Essay on Lululemon

2622 Words Jul 27th, 2013 11 Pages
Case Analysis

Lululemon Athletica

Executive Summary

lululemon is an athletic apparel company that gears its merchandise towards yoga. Founded in Vancouver, Canada by Chip Wilson in 1998, the company aligns itself with many of the same values that yoga displays: balance, harmony, and culture. As of July 29, 2012, lululemon owns and operates 189 retail store locations all over the world. In 2007, the company’s owners elected to take the company public. Its initial public offering took place on August 2, 2007, and began trading on the NASDAQ under the symbol LULU and on the Toronto Exchange under the symbol LLL. Currently, lululemon is very successful brand all around the world with its sales per retail square food
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In this case, my analysis shows that performance-based yoga and fitness apparel industry has few restrictive government policies, difficulties of building a network of distributors. As a result, the retail apparel industry is competitive with very low barriers to entry. Therefore, newcomers can expect to earn attractive profits and renew interest from existing competitors as buyer demand rapidly. Moreover, big existing industry members such as Adidas, Rebook, and Nike always look to expand their market by entering product segments or geographic areas where they do not have a presence. It also is a reason makes entry threats are strong.

The third factor that affects competitive pressures is supplier bargaining power. In performance-based yoga and fitness apparel industry, there is surge in the availability of supplies. Furthermore, there are no suppliers with large market shares and the level of competition among suppliers for this market is significantly high. Therefore, the bargaining power of supplier in performance-based yoga and fitness apparel industry is weak. Besides, my analysis shows that buyers for this market are not very price-sensitive because they are well-educated and have high living standard. As a result, the bargaining power of customer for this market is also below the moderate. Similarly, competitive

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