External Environment- Opportunities & Threats In the external environment we observe the opportunities and threats for Lululemon. We will look at the broad environment (macroenvironment) as well as the competition that could impact Lululemon’s successfulness. Macroenvironment Economic-Lululemon reports in US dollars and is affected by the weaker Australian and Canadian dollar. Sociocultural- Health and fitness have become a major part of society with a continually growing yoga sector. Yoga is a health and fitness trend that has continued to grow. Alongside yoga, a desire for a healthy organic diet has become mainstream. Consumers want something that is organic and they’re willing to pay for it. This had to great success carried over …show more content…
The youth sports apparel market is very well served, while older active segments of the population are underserved. The men’s athletic apparel market segment present a large growth opportunity for Lululemon. Technological-The emergence of online shopping has enabled clothing retailers to reach a much wider market. The increasing prevalence of social media has presented new ways for companies to advertise and spread brand awareness. New advanced high tech materials are a possible source of competitive advantage for apparel companies (Pacheco, 2013). Political-The NAFTA makes it easier for Canadian companies like Lululemon to branch out across North America. Currently, Lululemon possesses numerous patents protecting, among other things, its products and designs (Pacheco, 2013). Global-Globally, the sports apparel industry is growing (Campos, 2013). Because some of Lululemon’s clothing is manufactured in China and other developing Asian countries, increases in wages in these countries have the potential to lead to higher manufacturing costs (Lululemon Athletica, …show more content…
Materials used such as rubber and cotton are readily available. This gives Lululemon a lot of choice in who they choose to buy from. This means that suppliers have a low level of bargaining power. Bargaining Power of Buyers: As a group, Lululemon’s customers have a high level of bargaining power. Buyer’s switching costs are low; they can easily switch to another brand if they are at all dissatisfied with Lululemon’s products. Threat of New Entrants: The threat of new entrants is moderate. There are advantages to be had from economies of scale. At the same time, companies are able to outsource all of their manufacturing overseas, meaning low up front capital costs. It can be difficult to get access to distribution channels. However, with the internet, retailers now have access to customers worldwide. It can be difficult to establish a new brand, but at the same time switching costs for consumers are low. Competition Level: The sports apparel industry is very competitive, with companies constantly positioning themselves to attract a greater market share. Low buyer switching costs mean companies try to poach competitors’ customers. Threat of Substitutes: There are not many good substitutes for sports apparel, so the threat of substitutes is
While looking at many different reviews people posted online, customers of lululemon athletica seem to be very pleased with the wear and tear of their products. Many different sources say that lululemon athletica’s clothing lasts for an extremely long time therefore people feel that their getting their money’s worth. lululemon athletica is a trend in itself because many consumers want to show off that they work out and wear an expensive clothing line while doing so and love flaunt
Market Analysis Summary The global sports and fitness clothing market is expected to soon reach over $125 billion dollars (PR Newswire, 2015, June 26) and individuals across the U.S. are becoming more active (Institute for Health Metric and Evaluation, 2013, Jul 10). The breadth of the overall market covers many subsets of products and consumer groups. Target segment. There are two primary segments in the market; sports apparel and fitness clothing.
This is due to the great partner ALDI is and how their standards are strict and enforced. They want their suppliers to focus on the product not the cost margins. Estimates suggest that almost ninety percent of brands in ALDI stores are ALDI exclusive brands, which indicates that their supplier’s primary customer is ALDI and hence the size of the supplier is relatively small and their main business takes place through only ALDI. ALDI offers several other benefits such as, always making timely payments, taking efficient purchasing decisions, which prevents them from returning products, etc. To its suppliers, which also contributes in reducing its bargaining power.
Problem: Lululemon Athletica wants to convert consumers of rival workout clothing companies to become loyal customers of Lululemon.
For instance, Primark 's products offer customers clothing as a base product, of witch actual benefits are being to be cheap and trendy, and they may have some return policy as augmented benefit in case of defects. Each product may be realised following a new product development process to improve its success rate (Harris and Schaefer, 2015, p.43-47).
Introduction Weave Tech has several strategic challenges and opportunities since the purchase of the once then called Johnson-ware apparel in 2007. Since the organization has had the challenge of rebranding themselves to attract a new customer base which is also an opportunity to grow the organization. Weave Tech has to reposition the organization to be successful throughout the changes. Another strategic challenge the organization is undergoing is reorganizing and attracting a new management team which causes for cuts and layoffs. These cuts and layoffs can drastically effect the morale of other employees and ultimately production.
Since 1998, Lululemon has transformed the way people dress to workout. Through innovative products and technical athletic fabrics, a brand was created to provide clothing for workouts such as yoga, running and cycling. Lululemon opened its first store in Vancouver in 2000 with the plan to have the store be a community hub for people to learn and discuss their physical fitness and overall health goals. As Lululemon was more than a store to provide products for consumers, their goal was to influence every person who walked into the store. A basic criterion for investment is Lululemon’s mission to create components for people to live longer, healthier, fun lives. All Lululemon locations maintain strong relationships with local communities and host in-store events such as complimentary yoga classes and goal-setting workshops.
Finally, Lululemon also faces competition from active-wear giants, like Nike. Nike has introduced a yoga line, which they are in the process of expanding (Lutz, 2013). Nike proves to be a major rival because they have a greater reach to customers than Lululemon (Lutz, 2013). According to the Nike website, they are selling their yoga pants for $100.
First, we want Nike to play a role in effecting positive, systemic change in working conditions within our industries. If our efforts lead to a workplace oasis -- one solitary and shining example in a desert of poor conditions -- then we’ve not succeeded. Even if that single shining example were to exist (and we’re not claiming it does), we’ve learned that positive changes won’t last unless the landscape changes. Our challenge is to work with the industry and our contract manufacturers to collectively address these systemic non-compliance issues that our data so highlight. This is one of the key reasons we made the decision to disclose our supply base; we believe this could encourage other companies to do the same. Our belief is that in disclosing, the industry will find ways to better share knowledge and learnings. This, in turn, will facilitate the building of further partnership approaches that are built on best practice and gradually lead us to standard codes, standard approaches to monitoring, standard reporting and standard parameters for transparency. It’s our belief that for market forces to enable responsible competitiveness, consumers must be able to reward brands and suppliers using fact-based information. Compliance efforts need to be optimized, made affordable and demonstrate real return if better working conditions are to become widespread. Disclosure of our supply chain is done in an effort to jump-start disclosure and collaboration throughout the industry and support efforts towards that final goal of market forces, providing the tipping point for the mainstreaming of best practice.
Nike’s goal is to remain unique and different from others in terms of the items offered on the market. Arguably, Nike belongs to a monopolistically competitive market as there only a few organizations with the ability to regulate the amount charged for their product which means they cannot make their prices high as this is likely to make customers move on to other available choices (Nike, Inc., 2012). However, Nike can find a balance between the prices to charge for their products and remaining competitive with other companies in the industry. Nike has formed a distinction between the appearance and performance of their footwear and that of their competitors. Although products are differentiated from other companies, they still influence each other because they are items of the same
... its prices (Trefis Team, 2013). Moreover, petroleum price have a significant impact on its gross margin, as petroleum is one of a raw material of apparel product. In the past few years, the company had to face with the high oil price because of global economic that decreased its gross margin (Trefis Team, 2014).
The suppliers bargaining power is generally strong because of the big monopolies and the high importance of purchasing components and operating system, therefore it decreases the profitability of the market players.
Lululemon Athletica, Inc. (Lululemon) is renowned for its technical, high-quality yoga-inspired apparel for women. However, the company is growing beyond this niche market and is therefore altering its competitive strategy. Lululemon utilizes a broad differentiation strategy because its target market is broad and its product line is varied, it stresses product innovation, and its community-based marketing and retail experience sustain its differentiation from competitors.
Finally Under Armour needs to implement better monitoring and control of its stock levels. Under Armour has been forced to cut prices in the past do to being overstocked. Improving supply chain management and shorting the turn around time on order both to retailers and from suppliers is going to be key in preventing this from happening again. Upside supply chain flexibility measures the amount of time that it would take for suppliers to react to an unplanned increase in sales, monitoring this metric will ensure the necessary improvements are being
Threat of new entrant is a business or company thinking of entering the market, that haven’t yet. Mr Price must close any gaps leading to opportunities for a new business by ensuring customers are satisfied and getting all that they need. There are no new threats known yet, but with some online stores such as ‘Apparal.com’ offering free worldwide shipping, Mr Price will need to monitor their public opinion/popularity. The threat will be destroyed if the government implicates a law against importing clothing in order to protect the local market.