Lululemon Case Study

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LULULEMON
CASE STUDY
FEBURARY 9, 2013

Question # 1
SWOT
Strengths: niche market leader, product technology, customer focused, quality, innovation, brand, corporate social responsibility, and sustainability Weaknesses: perceived female focus, Local centricity, price point, inventory, perceived as yoga only, distribution, and access to stores Opportunities: Product diversification, line expansion, accessories, leveraging perceived expertise, category leader, and expert Threats: Buyout, fad potential, low barriers to entry, competition, global economic state, and unfavourable exchange PEST

Political: childhood obesity, costs on healthcare, tax incentives for extra-curricular programs, healthier lifestyles and thinking, and leverage community programs Economical: CPI up over the years, increased unemployment rate and exchange rate Social: yoga users has grown as well as their household income Technical: Online shopping has increase and Canadians are more tech savvy Porter’s 5 Forces

Bargaining Power of Suppliers: is low since the supplier segment is quite disjointed and less focused than the clothing retail industry. There is lot of choice for supplier substitution and buyers typically embody a significant customer group. Threat of New Entrants: is low because of high hurdles of entry. The industry is categorized by large capital requests, access to distribution channels, large economies of scale and product distinction. New entrants will require spending a lot of time and money to come in to the market, increase cost advantage, and establish loyal customer base. Threat of Substitutes: is quite temperate since customers do not face great substituting cost when substitute products are lower in price, the quality performance capability of substitute products is not greater. Lululemon offset the appeal of substitute products by posing superior products with distinctive customer experience that is highly valued. Bargaining Power of Buyers: low because the...
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