Business Strategy Case Study: Lululemon Inc.

Lululemon Athletica Inc. was founded in Vancouver, BC (Lululemon Athletic Inc., 2016). The company designs, distributes, and sells athletic apparel for women and men (Lululemon Athletic Inc., 2016). At their January 31, 2016 fiscal year end, Lululemon earned $2.06 billion in revenue, which was a fifteen percent increase from the prior fiscal year end (Lululemon Athletic Inc., 2016). Lululemon operates 363 retail stores worldwide with locations in Canada, the United States, Australia, New Zealand, the United Kingdom, Singapore, Hong Kong, Germany, and Puerto Rico (Lululemon Athletic Inc., 2016). Of these stores, 61 were opened during the January 31, 2016 fiscal year end (Lululemon Athletic Inc., 2016). The company has plans of further expansion in the future. Lululemon enters new markets by setting up temporary stores called showrooms (Strauss, 2014). The showrooms are used to test the market to see if it will be suitable for a retail store (Strauss, 2014). This saves the company the larger investment of opening a retail store
This choice in hiring benefits the company in several ways. Local experts have a better understanding of the country and the culture in which the business will operate. Ethnocentricity problems are avoided because the individuals hired are culturally literate. Business relations in the international country remain strong because the individuals representing the company are accustomed to appropriate behaviours and communication in the workplace. Lululemon has proven to be quite successful at their international business entry. The company plans to further expand their international stores. During 2016, Lululemon is launching 11 new international stores (Goodman, 2016). By 2020, the company plans for their international sector to account for 20 per cent to 25 per cent of their business (Goodman,