BUSINESS STRATEGY

The sportswear industry is very profitable with a reported global market size of $203.26 billion dollars in 2023. Of that, Lululemon’s sales were roughly $7 billion.

Force	Example	Force Strength	Response
Bargaining power of customer	Sportswear is a very large industry and customers have many choices	High	Companies attempt to set themselves apart from others through the use of effective branding. Top brands excel by establishing a visual identity and recognizable logo i.e., the Nike swoosh.
Threat of substitutions	As the sportswear industry grows, there is increased competition from new brands entering the market	Moderate	Brands use exclusive materials/technology to stand out. Lululemon uses a trademarked fabric produced by only one supplier and Nike has employed its well-known Fit technology.
Bargaining power of suppliers	As more brands enter the marketplace, costs may increase as companies compete for manufacturing options	Low	As the demand for sportswear increases, the number of suppliers and manufacturers has also grown across Asia, keeping prices competitive.
Threat of new entrants	New companies are continually entering the marketplace	Moderate	High startup costs create a significant barrier. However, already-established clothing brands like UNTUCKit and Spanx have the capital to enter the market with a ready-made fan base.
Rivalry	There are established rivalries at each price-point. From Nike vs. Reebok to Fabletics vs. Avia.	High	Although competition can be limited by factors such as price-point, brands also employ features, such as the use of special fabrics, or moisture-wicking technology to gain a competitive edge.

 

 

 

Lululemon employs a comprehensive strategy that entails a focus on differentiation. Lululemon is known to have a better product with a focus on yoga-inspired athletic apparel and accessories. There is a strong emphasis on quality and performance.

Lululemon deals with threats from the five forces in the following ways:

1. Threat of New Entrants: Lululemon has built a very big, strong, and well-known reputation. Because of this, they have amassed a loyal consumer base. This base acts as protection from new entrants stealing their customers. Their competitive strategy of focusing on high quality yoga-inspired athletic apparel is what built this reputation.
2. Bargaining Power of Buyers: Lululemon focuses on high-quality products. This has created a long-term reputation of a company dedicated to constant innovation, giving them an advantage over their competitors. Lululemon’s strong reputation and high-quality products give it a strong bargaining chip when negotiating with buyers.
3. Bargaining Power of Suppliers: Lululemon may face challenges in this area given they emphasize a unique and high-quality product. It is important for Lululemon to establish long-term relationships with the key suppliers that make their products available. Lululemon should also explore alternative options to pursue in the event of losing a supplier due to unforeseen factors.
4. Threat of Substitute Products: Lululemon places heavy emphasis on its uniqueness. They offer technical fabrics, innovative and personalized designs, and features designed to enhance performance.
5. Intensity of Competitive Rivalry: To maintain a competitive advantage, Lululemon places its focus on keeping up with its reputation of having extremely high-quality products. To achieve this, constant innovation, listening to customer feedback, and emphasizing the uniqueness of its products are paramount. Additionally, Lululemon emphasizes its uniqueness through the unique experience of going through one of its stores.

Lululemon is renowned for its comprehensive value chain that involves various vital functions. The company's operations begin with procuring high-quality raw materials and ensuring prompt delivery to manufacturing facilities. They also emphasize the meticulous craftsmanship and quality control needed to transform these inputs into premium athletic apparel. Additionally, efficient distribution of finished products to retail outlets and customers is crucial to their operations. Furthermore, Lululemon's wellness and mindfulness philosophy is central to its brand promotion, which has enabled it to build a stable and loyal customer base through engaging marketing campaigns and personalized shopping experiences.

 Lululemon meticulously manages customer interactions from initial engagement to final purchase, employing techniques such as understanding customer needs, guiding product selection, facilitating transactions, and providing exceptional service to ensure satisfaction and repeat business. Its marketing process involves consistent innovation and adaptation to market trends and consumer preferences, utilizing various channels to create buzz around its products, foster brand loyalty, and drive engagement. These channels include social media, influencer partnerships, and community events. Lululemon employs strategic content creation, targeted advertising, and data-driven insights to remain at the forefront of the athletic apparel market, consistently captivating and inspiring its audience.

Lululemon utilizes modern day technology while also using the basic forms of connection to market and campaign to their consumers while also using beneficial technology to fully comprehend their sales. With this being said I am selecting the marketing process and the sales process to describe a few examples of IS systems utilized by Lululemon.

First and foremost, Lululemon thrives in marketing to connect with consumers as well as promote their products in a way that reaches all audiences. Lululemon has various platforms including Instagram, Facebook, Dayforce, LinkedIn, Tik-Tok, and several more. With the use of these platforms Lululemon can enhance sales whilst also ethically promoting the correct products to their broad range of consumers. By utilizing IS Lululemon is able to connect in all areas not only by marketing, but also by communicating through social media platforms. Currently, we as a Lululemon team promote community events online which allows us to greet consumers outside of the store. Overall, we use social media platforms not to market our products, but to connect with our community.

Lululemon also utilizes the POS system which as a current employee, is one of the most helpful forms of assistance we have. The POS system displays a range of information such as revenue, returns, percentages on forms of payment, and so much more. All in all, this system allows us to determine how close to the goal we are as well as decide what areas we are lacking as well as thriving in. Overall, the POS system not only is our form of sales but is the way we navigate through all processes within the store. Lululemon certainly utilizes all Information Systems, and it has coherently proved to be an assistance as well as a skilled technique within the company.

As useful as the POS is for capturing sales data, it is equally useful in capturing that of its consumers. The POS is Lululemon’s most powerful information system. By implementing the use of POS data, the company has developed its primary tool for the community building used to drive its sales. Whether the point-of-sale is at a brick-and-mortar store, or its website, Lululemon effectively uses POS data to market to its target demographic: men and women aged mid-teens to early thirties. Not only does the company use customer data to suggest items based on past purchases, Lululemon optimizes the use of its POS to build the sense of community that sets is apart from other brands. If you’ve ordered a coveted fanny pack, or even so much as a water bottle from their website, you can soon expect to receive emails inviting you into the Lululemon community through both in-store and online services or live community events. Lululemon understands that by building its collective, they are also building a customer base who is loyal to the brand.