Lululemon Case Study

Topics: Clothing, Word of mouth, Marketing Pages: 3 (775 words) Published: October 9, 2012
1.
The industry that Lululemen operates in is the Women`s Apparel industry which is a mature, large and fragmented market that has highly sensitive to the economic conditions and trends. The PEST analysis shows a tax reducing police have been introduced along with an Economic Action Plan by government in January 2009 which can reduce tax burden and increase purchasing power. However, Canadian economy have been significantly affected by the world economic crisis occurred at 2008. On the anther hand, People have started to pay more and more attention on their health since high total cholesterol and triglycerides levels increase, and also, the introduction of women-oriented gyms has also increased the customer base by encouraging more women to partake in fitness. Moreover, the technologies of designing and manufactured apparel have been constantly improved. Lululemon`s fastest wicking fabric is primarily used in running gear for women and men which the moisture wicking is inherent in the fabric so will last for the life of the garment. The analysis from porter`s five forces shows:

Rivalry between established Competitors:
Few competitors lead to moderate to low strength of force.
The threat of entry:
New competitors like Lotuswear are springing up to capitalized on the street wear trend lead to moderate to high strength of force. Buyer and supplier power:
Large numbers of customers provide high strength of power, and the high volumes of suppliers also provide low strength of force. Competition from substitutes:
Generic clothing is easily accessible lead to moderate to low strength of force. Key factors analysis:
Lululemon's success is significantly contributed by grass-rooting marketing strategy. They have ambassadors to represent health lifestyle, and they constantly improve their product based on the feedback they get from local community members. The word-of-mouth strategy makes the customer making their purchase decision by the recommendations of...
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