraging their R&D and intellectual properties and fabric patients to develop gear in other areas.
• Color blocking and designs that are new and specific that Lululemon creates.
• Strong geographic recognition and growth over that last 7 years with strong benchmarks
• Strong brand ambassadors with opportunities to grow into their new fitness clothing offerings.
• Expand the in-store experience with customers
Lululemon: Potential External Threats
• New companies coming on into the market: Fabletics (backed by Kate Hudson) with a direct to customer monthly subscription based model.
• Existing Companies expanding into the market space: Nike, GAP, Athleta, Nordstrom’s Fitness brands, Old Navy
• Growing research from larger companies is expanding to create the best performance fabrics to create value for customers and keep them dry and comfortable in various conditions.
• Designer trends: staying on top of “what’s hot” staying “on-trend” with colors and designs that appeal to consumers
• Larger companies are driving down the cost of performance gear making value essential to keep customer base
• Need to increase offerings to offer more sizes so that more people can wear and access the brand and buy the products
Lululemon: Internal Weakness and Competitive Deficiencies
• Higher overall unit cost ($120 per fitness outfit) relative to key competitors ( 5-20% decrease in pricing).
• Lack of management depth: Revolving door of directors and leadership. Turnover and issues with leadership in R&D and design innovation teams have impacted profits. (A new sheer fabric was released this lead to loss of customers and quality/value went down)
• Too narrow of a product line, competitors like Nike, Under Armor, Fabletics, Nordstrom’s, Athleta, Gap, Adidas have large product line offerings and offer more sports related gear.
• Only offering clothing sized for people sized 0-12 (there was no inventory for XL, 2X, plus size options: Athleta has taken this market opportunity and run with it being more “inclusive of all”)
• Competing with titans in the fitness industry with major competition. Have to keep boutique style shopping strategy to create an ROI for customers.
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