About A Case Study Analysis Of Lululemon Company (Essay Sample)

Topic
Name
Institution
Brief History
Lululemon is a Canadian company that was established in 1998. Chip Wilson founded the company which has headquarters in Vancouver, Canada. The company deals with yoga-inspired apparel among other athletic apparel. Chip Wilson initially ran a business that dealt with skates, surf, and snowboard clothing. He ran this business for about twenty years before he decided to establish Lululemon. Chip Wilson attended yoga classes and observed that the cotton made clothes used in the exercises were not appropriate. He took this opportunity to start Lululemon (Tushman, Ruth & Tom, 2010). The company grew steadily, and by 2005, the company was a privately held startup company valued at forty million dollars. It had about twenty stores in Canada.
By 2008, the company was worth more than three hundred and fifty dollars and was trading its shares publicly. The company had about one hundred stores in both Canada and United States of America. The number of employees had increased to nearly three thousand, signifying the robust growth of the company.
Internal Strengths and Weaknesses
Every company or institution has its strengths and weaknesses. The growth of a firm depends on how the strengths of the company are used to its advantage and how the defects are dealt with. When weaknesses are not adequately addressed, they negatively affect the company in its growth and operation (Larcker, Larcker & Tayan, 2014). Lululemon had its strengths and weaknesses. Some of the strengths included;
Management The administration of the enterprise is strength for Lululemon. The top management makes the decisions for the business. If any decision is made wrongly, the company suffers the consequences. The company hires most of its managers internally. This indicates the effectiveness of the management. Since inception, the company has had good decision makers from the days of Chip Wilson to the current Chief executive officer. Christine Day joined the company and helped reorganize the company leading to marvelous growth.
Products The Company regularly designs its accessories and garments. They do this by seriously considering the feedback they get from different sources. These sources include athletes, journalists and even technical advice from apparel design experts.
Company culture The Company has established core values and a manifesto that enables it to grow. The company integrates the making of quality products, integrity and the balance of work and life by the employees. The company usually trains their staff on issues of accountability, setting of goals and the culture of the enterprise.
The company also has their weakness that affects it. Some of these shortcomings include;
Cultural shift The Company suffered significant growth challenges when it deviated from the hiring of managers from the company staff. They started hiring outsiders to occupy management positions. This affected the business negatively (Tushman, Ruth & Tom, 2010).
Rapid expansion The Company expanded rapidly which affected its operations. They invested in real estate development which drained the company resources. Another problem with the expansion was that the growth of the company outpaced the development of operational systems and the required infrastructure.
The Nature of External Environment Surrounding the Company
Competition
Competition from rival apparel companies is a significant existence challenge that faces Lululemon. When a company is not able to shrug off competition through aggressive advertising, marketing, and innovation, the company cannot grow. Larger companies like Nike, Adidas, and Reebok pose significant competition to Lululemon.
Negative publicity
Lululemon has had some instances of negative publicity due to various reasons. At some point, the company was accused of false advertising of its products. External forces do most of this publicity
SWOT Analysis
The strengths of the company included; high-quality products, innovative styles, well trained and qualified staff, marketing based on the present community and premium location of stores.
The weakness of the company included; marketing decentralization whereby each store acted independently, few stores which denied all able buyers a chance to buy their products and difficulties in mass marketing (Thomas & Peters, 2015).
The company had several opportunities to grow. They include; international expansion so as to cover more potential customers, development of e-commerce to engage their customers more and enhance operations and increase in the number of new segments in the market to improve revenues.
The company also experienced threats in its existence. These threats included; competition from competitors which lead to a decrease in market share and revenues, a slowdown in economic growth in the countries which reduces spending by consumers and their small market size which affected sales and income.
The Nature of the Company’s Business-Level Strategy
Supply chain management.
The company intends to maintain long term relations with their suppliers so as to have a continuous supply of products. Most of the company’s production is done outside Canada and the USA and hence it’s important to maintain supply from third parties.
Community centered advertising.
The company had a strategy whereby the stores would market their products depending on the present population in the area. This was done by bearing in mind that most of the customers will be from that selected community.
The company’s structure and control system and how they match its strategy
To successfully implement a plan, the company structure should be aligned towards that strategy. Lululemon had a structure that accommodated their strategy appropriately. First, the company’s production centers were found in China and other South Asian countries. This means that the firm must be in a position to maintain a cordial relationship with the suppliers so as not to affect supply.