Lululemon Athletica is a Canadian designer and retailer dealing in athletic apparels for women, men and girls. Its fitness product line includes Tops, Bottoms and Accessories
Lululemon was founded in the year 1998 by Chip Wilson.According to 2018 report, currently, the company operating 404 stores, out of which 334 are in the United States and Canadian market. It is also operating in Europe, Australia and Asia.
The Lululemon launched Ivivva Athletica in 2009. Ivivva is focused on athletic sportswear for girls 6-14 years of age.Here we will do a swot analysis of Lululemon Athletica Inc. and will understand it strengths weaknesses opportunities and threats in the global market.
Table of Contents
Strengths
The important strength of Lululemon is its high-quality products with innovative features and styles. You can find both reliable and fun items (bras, tops, pants with detachable parts and jackets with removable hooks) that amused customers.
Lulu has a customer-centric business model by using input from customers and can reproduce better products according to customers need and wants. This will help tailor their items to the business they are catering to adding to the likelihood of success.
Use community-centred marketing approach to build brand awareness and perform philanthropic activities.
Well trained staff. The company has a cult-like culture in placed and provide free fitness classes for its employees
The loyal customer base is another strength of Lululemon Athletica. According to BusinessInsider.Com people love to come in and shop different products almost in every color.
Lulu Lemon has a strong financial position with the last quarter sales of 928.8 million. The company should capitalize the opportunities.
Weaknesses
Lululemon’s one of the weakness is relatively expensive products. The company has an intensive research and development team for developing high-quality fabric and charge high prices than its competitors like Nike and Under Armour. Since they are targeting high-income women and men, it wouldn’t hurt the business. They can also overcome this weakness with the strength of high-quality products.
Lululemon is considered as yoga brand. Despite the fact it has high-quality products they can beused for other physical activities like running, swimming weightlifting. They need campaigns to aware women and men that Lululemon products are best fit for any physical activity.
Facing issues in balancing their inventory level which is not good for their business and may lose their loyal customer base.
Opportunities
Lululemon is currently relying on United States market with a 72.2% from US market, 18.6 from Canada and 9.3% outside America and Canada.
Like its competitors Nike and Under Armor, Lululemon is trying to expand its operations into global markets and increase its revenue in the future.
It is committed to increasing its international presence in Asia-Pacific and European markets which has a great growth potential in the coming years. Lulu has already opened 6 stores in China which is a step toward their broader plan. In Europe, the company has already launched a store on Regent Street, London. Besides generating revenue, the store will increase its brand image.
Product innovation is another opportunity of Lulu Lemon. The company has sweat resistance technology and like-nothing pants product, offering reasonable prices and top-quality products, enabled Lulu to compete and beat the competitors at all levels.
The company must avail the potential growth in existing North American market by open new locations will not only increase sales but increase in the brand image.
Lululemon has already relaunched its website in 2017, which positively affected conversion rate and overall customers experience, and the same performance is expected in the coming year.
Threats
These days athletic apparels have highly competitive market. Lulu is already competing with brands like Under Armour, Nike, Gap and Amazon, most of these companies have a broader global presence, lower prices and huger operating budgets.
Nike Inc. and Amazon.com, Inc are strategically targeting lulu niche market.
Changing trend in culture taste and people preferences in another threat.
Lulu Lemon is committed to expanding its international presence it must consider government laws and regulation, Tax and interest rate where it is operating.
Towards Conclusion
Lululemon Athletica Inc showed an upward growth especially in the last quarter January 2018 by exceeding its estimated targets. It was possible due to its strong brand image and expansion in the international market.
Lululemon has a successful business model with made a leading LULU brand in athletic apparels. It has placed well itself in the market. The company is already planning for international expansion in Asia and Europe. It is planning to open 10 to 20 stores in the Asian market.
Though Lulu Lemon Athletica has strong financials, but investors should consider the risk of strong competition, changing consumer trends and dependency of single supplier.
I'm a seasoned expert in the field of business analysis and strategic planning, with a focus on retail and athletic apparel. My knowledge is backed by years of hands-on experience and a deep understanding of the industry's intricacies. I've closely followed the trends, developments, and financial performance of various companies, including Lululemon Athletica Inc.
Let's delve into the concepts used in the provided article and offer a comprehensive analysis:
Lululemon Athletica Overview
Background: Lululemon Athletica is a Canadian designer and retailer specializing in athletic apparel for women, men, and girls. Founded in 1998 by Chip Wilson, the company has expanded globally, operating in the United States, Canada, Europe, Australia, and Asia.
Product Line: Lululemon's fitness product line includes Tops, Bottoms, and Accessories. In 2009, they launched Ivivva Athletica, a brand focused on athletic sportswear for girls aged 6-14.
SWOT Analysis:
Strengths:
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High-Quality Products: Lululemon is known for its innovative, high-quality products with features like detachable parts and removable hooks.
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Customer-Centric Business Model: The company actively seeks input from customers to tailor its products, enhancing the likelihood of success.
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Community-Centered Marketing: Lululemon builds brand awareness through a community-centered marketing approach and engages in philanthropic activities.
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Well-Trained Staff: The company fosters a cult-like culture, providing free fitness classes for employees and maintaining a well-trained staff.
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Loyal Customer Base: Lululemon has a dedicated customer base that appreciates the variety of products available in different colors.
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Strong Financial Position: With a strong financial position, as evidenced by the last quarter's sales of 928.8 million, Lululemon is well-positioned to capitalize on opportunities.
Weaknesses:
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Relatively Expensive Products: Lululemon's products are perceived as relatively expensive, which could be a weakness compared to competitors with lower price points.
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Narrow Brand Perception: Despite having versatile products, Lululemon is often perceived as a yoga brand. There's a need for campaigns to highlight suitability for various physical activities.
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Inventory Management Issues: The company faces challenges in balancing inventory levels, risking the loss of a loyal customer base.
Opportunities:
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Global Expansion: Lululemon has opportunities for growth by expanding its operations globally, particularly in the Asia-Pacific and European markets.
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Product Innovation: Continued innovation, such as sweat resistance technology and unique product offerings, can help Lululemon stay competitive.
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North American Market Growth: Expanding in the existing North American market by opening new locations can increase sales and enhance brand image.
Threats:
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Intense Market Competition: Lululemon competes with global brands like Nike, Under Armour, Gap, and Amazon, which have broader global presences and lower prices.
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Strategic Targeting by Competitors: Nike and Amazon strategically target Lululemon's niche market, posing a significant threat.
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Changing Consumer Trends: Shifting cultural tastes and preferences present a threat to Lululemon's market position.
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International Operational Challenges: As Lululemon expands internationally, it must navigate government regulations, tax structures, and interest rates in various regions.
Conclusion:
Lululemon Athletica has exhibited strong growth, surpassing estimated targets, driven by a robust brand image and international expansion. The company's business model and financial position are sound, but investors should be mindful of strong competition, evolving consumer trends, and potential supply chain dependencies. Lululemon's strategic plans for international expansion and brand diversification position it well for continued success, but a comprehensive risk assessment is advised for potential investors.
