Lululemon
If you invested in Lululemon in 2007 at $2 share, your investment would have more than
quadrupled. The shares have since risen to as high as $81, and investors are still optimistic
about the companys future. The Canadian athletic clothing retailer has a lot to be proud
of. What started off as a humble Vancouver company in 1998 has risen to a billion-dollar
multinational with over 200 stores across North America, Europe, and Asia. 28
Lululemon athletica has been called the Nike for Women. 29 In an already competitive
sports retail market, how did this small yoga company rise to such greatness?
Two Canadian marketing academics agree that Lululemon offers something unique: a
high-quality product for yoga enthusiasts.
Lots of people can make a good product, but this is [a] product really specially
designed for stretch, fabric, and the age of people who do yoga, explained Alan Middleton,
marketing professor at York Universitys Schulich School of Business.
According to Michael Mulvey, University of Ottawa marketing professor, Lululemons
product is known for its superior design and high quality. Mulvey also credits its sales staff,
called educators, for their focus on the customer. Mulvey explained that its customer service
is superior and appeals to the target market. Since Lululemon is not selling an undifferentiated
product to the mass market, it is not a traditional mass-market retailer. 31
Beyond a quality product, interest in the company has grown through the use of social
media. The yoga community is a well-connected demographic, says Mulvey. In where
they put stores, in how they linked into local yoga clubs where their stores were . . . and
them being engaged in the whole promotion of yoga, he explained. Theyve got a very
nice niche.
Clearly, strong community ties have resulted in less advertising costs. We dont do
ads, says Nina Gardner, Lululemons community relations manager. All of our marketing
is done word-of-mouth and grassroots. The only place youll see ads is in Yoga Journal
and Runners World , two national publications. 33
Lululemon, of course, is not just selling yoga clothes, its also selling a lifestyle.
You can it see in its stores and its slogans. On a typical Saturday afternoon, its employees
are busy helping customers and community building. According to Timothy Taylor
of the Globe and Mail , in stores youll see a unique shopping experience. Taylor explains
that customers, mostly women, are called guests, ranging in age from young teenagers
to senior citizens. In fact, it is not just about yoga pants. The youthful staff are
modelling wraps and toques and advertising product features, and customers are comparing
fabrics.
CEO Christine Day argues that yoga isnt just an exercise. It represents a broader trend
to take better care of yourself and live a healthier lifestyle. According to Day, Lululemon
is part of, and contributing to a bigger macro-trend that affects consumers from their
early teens to their 70s. Investing in your health will pay big dividends for individuals and
society . . . elevating the world from mediocrity to greatness.
Part of this lifestyle is also seen in its slogans such as Friends are more important
than money and Dance, sing, floss and travel.
Strategically, the company has also done something else differently. The company
uses a scarcity model, keeping inventory supplies low. According to Day, this creates
fanatical shoppers who return frequently to the store. 36 Few sales are offered, which means
customers must buy products at regular price. Typically, yoga pants range from $75 to
$128, when similar products can be found at Old Navy or the Gap for under $30.
The companys reputation for quality and authenticity is one of the reasons customers
keep coming back. Marina Strauss of the Globe and Mail refers to the clothes as aesthetically pleasing, functionaland pricier. Day calls it the Apple Model. The
company keeps improving its clothing features and fabrics, and customers show their
appreciation through their ongoing loyalty.
Clearly, Lululemon is focused on its customers and their love of yoga. In recent years,
this ancient Hindu custom has become a popular trend in Canada and around the world.
Indeed, the practice of yoga is on the rise. The number of people that engage in some form
of yoga has risen to over 20 million in the United States alone. It is evident that Lululemon
has been able to appeal to this growing market.
Certainly, the value and popularity of the brand is growing. In 2012, the company
was ranked the 7th most popular Canadian brand by Interbrand in its biannual Best
Canadian Brands report.
The company is also unique in how it treats its employees. Often referred to as
educators, Lululemon employees receive special training to ensure professional quality
service for their customers. After their first employment anniversary, staff
receive a learning library that includes books such as The Seven Habits of Highly
Effective People , The Phoenix Seminar: Psychology of Achievement , and Landmark Forum
Seminars.
Whats next for Lululemon? The company has started to expand into traditional
apparel as well as swim and surf clothes to appeal to a larger customer base. In fact, in
2013 Lululemon decided to develop a mens clothing line to appeal to both runners and
male yogis. They have moved from being strictly yoga to a lot of running stuff, which
sort of broadens the appeal, says consultant Maureen Atkinson. From the point of view
of men, it becomes more acceptable to be in a store that focuses on running instead of
(just) yoga.
Retail consultant Howard Davidowitz agrees. Yoga is recognized not only by women,
Davidowitz said. If you call health clubs, more men are attending yoga classes. Men are
going to show up with their wives and their girlfriends to shop now. [Id] say 90 percent of
their business is womens wear. If they can add 10 percent for men . . . I look at it as a very
strong market for them.
The greater challenge is keeping the companys aura of virtue and specialness
while appealing to the mass population. After all, investors are demanding growth. 42
According to David Ian Gray, a retail strategist, the specialness of a brand is hard to
sustain when you see it on every street corner or, in this case, on every other woman in
your yoga class or in the elementary school playground when you pick up your kids. That
sense of being part of a haloed community starts to dissipate when the group has grown so
big that it encompasses almost everybodywhich is exactly what happened mid-90s to
the Gap, or mid-2000s to Starbucks.
Has Lululemon made any mistakes? Some analysts believe the yoga giant could have
made even greater sales if it was better at matching supply with demand. The question is,
can Lululemon now expand beyond yoga wear and be successful with aiming its products
at the mass market? Many say, why not? Is this a powerhouse company? My answer is
yes, Davidowitz said. Will it be five years from now? Yes, because theyre so dominant
and so recognizable. Theyve established themselves as the headquarters for yoga wear in
the United States.
Certainly, other retailers have tried to tap into the yoga market. Under Armour, Nike,
Adidas, Victorias Secret, and American Eagle are a few companies that have sold yoga
wear. But so far, they havent captured Lululemons market share. It seems that Lululemon
is doing something special; and for now, its going to keep on doing it.
There is a saying: Do what you love, and the money will comefor Lululemon, its
the love of yoga.
Questions
1. Analyze the yoga clothing industry using Michael Porters five-forces model.
2. Conduct a VRIO analysis of Lululemon.
3. Discuss which of the three kinds of business-level strategies you think Lululemon is
employing or should employ.
· ### If you need textbook , I also uploaded the textbook.
IMPORTANT: Need a report on the questions with Citations along with the link(URL is necessary)
· 2-3 sources for each question
· Need a good report
· Explain the answers for the question precisely.
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Lululemon
If you invested in Lululemon in 2007 at $2 share, your investment would have more than
quadrupled. The shares have since risen to as high as $81, and investors are still optimistic
about the companys future. The Canadian athletic clothing retailer has a lot to be proud
of. What started off as a humble Vancouver company in 1998 has risen to a billion-dollar
multinational with over 200 stores across North America, Europe, and Asia. 28
Lululemon athletica has been called the Nike for Women. 29 In an already competitive
sports retail market, how did this small yoga company rise to such greatness?
Two Canadian marketing academics agree that Lululemon offers something unique: a
high-quality product for yoga enthusiasts.
Lots of people can make a good product, but this is [a] product really specially
designed for stretch, fabric, and the age of people who do yoga, explained Alan Middleton,
marketing professor at York Universitys Schulich School of Business.
According to Michael Mulvey, University of Ottawa marketing professor, Lululemons
product is known for its superior design and high quality. Mulvey also credits its sales staff,
called educators, for their focus on the customer. Mulvey explained that its customer service
is superior and appeals to the target market. Since Lululemon is not selling an undifferentiated
product to the mass market, it is not a traditional mass-market retailer. 31
Beyond a quality product, interest in the company has grown through the use of social
media. The yoga community is a well-connected demographic, says Mulvey. In where
they put stores, in how they linked into local yoga clubs where their stores were . . . and
them being engaged in the whole promotion of yoga, he explained. Theyve got a very
nice niche.
Clearly, strong community ties have resulted in less advertising costs. We dont do
ads, says Nina Gardner, Lululemons community relations manager. All of our marketing
is done word-of-mouth and grassroots. The only place youll see ads is in Yoga Journal
and Runners World , two national publications. 33
Lululemon, of course, is not just selling yoga clothes, its also selling a lifestyle.
You can it see in its stores and its slogans. On a typical Saturday afternoon, its employees
are busy helping customers and community building. According to Timothy Taylor
of the Globe and Mail , in stores youll see a unique shopping experience. Taylor explains
that customers, mostly women, are called guests, ranging in age from young teenagers
to senior citizens. In fact, it is not just about yoga pants. The youthful staff are
modelling wraps and toques and advertising product features, and customers are comparing
fabrics.
CEO Christine Day argues that yoga isnt just an exercise. It represents a broader trend
to take better care of yourself and live a healthier lifestyle. According to Day, Lululemon
is part of, and contributing to a bigger macro-trend that affects consumers from their
early teens to their 70s. Investing in your health will pay big dividends for individuals and
society . . . elevating the world from mediocrity to greatness.
Part of this lifestyle is also seen in its slogans such as Friends are more important
than money and Dance, sing, floss and travel.
Strategically, the company has also done something else differently. The company
uses a scarcity model, keeping inventory supplies low. According to Day, this creates
fanatical shoppers who return frequently to the store. 36 Few sales are offered, which means
customers must buy products at regular price. Typically, yoga pants range from $75 to
$128, when similar products can be found at Old Navy or the Gap for under $30.
The companys reputation for quality and authenticity is one of the reasons customers
keep coming back. Marina Strauss of the Globe and Mail refers to the clothes as aesthetically pleasing, functionaland pricier. Day calls it the Apple Model. The
company keeps improving its clothing features and fabrics, and customers show their
appreciation through their ongoing loyalty.
Clearly, Lululemon is focused on its customers and their love of yoga. In recent years,
this ancient Hindu custom has become a popular trend in Canada and around the world.
Indeed, the practice of yoga is on the rise. The number of people that engage in some form
of yoga has risen to over 20 million in the United States alone. It is evident that Lululemon
has been able to appeal to this growing market.
Certainly, the value and popularity of the brand is growing. In 2012, the company
was ranked the 7th most popular Canadian brand by Interbrand in its biannual Best
Canadian Brands report.
The company is also unique in how it treats its employees. Often referred to as
educators, Lululemon employees receive special training to ensure professional quality
service for their customers. After their first employment anniversary, staff
receive a learning library that includes books such as The Seven Habits of Highly
Effective People , The Phoenix Seminar: Psychology of Achievement , and Landmark Forum
Seminars.
Whats next for Lululemon? The company has started to expand into traditional
apparel as well as swim and surf clothes to appeal to a larger customer base. In fact, in
2013 Lululemon decided to develop a mens clothing line to appeal to both runners and
male yogis. They have moved from being strictly yoga to a lot of running stuff, which
sort of broadens the appeal, says consultant Maureen Atkinson. From the point of view
of men, it becomes more acceptable to be in a store that focuses on running instead of
(just) yoga.
Retail consultant Howard Davidowitz agrees. Yoga is recognized not only by women,
Davidowitz said. If you call health clubs, more men are attending yoga classes. Men are
going to show up with their wives and their girlfriends to shop now. [Id] say 90 percent of
their business is womens wear. If they can add 10 percent for men . . . I look at it as a very
strong market for them.
The greater challenge is keeping the companys aura of virtue and specialness
while appealing to the mass population. After all, investors are demanding growth. 42
According to David Ian Gray, a retail strategist, the specialness of a brand is hard to
sustain when you see it on every street corner or, in this case, on every other woman in
your yoga class or in the elementary school playground when you pick up your kids. That
sense of being part of a haloed community starts to dissipate when the group has grown so
big that it encompasses almost everybodywhich is exactly what happened mid-90s to
the Gap, or mid-2000s to Starbucks.
Has Lululemon made any mistakes? Some analysts believe the yoga giant could have
made even greater sales if it was better at matching supply with demand. The question is,
can Lululemon now expand beyond yoga wear and be successful with aiming its products
at the mass market? Many say, why not? Is this a powerhouse company? My answer is
yes, Davidowitz said. Will it be five years from now? Yes, because theyre so dominant
and so recognizable. Theyve established themselves as the headquarters for yoga wear in
the United States.
Certainly, other retailers have tried to tap into the yoga market. Under Armour, Nike,
Adidas, Victorias Secret, and American Eagle are a few companies that have sold yoga
wear. But so far, they havent captured Lululemons market share. It seems that Lululemon
is doing something special; and for now, its going to keep on doing it.
There is a saying: Do what you love, and the money will comefor Lululemon, its
the love of yoga.
Questions
1. Analyze the yoga clothing industry using Michael Porters five-forces model.
2. Conduct a VRIO analysis of Lululemon.
3. Discuss which of the three kinds of business-level strategies you think Lululemon is
employing or should employ.
· ### If you need textbook , I also uploaded the textbook.
IMPORTANT: Need a report on the questions with Citations along with the link(URL is necessary)
· 2-3 sources for each question
· Need a good report
· Explain the answers for the question precisely.
Applied Sciences
Architecture and Design
Biology
Business & Finance
Chemistry
Computer Science
Geography
Geology
Education
Engineering
English
Environmental science
Spanish
Government
History
Human Resource Management
Information Systems
Law
Literature
Mathematics
Nursing
Physics
Political Science
Psychology
Reading
Science
Social Science
Home
Blog
Archive
Essay
Reviews
Contact
google+twitterfacebook
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