Business Case Study: Lululemon

Overview
It’s not a surprise when the Lululemon Athletica’s founder Chip Wilson got his inspiration from a commercial yoga class he took in Vancouver. Having past experience in surfing, skating and snowboarding business, Chip figured out that the experience of post- yoga rush is somewhat familiar to that of surfing and snowboarding, and believed yoga would become popular again. At that time, yoga practicers performed excercises in cotton clothing and it was proven not to be suitable as the fabric did not remove sweat and allow for highest flexibility. Having experience and passion in athletic fabric, Chip took feedback from yoga instructors to develop his apparel. In November 2000, Lululemon opened its first store in a beach area in Vancouver
However, Lululemon believes they can get its merchandise from other suppliers in case of any discooperation, just with a higher cost.

Threats of substitute products

Although the replications can not compete with the high quality of Lululemon’s apparel, there are other brands whose products would be suitable for active users, therefore, the threat of alternative products is high. However, Lululemon still gets the upper hand as the quality of materials used by its rivals does not meet up to the customers’ expectation, so the probability of switching to a lower quality product is not likely.

Rivalry among existing competitors

As there are many other successful sport apparel brands in the market like Nike, Addidas and Under Armor, Lululemon has to face with high competition. Moreover, the rivals have access to an enormous amount of resources compared to Lululemon as they have been established long before the company, and have obtained many advantages such as financial capabilities, larger and broader customer ranges, stronger brand name and more intensive retail chain
What does your strategic group map of the performance sports apparel industry look like? Is lululemon well positioned? Why or why not?

Although facing with many challenges, Lululemon has adopted a current strategy that assure its position as one the major factor in the athletic apparel market. To achieve what is regconized today, Lululemon has shifted among many different strategies to figure out the suitable one. These are the factors in Lululemon’s strategies:
- Lululemon diffrentiates them from other competitors in terms of marketing its products, and the method is called grssroot marketing. This approach targets a small audience with hope of spreading the message to a larger audience, and is considered to have effective results with only low costs.
- A vertical strategy is applied, which means the products would only be sold through its own stores and authorized yoga workshops. By this strategy, store employees are also allowed to interact with customers individually to fulfill their needs and meet up with them on developed products.
- Lululemon has witnessed its rapid growth since established and intends to increase its market shares by expanding to other geographical locations and offering more innovative products more