Lululemon Athletica Inc. Case Solution
amongst the Industry-HIGH
The companies operating in the industry are continuously competing to gain a higher market share. As the switching cost is low for the buyers, competitors seek to poach the customer of other brands.Moreover, rivalryin the industry is high.
Threat of Substitutes-LOW
The company caters sports apparels, not many significant and good substitutes exist in the market. Therefore, the threat of substitutes is low.
The company has majorly focused upon providing high quality products to its customer across all the countries it has located its stores in. The apparel and clothing line of the company
is a combination of innovative features and styles, this has effectively increased the company’s performance and the company is able to function and cater to larger volume.The company follows a vertical retail strategy that allows the company to interact with its customer on a higher level which has increased and enhanced their information levels regarding their customers leading them to product more efficient and required products.
Weaknesses:The growth of the company is drastically slow as it lacks mass marketing decreasing the reach of the company with respect to its market size. The company has a weak brand recognition in the apparel market of the US. The US is a huge industry with respect to clothing and apparel products and a large number of consumer’s volume is experienced everyday with respect to clothing products. The company does not contain high chances of being included in the consideration set of the consumers located in the US market. The retail stores of the company are not only few and have limited the capacity of the sales making process of the company but the company has also limited its growth by majorly focusing on women line of apparels and clothing. The marketing of the company is decentralized and all the stores are responsible for marketing themselves which has resulted in a different message being conveyed by each store.
Opportunities:The market of the US apparel industry has huge growth potentials for the company and they can efficiently utilize the potential of growth in the industry by increasing the level of focus of the organization in the market of US.The company can grow its business through e-commerce;it can proficiently enter the market of providing its products over the internet. E-retailing can handsomely enhance the quality and frequency of their operations. The number of retail stores of the organization is comparatively less than its competitors;it can increase it level of competency by expanding its operations through establishing more retail stores on local locations and on international grounds as well. Lululemon Athletica Inc. can gain a higher market share in the market of US by increasing the level of brand recognition of the American customers.In the process of making a purchase, if the customers would be considering the products of the brands then they have higher chances of receiving a larger number of sales and revenue. This will have a positive affect over the growth of the company.
Threats:Apparel and clothing industry has huge growth potential. The companies operating in the industry are able to extract large numbers of revenues by catering to the large frequency needs of the apparel market around the globe. Large revenues and rapid growth patterns have attracted a number of competitors to increase their operational efforts, in order to gain a larger market share. The competition in the industry is intense and does not allow the company to operate at a certain strategy, the strategies and offerings of the company are continuously challenged by their competitors increasing the level of difficulties for the company to constantly sustain their market share. The economic condition of the territory can also affect the growth and performance of the company, as a recession or inflation can result in an increase in the prices or it may affect the spending behavior of the consumers as their buying power might decrease……………………
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