Swot Analysis Of Lululemon

Background

Lululemon Athletica Inc. was founded in 1998 by Wilson. Lululemon is an upscale athletic apparel company based around the exercise of yoga. Wilson became interested in yoga after selling his previous company Westbeach Snowboard Ltd. In 1997. Yoga did not receive heavy attention until the 1990s, which made Lululemon one of the first companies to cater to this particular service in a fast growing industry. Wilson began the company by selling apparel and offering yoga classes. Wilson opened up Lululemon’s first real store in 2000 in the town of Kitsulano in Vancouver, Canada. Wilson gained much success with Lululemon, considering that the net revenue is more than $1 billion in 2012 and Wilson’s new worth is about $2.9 billion in 2013.

Lululemon grew rapidly from the one retail store in Vancouver in 2000 to 211 stores and over 6,000 employees by 2013. The company also started selling products online and in stores across the world. As Lululemon grew, the products that they provided grew as well. The company started to provide a broader range of athletic clothing and accessories. The quality of the products did not change once they widen their range in products. The products/apparels that were produced were made from both synthetic and natural fabrics.

Lululemon is partnered with third party suppliers that manufactured its products.

Lululemon products are manufactured in 15 different locations around the world by the end of 2013. Lululemon worked with the suppliers to advance the product lines. The suppliers and Lululemon formulated technically advanced fabrics and features. These features helped attract the company’s target customer, which is a “sophisticated and educated woman who understand the importance of active, healthy lifestyle… to achieve physical fitness and inner peace.” Even though their target is women, men and youth have taken a particular interest in the company and its products.

Lululemon has a manifesto that captures the core of the company. Lululemon’s mission statement is “creating components for people to live longer, healthier, fun lives”. The company does not want to just help with having a healthier life. The company gives all types of advice starting from health advice and ranging to relationship advice. Lululemon’s core value is developing the “highest quality products, operating with integrity, leading a healthy balanced life, and instilling in our employees a sense of self-responsibility and personal

achievement.”

Analysis

Even though Lululemon’s core values are based on people living healthy and fun lives, the company seems to only really cater to certain people. Early on the company, especially the founder Wilson was hit by bad PR. Wilson made trivial comments about child labor, feminism, Japanese customers, plus-size customers and women’s bodies. Instead of fixing the bad PR against Wilson and the company, Wilson kept making it worse.

One of the big controversial comments that Wilson has made in relation to the company was the fact that Wilson purposely named the company Lululemon to make more money off of the Japanese consumer market. Because the letter “L” is not in the Japanese alphabet, the company would seem more exotic. This thought process did not carry well when people found out. Wilson thought it was funny, that anyone who spoke Japanese could not pronounce the company name. this statement caused a big uproar from people on social media. Another big issue that Lululemon received bad press from was the company’s and the founder’s attitude towards plus-sized customers. In the store, the plus-sized apparel was in the back, not displayed very well, and was rarely restocked. Wilson called plus-sized apparel “money losers”. These comments tainted Lululemon’s reputation as a brand that focuses on people’s health.

Even though the company has had continuous bad PR, the company has never suffered financially from it. In Lululemon’s 2012 annual report, the company had a net income of $184,964,000 compared to 2010 net income of $58,281,000. The company not only was affected financially when faced with the bad PR, but the company progressively increased in net income. Lululemon benefitted from any type of press that received, whether it was good or bad. Wilson did not handle the bad PR the most effective way, but eventually, people forgot about the comments or at least did not care about them. Wilson and the company would have benefitted greatly from putting a statement out about the comments that he had made. The company should have also changed their marketing strategy, so the brand seemed more inclusive to everyone. Since then the company has gradually tried to changed people’s minds about what the company stands for.

Lululemon Athletica Inc.

prides itself in the culture it provides. Since the company is yoga based Wilson originally only had yoga practitioners working for the company, but that did not work for the overall company. Wilson then changed his employee strategy to hiring runners who also liked yoga. The employees who only liked yoga were too slow but the runners who liked yoga were the type of people imagined to represent the company. The company’s biggest strength is their culture. They provide a “supportive, goal oriented environment” and customers respond positively to the culture. Each employee represents the company and the lifestyle the company has. Because their culture is a key component of the company, the company needs to make sure the employees are aware of what they a representing because they are not just representing a company, but they are representing a

lifestyle.

Lululemon’s culture and employee attitude have stirred a lot of controversies. People either see the company’s culture as cult-like or they see it as positive. The company believes that one of their biggest strengths is the community they have created within the company. When people walk into the retail stores, they are amazed at what is there because it is not just clothing, but a place to talk to people who have the same interests as one another. Because the company believes that this is such a key to their success, they have sent employees to training, personal development workshops, and goal coaching. Lululemon employees are basically the spokespeople for the company, so they want to make sure they exude the same positivity and the same lifestyle they want the brand to represent. Lululemon’s best idea was to focus much of their attention to the employees and the culture because that is who and what the customers come into the store see. Their culture is what keeps bringing people back and is what has saved people from the controversial comments that have been made by Wilson. If the company continues to keep that culture and community alive and make changes to their exclusivity in sizes, the company would thrive even more.

Conclusion

Lululemon has successfully managed to stay true to the core of their brand. The company wants to provide a community where people are positive, active, and fun. The company and its employees have successfully made that community a reality with the culture each individual store location has. The customers have reacted mostly positive to the company’s positivity and lifestyle. The company knows what type of people they want. Lululemon shows that they are there for them for any customer that is loyal to the brand.

Lululemon is constantly being talked about, whether it is about their cult-like community or their founder making a controversial comment. No matter for good or for bad the company has stayed in the press. When facing adversity, Lululemon has continuously overcome it. The best marketing strategy for them expands their target market and make the apparel more size inclusive. That issue around “plus-size apparel” caused the most problem, so the company should showcase how they are changing and making it better for everyone. Lululemon should display more advertisements with people of diversity. Their brand is known to cater towards a certain demographic, so marketing that they are for anyone who wants to live a healthy and fun lifestyle would benefit them. Campaigns that represent this side of Lululemon, the side that wants to progress and change and can be for anyone. A great way to kick-start this change is to have a campaign, that features multiple plus-size models. This type of campaign can change people’s opinion on the brand and change the way people believe the customers of Lululemon should look like.

Overall the company’s focus should be on fixing the numerous problems regarding in public relations, employees, and the founder of the company. While fixing these issues the company should be constantly promoting the company’s positive attributes to show their “good side”.