Lululemon's strategy: when a challenger threatens the big players of activewear (2024)

FAQs

What is Lululemon's competitive strategy? ›

A unique, community based marketing approach.

lululemon also uses a community centric marketing approach. While brands like Nike and Adidas have built their brands through big name endorsem*nts, think Serena Williams or Michael Jordan for Nike, lululemon has largely marketed its brand via word of mouth.

The logistics problems that have hurt Lululemon's performance since the holiday season haven't yet fully alleviated. Chief Financial Officer Meghan Frank cited “ongoing impacts of Covid-19, supply-chain disruptions and inflationary pressures” as some of the issues facing the business.

Lululemon's vision statement is “to be the experimental brand that ignites a community of people living the sweat life through sweat, grow and connect.” The statement consists of the following components: exceptional brand, ignite communities through sweat, and create connections.

Lululemon Behavioral Segmentation

Lululemon is a premium fitness wear brand, and products are pricey, ranging from $90 to $130 for items such as leggings and bras. Therefore, Lululemon tends to attract middle to upper class customers. The typical Lululemon target customer is fitness enthusiasts, who regularly work out.

Lululemon used a premium pricing strategy and thus they charge higher prices than their competitors for their products. They have set a goal to create the perception that their products must have a higher value than competing products because they offer something the competition lacks and thus their prices are higher.

Lululemon is using a focus differentiation strategy to face the competition in the market. This strategy is one of the five generic competitive...

The threat of new competitive entrants to this market are high. This can be justified by the high financial, human, production, and marketing costs that would be necessary to achieve any substantial market share beyond a local level. There may be entrants in specific niches, such as Lululemon is associated with yoga.

Lululemon's strategy focuses solely on activewear apparel, while its competitors fight over who has the best shoes. The iconic legging comes at a price at Lululemon — almost three times the most frequent price of its competitors.

As well as differentiating themselves from competitors, Lululemon also has several competitive advantages compared to competitors. Those including product quality, customer loyalty, patented material, efficiency, innovation, and responsiveness to customers.

Lululemon laid out its "Power of Three x2" five-year plan in April 2022, which highlighted its three key priorities: Product innovation. E-commerce. International expansion.

Who is Lululemon's biggest competitor? ›

According to Similarweb data of monthly visits, lululemon.com's top competitor in April 2023 is urbanoutfitters.com with 12.0M visits. lululemon.com 2nd most similar site is shopbop.com, with 4.5M visits in April 2023, and closing off the top 3 is aloyoga.com with 2.2M.

The four most widely accepted key components of corporate strategy are visioning, objective setting, resource allocation, and prioritization.

Be planet.

Our products and actions avoid environmental harm and contribute to restoring a healthy planet.

The brand plans to invest in a more diverse array of retail footprints, including building larger stores that are more experiential. It's also focusing its attention on remodeling stores to become “co-located” — meaning that they have both full men's and women's department — to cater to more men.

lululemon is a leading brand for people around the world who want to live a healthy and active lifestyle. Our strengths are driving our global growth and guest loyalty: Top quality, technically advanced product that offers unique and proprietary innovations.

There are many established companies in the industry, such as Nike and Adidas, which have a strong presence in the market. Overall, the collective strength of the five forces is moderate to strong. 3. The key success factors for this industry are quality, innovation, customer service, brand loyalty, and sustainability.

The authenticity of a brand's message is multiplied when it comes from a member of the community, in their personal tone, rather than the brand itself. People see these influencers and want to live a lifestyle similar to theirs, encouraging them to become a part of the larger Lululemon community.

Lululemon – Mission Statement Analysis

“To elevate the world by unleashing the full potential within every one of us.”

The two basic types of competitive advantage combined with the scope of activities for which a firm seeks to achieve them, lead to three generic strategies for achieving above average performance in an industry: cost leadership, differentiation, and focus.

Four generic business-level strategies emerge from these decisions: (1) cost leadership, (2) differentiation, (3) focused cost leadership, and (4) focused differentiation. In rare cases, firms are able to offer both low prices and unique features that customers find desirable.

What are the different types of strategies for competitive advantage? ›

Weaknesses. High Price Points: Lululemon's products are often priced higher than its competitors, which may deter some price-conscious consumers from purchasing them. Premium pricing can limit the company's market reach, particularly among budget-conscious shoppers and in price-sensitive markets.

The threat of new entrants in the fashion retail industry is relatively low. The high capital requirements associated with starting a fashion retail business, such as the cost of real estate, inventory, and marketing, can be a major barrier to entry for new players.

Based on the “Science of Feel”, Lululemon sets themselves apart from the rest in three major categories: signature fabrics, functional body-complimenting fit, and brand recognition.

lululemon has been on track with its Power of Three ×2 growth strategy. The move is likely to double its revenues from $6.25 billion in 2021 to $12.5 billion by 2026. The plan focuses on three key growth drivers —product innovation, guest experience and market expansion.

The fabrics used in Lululemon products are top-notch, contributing to their high prices. They invest in creating exclusive, high-quality materials like their signature Luon and Nulu fabrics. These materials are not only super soft and comfortable, but also moisture-wicking, breathable, and provide excellent support.

Source 100 percent of cotton from more sustainable sources by 2025. Moving beyond conventional cotton means improving farming practices including soil health and water use.

Examples of Sustainable Competitive Advantages

Strong brand reputation: Customers are more likely to choose companies like Coca-Cola, Nike and Apple because of their positive associations and perceptions. Intellectual property: Patents, trademarks and copyrights can give companies a sustainable competitive advantage.

The idea here is that if a firm is to maintain sustainable competitive advantage, it must control a set of exploitable resources that have four critical characteristics. These resources must be (1) valuable, (2) rare, (3) imperfectly imitable (tough to imitate), and (4) nonsubstitutable.

What is the power of three x2 strategy of Lululemon? ›

Lululemon's power of 3 x2 strategy aims to double the company's revenues by focusing on product innovation, guest experiences and market expansion.

They include doubling its men's revenue between 2021 and 2026, doubling its digital revenue by 2026, and quadrupling its international revenue by 2026. In addition, it plans to double its overall revenue from $6.25 billion in 2021 to $12.5 billion in 2026.

It operates in two segments, Company-Operated Stores and Direct to Consumer. The company offers pants, shorts, tops, and jackets for healthy lifestyle, such as yoga, running, training, and other activities. It also provides fitness- inspired accessories and footwear.

Lululemon's customers include people in their teens and early thirties, both women and men. Since it sells sportswear, it fits anyone who leads a fitness life. However, it is also ideal for those who wear an athleisure style. Lululemon's target audience is mostly yoga or fitness enthusiasts who value work-life balance.

Founded in Vancouver, Canada in 1998, lululemon athletica is a technical athletic apparel company for yoga, running, training and most other sweaty pursuits.

These five elements of strategy include Arenas, Differentiators, Vehicles, Staging, and Economic Logic. This model was developed by strategy researchers, Donald Hambrick and James Fredrickson.

Mindtree recently outlined a 4x4x4 strategy. This strategy is focused on 4 industries, 4 service lines and 4 geographies and this will be the focal point aimed at growth and developing strategic partnerships.

Lululemon used a premium pricing strategy and thus they charge higher prices than their competitors for their products. They have set a goal to create the perception that their products must have a higher value than competing products because they offer something the competition lacks and thus their prices are higher.

Lulu's layout strategy is to not keep items on the shelves for long. With this in mind, their goal is to sell their merchandise at full price and condition their customers to buy immediately when they see an item, rather than wait or put it on hold.

What international strategy does Lululemon use? ›

The expansion is part of Lululemon's “Power of Three x2” strategy, which states that it will reach $12.5 billion in revenue by 2026 — double its 2021 revenue. Along with continuing to invest in women's apparel and the North American market, Lululemon is also putting emphasis on menswear and the international market.

Explains lululemon's competitive strategy is broad differentiation as it utilizes community-based marketing and a personalized service at its retail stores that distinguish it from competitors.

As well as differentiating themselves from competitors, Lululemon also has several competitive advantages compared to competitors. Those including product quality, customer loyalty, patented material, efficiency, innovation, and responsiveness to customers.

Our core values of personal responsibility, entrepreneurship, honesty, courage, connection, fun, and inclusion are lived by our people every day and are at the heart of our unique company culture. We live a life we love.

Lululemon doesn't only focus on selling its products in several store locations. They integrate scarcity to make consumers want more. The brand does pop-up stores in different areas or countries to see if it clicks with the market.

PUMA is another sports brand top competitor of Lululemon. PUMA is a German multinational company founded in 1948 which is headquartered in Herzogenaurach, Bavaria, Germany. The company designs, manufacture both casual and athletic footwear, apparels and related accessories.

Lululemon Competitive Advantage

Lululemon's competitive advantage comes from the scale as well as brand and pricing power it has managed to accrue over the past few years. One of the biggest indicators of that is its ability to charge anywhere between $118 up to $128 for a piece of leggings alone.

Top quality, technically advanced product that offers unique and proprietary innovations. A strong culture that connects our guests, our collective, and our communities. The commitment to create positive change for our people and planet.

our mission statement: Creating components for people to live longer, healthier, fun lives. about our products: We make technical athletic apparel for yoga, running, dancing, and most other sweaty pursuits.

We believe that when life works, work works. And that starts with our core benefits. With our extended health plans, paid time off, savings plans, employee discounts and fitness classes, you can take care of your whole self.

Who is Lululemon's biggest rival? ›

There are several brands in the industry that make sports shoes and apparel. In this post, we will discuss the main competitors of Lululemon. Among the main competitors of Lululemon are leading names like Nike, Adidas, Columbia Sportswear, Puma, Under Armour, Reebok, ASICS, and Athleta by Gap.

Lululemon doesn't only focus on selling its products in several store locations. They integrate scarcity to make consumers want more. The brand does pop-up stores in different areas or countries to see if it clicks with the market.

What Is lululemon's Most Popular Item? Workout Leggings! lululemon is known for selling the best leggings.