Lululemon Case Study Essay Sample

Lululemon is one of the Canada’s best retail merchants of proficient athletic yoga dress. Lululemon’s yoga inspired dress is marketed under the two trade name names Lululemon Athletica for more mature adult females and Ivivva Athletica for younger misss. Lululemon primary mark clients are educated and difficult working adult females. who understand the importance of healthy and active life style. Majority of these adult females are Caucasic who are chiefly urban and have higher income. since Lululemon is an expensive trade name. Most of their merchandises are design to offer fit. public presentation and comfort while integrating both manner and map. On another manus. American Apparel ( AA ) is a US company that manufactures. sell and administer voguish manner dress.

American Apparel primary mark clients are younger misss and male childs. who value quality and cheap vesture. American Apparel is eco-friendly industry that uses solar energy to supply 15 % of its power at its corporate central office. American Apparel attracts their consumers by utilizing recycles and cruelty-free stuffs. Finally. Roots Canada Ltd. designs. develops. industries and sells athletic wear for adult females. work forces. kids and babes around the universe. The company operates and owns retail shops in over 260 shops across Canada. US and Asia. Roots Canada Ltd. is in private owned by Don Green and Michael Budman.

Majority of their consumers are adult females and work forces that have middle or upper in-between income. As we can see. all three vesture industries have similar vesture merchandises. all of them are concentrating on the athletic entreaty. But how are they traveling to pull consumers from different civilizations or differentiate from their rivals? They are strong Canadian and US trade name names but they need a new selling scheme to pull new consumers and adapt to the weak economic system. In footings of come ining new markets. Lululemon. AA and Roots might confront the challenges of replacing their success in social/demographics norms that may be really different than North America’s and US. Besides. invariably produce top of the line merchandises without deflecting from their nucleus consumers and present new entreaty. However. presenting new merchandises might ache their trade name if deficient merchandises and stuffs are used. Therefore. merchandise image and quality are of import in prolonging the Lululemon Athletica. AA and Roots Canada trade names. Research Objectives

This is a instance survey of Lululemon Athletica. AA and Roots. The instance survey includes a sum-up of the overall strategic placement. SWOT analysis and what sort of concern jobs they are confronting or are likely to confront in the close hereafter. This instance survey reveals the techniques to be used in garnering the information and recommendations to cover with possible menaces. Lululemon Athletica. American Apparel and Roots. should custom-make their scheme to local markets and take on a multinational attack by moving globally. An analysis of the external chances. failings. internal strength and competitory menaces will assist to find the cardinal trade market demographics Research Method

Exploratory research is most suited to derive current and relevant background information about Lululemon Athletica. American Apparel and Roots trade names. . Exploratory research besides helps to place dimensions of consumer’s satisfaction with the trade name quality. Library database and the Internet offer entree to big sums of Secondary Data resort that can be used for SWOT analysis. As societal and demographics alterations. the consumer’s behavior will alter because of alterations in life styles and displacements in the age. A qualitative research needs to be conducted. in order to happen out what people/customers are stating about the Lululemon Athletica. American Apparel and Roots trade names. Study Findingss: Lululemon

Lululemon Athletica. has done a enormous occupation pass oning their trade name to consumers. However. in 2013 Lululemon faced some tough challenges when their celebrated Luon cloth was excessively see-though. “It states the company’s stock declined by 10 per centum in 2013 after it recalled a big batch of its black Luon stretchy pants” ( EBSCO. Nov 11. 2013 ) However. Lululemon overcame this crisis by admiting the state of affairs upfront and recalled 17 % of their stock list. leting their clients to a refund their sheer bloomerss. Finally. Lululemon’s laminitis. Chip Wilson. made a publically violative suggestion. that some women’s organic structures were non made to have on his yoga bloomerss. “The job was that the yoga-apparel company has been holding with its bloomerss on the size of women’s thighs” ( EBSCO. Nov 14. 2013 ) .

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After doing those remarks deter plus size clients were embarrassed and felt like they don’t want to shop at the shop anymore. Some adult females blamed CEO for doing merchandises that don’t last long. One of the illustrations from Financial Post. However. despite the unfortunate happenings last twelvemonth Lululemon is in a really healthy place in the Canadian and US markets. In add-on to that. Lululemon’s baggiest rival is now Sears Canada. Sears became a new halt for consumers who want high-quality and low-cost yoga cogwheel. “The fighting section shop concatenation says its Pure Energy Athletics line of yoga apparels has been a hit with clients since they were introduced in February. The concatenation says it sells yoga bloomerss for $ 14. 99 or $ 29. 99 – a bargain compared to similar vesture from other retail merchants. like Lululemon Athletica” ( Edmonton Journal. May 21. 2014 ) .

However. Lululemon has a enormous e-commerce platform that is really popular with their community based selling attacks and accessible worldwide. The website provides a mass utile information sing their. services. merchandises and information about the company. Besides. Lululemon Has an app called ‘OM finder yoga app’ which allows yoga teachers to purchase their merchandises and happen out information about yoga categories. SWOT analysis will supply better apprehension of Lululemon positioning in the market. Strengths

-Online concern grew by 86 % in 2012 ( Lululemon Athletica. 2013 ) -Opened 37 new shops globally in 2012 ensuing in 211 shops worldwide -Launched 5 E-commerce sites in UK. Hong Kong. Europe. Australia & A ; New Zealand

-Well trained employees
-Premium shop locations across the ball
-Ivivva shops have now made $ 800 per square pes. doing it a top performing artist in the retail concern “ ( CANACCORD. December 3. 2012 )

Recycling and recycling merchandises to do better ware
-Ambassador plan. Lululemon supports fittingness teachers who lead yoga -Lulu can now transport to 51 new states to speed up international trade name presence Failings

-Limited stock ( tight stock list )
-Recall on bloomerss. 17 % of yoga bloomerss as bloomerss excessively absolute and diaphanous. this consequence in a loss of gross revenues -Don’t have sizes greater than 12 and 14 and concentrated on more fit adult females -Very weak trade name acknowledgment in the US as many shops are Located in Canada -Not to many retail mercantile establishments that are located across major metropolis -Sales decline after Chip Wilson made a remark that women’s organic structures do non work for Lululemon vesture. Opportunities

-Improvements to the E-commerce development
-Build planetary trade name acknowledgment through promotions ( ei. Technology ) -Introducing other fitness entreaty other than yoga fittingness
-New market sections of work forces
-Right now bulk of people prefer healthier lifestyle tendency. Bing more active particularly with younger and older demographics ( which means more possible clients )
-Sears Canada presenting similar merchandise for cheaper monetary value -Many known trade names ( for illustration. Adidas. Nike and Gap etc. ) carry similar merchandises. same quality and half the monetary value ( competition ) -Lululemon focused on word of oral cavity. they should look into other marketing scheme to pull more clients and heighten gross revenues Recommendations

One of the possible challenges Lululemon might be confronting in close hereafter is the deficiency of gross revenues in the US shops and their high monetary values. Many of their rivals ( GAP. Old Navy ) have now introduced yoga entreaty at low-cost monetary values. Right now consumers want a high quality merchandises but with low monetary values. Lululemon should bring forth top of the line merchandises and non degrading their merchandises excessively much ( as has been late with the diaphanous yoga bloomerss ) . Besides. present new merchandises. addition trade name consciousness. and use beyond North America. Study Findingss: American Apparel

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American Apparel is a industry. retail merchant and jobber of branded manner basic dress. The company has 251 shops in 20 states. As the largest domestic US dress industry. AA offers speedy response purchase and times substructure. “with the ability to bring forth up to one 1000000s units on a hebdomadal basis” ( Brean Capital. LLC. Feb. 26. 2013. pg 2. ) . AA is able to react to identify manner tendencies in less than seven hebdomads and client demands quicker. AA sells bulk of their vesture throughout retail 28 % and sweeping 63 % channels. harmonizing to the Chart 1 ( Brean Capital. LLC. Feb. 26. 2013. pg 2. ) . AA continues to keep the strongest trade name that has demonstrated the trueness to their consumers. However. in 2009 AA had to put off about 1. 800 of their work force after authorities probe.

Government found out that those workers were illicitly in the state. ” American Apparel’s cut and sew operations. which are undertaken on a team footing. had to be restaffed and retrained. ensuing in stuff beads in productiveness and quality control and an inability to transport goods in a timely mode. When combined with the fixed cost substructure of American Apparel’s mill substructure. borders were materially impacted. ” ( Brean Capital. LLC. Feb. 26. 2013. pg 4. ) . Below is a SWOT analysis to assist us to understand better about AA market positioning. Strengths

-Fully vertically incorporate corporation
-Different from other trade name. by selling voguish fabrics
-American made trade name
-No outsourcings
-Good quality vesture
-Strong market positioning
-Effective selling scheme and speedy response clip
-The wholesale. can carry through orders nightlong
-“Approximately 45 % of the company’s shops ( and somewhat under 40 % of gross ) are international. as American Apparel represents a genuinely planetary trade name aesthetic for the younger. urban customer” . ( Brean Capital. LLC. Feb. 26. 2013. pg 2. ) . Failings

-Over priced
-Clothing with no forms or designs. merely flat American dress
-Limited client base. as they don’t have merchandises to accommodate different civilizations
-Recent finicky problems in 2009-2010 that were driven by internal and external issues
-Their selling scheme is merely concentrating on ads that are proceeded through print and cyberspace
-Has no logo. difficult to acknowledge

-E-commerce concern
-Create more discounted shops
-Expend exterior of US/Europe
-Create new merchandises
-Shift to positive operation
-Rising costs of natural stuffs might ensue in higher monetary values
-More rivals with lower monetary values and high terminal vesture
-Economic lag

Many people consider AA excessively expensive ( illustration from Gawker ) . the ground why is because of their production in USA. Besides. their entreaty is solid without any forms and no logo. AA should plan entreaty to aim different consumes and plan their logo to stand out. In add-on. they should see outsourcing occupations. so they can take down their merchandises costs. Materials and labour are cheaper in other states. Study Findingss: Roots Canada Ltd.

Roots Canada Ltd. is vertically incorporate company and most of their merchandises are made in Canada. The merchandises are active athletic wear. leather goods. and yoga wear. Roots Canada Ltd. is really committed to their ethical criterions. that they implemented a Workplace Code of Conduct that set minimal demands that all providers must run into in order to make concern. For the past old ages. Roots has expanded internationally to US. Asia and Europe. Besides. in 2013 Roots partnership with Target to sell their “Roots Outfitters aggregation including manners for adult females. work forces. male childs. misss and yearlings. will be available from March to June” ( CBCnews. Jan 24. 2013 ) . Bellow is a SWOT analysis to find Roots Canada Ltd. Market positioning. Strengths

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-Canadian heritage and strongly recognized in Canada
-Good quality merchandises
-Private ain company
-Logo- & gt ; store visual aspect and layout
– Was functionary outfitter of vesture for members of the Canadian Olympic Weaknesses
-Limited online shops and knowing transportation
-Even know the Brand is Canadian. 40 % of their vesture is manufactured outside of Canada Opportunities
-Economic Recession
-Competitors ( Gap. Old Navy…etc )

Roots has positive trade name image as they are invariably supplying loyal client service and high quality merchandises. Peoples on the Facebook were pleased with their merchandises and merely had positive things to state about Roots. Implications/Recommendations

However. Roots should plan trendier and more stylish apparels to suite all ethnicity and diverseness. I merely think that Roots are stuck in 1900’s and they haven’t changed the design of their entreaty. They need to review the image of the company! Besides. Roots could publish loyalty card to assail new clients and maintain current one time. This manner they can supervise or pull off their database to find what point sells and gather feedbacks to assist them to better the new entreaty. Study Limitations and Directions for Future Research

I had difficult clip happening information about Roots Canada Ltd. . as they are in private ain company there is non much information available online. I used Business Source Elite the most. However. when you are seeking for Roots Canada. you have to do certain you include “Ltd” because if you don’t. the database will give you historical beginnings about America. I looked at Merger Online as good. and I was merely able to happen information that was the same as their company’s web site. I work for finicky establishment. even on Bloomberg you can’t find much.

Merger Online. Business Source Elite and Business Penetrations: Global were really helpful to happen current information about Lululemon and AA. Had diaries and company’s finicky study that were most up to day of the month. Social media ( Facebook. chirrup. . etc ) I would see it as biased because they can pay their household friends to advance their companies trade name. In footings of future research. I would propose to carry on infield research of companies. Travel in to the shop and inquire costumiers what they think about the trade name.

American Apparel Has a ‘Full Body Head to Toe’ Employment Policy. ( 2010. June 9 ) . Gawker. Retrieved May 30. 2014. from hypertext transfer protocol: //gawker. com/5559165/american-apparel-has-a-full-body-head-to-toe-hiring-policy Beder E. ( 2013. February 13 ) Initiation of Coverage. American Apparel. Inc. Retrieved May 21. 2014 from Brean Capital. LLC Dockterman. E. ( 2013. November 14 ) . Searching: Business Source Elite. What Lululemon Could Learn From Abercrombie About Fat Shaming. . Retrieved May 28. 2014. from hypertext transfer protocol: //www. ebscohost. com/

Nguyen. L. ( 2014. May 21 ) . Sears Canada focuses on low-cost yoga cogwheel market. stations Q1 net loss of $ 75. 2M. World Wide Web. edmontonjournal. com. Retrieved May 28. 2014. hypertext transfer protocol: //www. edmontonjournal. com/business/Sears+Canada+posts+loss+revenues+weather/9862547/story. hypertext markup language

Press. T. ( 2013. January 24 ) . Target shops to offer Roots vesture. CBCnews. Retrieved May 29. 2014. from hypertext transfer protocol: //www. complete blood count. ca/news/canada/toronto/target-stores-to-offer-roots-clothing-1. 1305588

Shaw. H. ( 2013. December 10 ) . Lululemon laminitis Chip Wilson’s 5 most controversial quotation marks. Financial Post Business Lululemon laminitis Chip Wilsons 5 most controversialquotes Remarks. Retrieved May 28. 2014. from hypertext transfer protocol: //business. financialpost. com/2013/12/10/lululemon-athletica-chip-wilson-controversy/

Lululemon athletica inc. ( 2012. December 3 ) . Canaccord Genuity. Retrieved May 20. 2014. from hypertext transfer protocol: //research. canaccordgenuity. com/_layouts/researchnoteviewer. aspx? pubid=85428