Lululemon's Market Position and Competitive Analysis in 2020

See part 3 for my sec/on 15 answers Lululemon Athletica, Inc., in 2020: Is the Recent Growth in Retail Stores, Revenues, and Profitability Sustainable? Review the strategic group map of this industry, as shown in Figure 1 below. Is lululemon well posi=oned? Why or why not? Lululemon is well posi/oned on the map because its product offerings and distribu/on channel strategy are dis/nct from those of its key rivals. YES Correct Lululemon and Athleta are the only two designer-marketers of performance-based yoga and fitness apparel who sell their products exclusively through their own chain of company-owned retail stores and company-operated websites. YES Correct Lululemon has a rela/vely weak brand-image/reputa/on–one that is weaker than Nike, adidas, and Under Armour. NO Correct Lululemon’s product line and retail presence (e.g., in terms of outlets around the globe) is rela/vely narrow as compared to Nike, adidas, and Under Armour. YES Correct Under Armour has a narrow breadth of product offerings and only sells through company- owned retail stores and the company website. NO Correct Nike and Adidas have a narrow breadth of product offerings. NO Correct

See part 3 for my sec/on 15 answers Other less well-known designers sell exclusively through their own company-operated websites. NO Correct What do you see as the key success factors in the market for performance-based yoga and fitness apparel? Compe/tors will have to stay on the cuNng edge in using high-tech moisture-wicking performance fabrics that are of good quality, that are comfortable to wear, and that have appealing, fashionable, and stylish designs. YES Correct Strong distribu/on capabili/es include having a chain of company-owned retail stores or selling through independent retailers at thousands of store loca/ons or being able to aPract buyers to the company’s website or some combina/on of these. YES Correct Capabili/es in building and maintaining a strong brand image and reputa/on is important to brand-conscious and brand-loyal buyers. YES Correct Capabili/es to increase domes/c coverage before expanding globally. NO Correct Capabili/es to build strong distribu/on channels and focus in the United States only. NO Correct Strong design capabili/es to diversify into different sports. NO Correct Focus on growing ecommerce plaRorm and close brick and mortar stores. NO Correct

See part 3 for my sec/on 15 answers Which of the following accurately characterize lululemon’s resource strengths and compe==ve capabili=es? The company’s lineup of stylish, premium-priced yoga and fitness apparel that offers performance, fit, and comfort. YES Correct Lululemon’s focus on marke/ng to women only. NO Correct Using showroom stores to enter geographic markets where lululemon does not have a market presence. YES Correct A growing chain of lululemon retail outlets outside Canada and the U.S. and the high sales per square-foot being generated at many/most of these stores. YES Correct A focus on growing domes/cally first before becoming a global company. NO Correct Proven retail merchandising skills and store opera/ons capabili/es in effec/vely merchandising lululemon apparel at its retail stores and achieving high sales per square foot of store space. YES Correct The company’s success in recrui/ng local yoga and fitness instructors as ambassadors for lululemon’s products adds authen/city and credibility to the lululemon name. YES Correct High and rising average annual sales at corporate-owned stores open at least one full year. YES Correct

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See part 3 for my sec/on 15 answers Strong geographic coverage. NO Correct Extensive product line breadth than the compe//on. NO Correct Which of the following accurately characterize lululemon’s resource weaknesses and compe==ve liabili=es? Weaker geographic coverage than key rivals in performance-based sports apparel—namely Nike, adidas, and Under Armour. YES Correct Product line breadth remains significantly smaller than global market leaders Nike and adidas— lululemon’s main strength is in yoga and fitness apparel for women. YES Correct Lululemon’s offerings in sports apparel and leisure/casual wear for women, men, and youth are comparable to Nike, Adidas, and Under Armour. NO Correct Weak retail merchandising skills and store opera/ons capabili/es. NO Correct Slow growth in direct-to-consumer sales (e-commerce) via the company’s website. NO Correct Poor leadership that has delivered unimpressive financial and opera/ng results. NO Correct Which of the following accurately characterize lululemon’s market opportuni=es?

See part 3 for my sec/on 15 answers Opening lululemon athle/ca stores in more geographic areas and in more countries. YES Correct Acquiring a much larger and well-known sports apparel retailer. NO Correct Growing sales at the company’s website. YES Correct Perhaps expand lululemon’s product offering to include larger sizes for women and men. YES Correct Buy out Athleta brand from GAP. NO Correct Slow down growth due to uncertainty. NO Correct Adopt an unrelated diversifica/on strategy. NO Correct Which of the following represent external threats to lululemon’s future well- being? The COVID-19 pandemic extends into 2021 and perhaps part of 2022, thereby limi/ng shopper traﬃc in lululemon’s stores. YES Correct More women begin to view other brands (par/cularly Athleta) as good subs/tutes for lululemon’s products. YES Correct

See part 3 for my sec/on 15 answers The supply side of the performance sports apparel market becomes increasingly crowded because more department store chains and other large apparel retail chains introduce their own private-label performance sports apparel for both women and men at lower price points. YES Correct A hos/le takeover from a larger well-known store chain or maker of performance apparel. NO Correct Gap-Athleta con/nues to expand domes/cally and its growing number of store loca/ons begin to cut into lululemon’s market share in the women’s segment for performance sports apparel. YES Correct Poor leadership and unethical decision-making. NO Correct Forced closures due to a crisis. NO Correct Tarnished brand image reputa/on. NO Correct Considering all four SWOT lists, which of the following accurately characterize the aJrac=veness of lululemon’s overall situa=on? Lululemon gives every indica/on of being an up-and-coming company with potent resource strengths that are producing gains in sales and good profitability. YES Correct Lululemon has a differen/ated product offering that enables it to command premium prices for its product offering and earn healthy profit margins. YES Correct

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See part 3 for my sec/on 15 answers Lululemon will likely not face compe//ve pressures in the years ahead, especially because of its differen/ated products. NO Correct Lululemon’s market opportuni/es, coupled with its resource strengths and compe//ve assets, appear potent enough for the company to con/nue to be compe//vely successful and grow its sales and profits for at least the next 2–5 years. YES Correct Lululemon does not possess the resource strengths to compete against Athleta. NO Correct Lululemon’s tarnished brand reputa/on has not allowed the company to recover and grow its customer base. NO Correct Lululemon will need to differen/ate its products to compete against Athleta. NO Correct What are the primary components of lululemon’s value chain? Lululemon’s primary value chain components include its product design and styling, supply chain management, retail store and website opera/ons, and marke/ng and brand building. YES Correct Lululemon’s primary value chain components include its retail store and website opera/ons, and marke/ng and brand building. NO Correct Lululemon’s primary value chain components include its product design and styling, supply chain management, and warehousing and transporta/on. NO Correct

See part 3 for my sec/on 15 answers Lululemon’s primary value chain components include its raw materials, product design and styling, and warehousing and transporta/on. NO Correct Lululemon’s primary value chain components include its supply chain management and website opera/ons. NO Correct See part 3 for my sec/on 15 answers

Lululemon in 2020 part 2 (my answers)

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