History of Lululemon Athletica Inc. (Essay Sample)

Histories of the company
Lululemon Athletica Inc., based in Vancouver, Canada, is an athletics and sports clothing manufacturer. The business began as a part-time yoga class and a clothing design boutique (Tybout, 2017). The owner was inspired to create elastic and athletic yoga trousers after seeing a shortage of excellent yoga gear. Even though the firm has previously designed other sports gear for snowboarders and skiers, the yoga pants were its most successful product. Lululemon Athletica, its current brand name, later established its first large shop in Vancouver (Tybout, 2017). that first limited the company's activities to the Canadian market, but when it began trading publicly, it expanded. Franchises have accounted for most of the company's growth (Tybout, 2017).
Service and Product
When it comes to development and expansion, Lululemon is now one of Canada's most promising companies (Qian & Zou, 2021). Lululemon, for example, had 188 locations worldwide by 2012, in addition to a significant internet presence in Canada and other countries. As of 2012, the Lululemon company is worth more than $3 billion. This is a 292 percent increase over the previous year (Agnihotri & Bhattacharga, 2019). Women's yoga gear is the company's flagship product, accounting for over 40% of sales. The firm also provides additional sporting apparel, such as casual and running attire (Agnihotri & Bhattacharga, 2019).
The company's business plan is to use a vertical-retail method of operation to attract high-end clients. As a result, the firm has maintained control of its brand image and distribution networks. Individuals like instructors and yoga teachers serve as the primary brand ambassadors in the company's vertical retailing approach (Qian & Zou, 2021).
Position of the Firm in the Market
The company's main strength is brand devotion, compared to a cult following by some analysts (Kim & Lee, 2020). This impression stems from the company's ability to establish a market presence and expand via grassroots efforts. Because this business strategy is not common, this technique sets the firm apart from the others (Grabner, 2019). In addition, the firm supports the community-yoga concept by providing free yoga classes in the majority of its locations. Because the business retained brand ambassadors, this technique has allowed it to continue acquiring new consumers.
Additionally, the brand is linked to several populist ideas, including health and fitness and the desire for communal solidarity. The firm plans to extend its retail locations outside of North America in the future and raise brand recognition (Kim & Lee, 2020). In addition, to make its marketing strategy more acceptable in the present climate, the company plans to offer new items and technology in the future. The company's financial situation was 3.3 billion dollars during 2010, but it has since climbed to $47 in 2012. After a worldwide suspension of its trousers and the following management change in 2013, the firm suffered a financial setback 2013. (Kim & Lee, 2020).
Primary Rivalry
Over the past several years, the yoga gear business has gotten more competitive, " drawing both huge worldwide brands like Nike and smaller start-ups like Prana, as well as Lucy Activewear," according to the report (Diao, 2021). Because of its scale economies and well-established distribution networks, Nike is the most formidable competitor for Lululemon (Layrence &Lozanski, 2014).
Critique of the Company
Porter’s Five Forces Analysis
Bargaining Suppliers' leverage
When it comes to vendors vying for its business, it has various alternatives (Diao, 2021). For example, the company's raw materials, like cotton and rubber, are plentiful in Canada, giving Lululemon purchasing choices. As a result, suppliers have less negotiation strength compared to Lululemon's business strategy.

Newcomers Pose a Risk
The danger of new entrants has little impact on Lululemon's business strategy (Layrence &Lozanski, 2014). In today's business climate, the globe is flooded with new and emerging brands, most of which are promoted over the internet. As a result, in the face of fierce competition, a new firm is unlikely to establish the brand recognition that Lululemon has built over time. Consumers may, however, save money by moving to an internet-based business.

Power to Bargain
Due to the low switching costs, Lululemon's customers have much-negotiating leverage. As a result, the business must guarantee that its items are high-quality and inexpensive. Consumers will not be able to take advantage of the reduced switching costs due to this technique.

Levels of Competition
The industry in which Lululemon operates is now one of the highest competitors in the world (Diao, 2021). Various companies are realigning themselves to get a significant piece of the sportswear market. Switching costs have also made it easy for businesses in this market to steal customers from competitors.

Substitutes Pose a Threat
The clothing manufacturer has concentrated on creating clothing that appeals to a specific audience rather than the general public. This technique guarantees that the danger of Lululemon knockoffs is kept to a minimum (Diao, 2021).


External Analysis
Factors Economic
Several economic factors, particularly stringent European Union regulations, have hindered the company's growing pace (Xu, 2020). The slowing of major global economies, such as the US, has reduced prospective clients' purchasing power.

Political
The present political climate makes it simple for a Canadian corporation to grow into North America. Lululemon has also secured significant patents in several countries across the globe to safeguard its commercial interests. Because it outsources the manufacture of several of its goods, the corporation has close ties to China and other Asian nations. Increasing labor expenditures in these sectors, on the other hand, is expected to boost the firm's production costs.

Factors of the Socio-Cultural
The company's support of good health is one element that's had a significant influence. Lululemon's prospects are bright, thanks to the current trend of adopting an active lifestyle (Xu, 2020). The number of people who practice yoga as part of their daily routine, for example, is expected to rise in the future.

Technological
Since most of Lululemon's items are accessible online, technological advancements significantly influence the company's business strategy. For example, the firm has reached out to new audiences and demographics using social media (Xu, 2017). Lululemon, on the other hand, faces more competition as technology evolves.

Demographics
There is a growing demand for sports gear within the older population looking to live a healthy lifestyle. The sports apparel business has focused primarily on youngsters, disregarding a potentially lucrative market among the elderly but still active population.