Case Study Lululemon

would take advantage of the many substitute products that are available on the market and in the industry. Customers would shift their preference to an alternative company and have little to no switching costs of doing so. The impact on Lululemon would be tremendous and could potentially remove the firm from the playing field if something were to happen to it’s supply chain. Lululemon’s customers have a high level of power or leverage and could potentially impact profitability and even sustainability of the company. Customers have thus far proven to be loyal and insensitive to premium prices but there are several factors that could induce a shift in consumer preferences. If customers find out that the employees are trained to eavesdrop on their conversations and exploit the information to guide design decisions, some will feel they have been taken advantage of and their privacy rights were violated. Because the cost of switching from one brand to another is limited or even non-existent, perhaps Lululemon should consider removing the …show more content…
Among the brands that have begun focusing on athletic products, specifically the yoga and running market, Nike, Adidas, Under Armour, and VF Corp. has been unsuccessful in drawing customers away from Lululemon as growth has yet to slow down. However, the fact that there are several products available in the marketplace that are very similar in terms of materials, function, and look is a serious consideration that has the potential to significantly impact Lululemon’s profitability if conditions within the marketplace change. Furthermore, if consumer preferences shift and Lululemon is not responsive to these shifts and other large athletic apparel companies are, then Lululemon will likely find itself in a position where they are the ones creating substitute products of other brands that would be leading the