The Lululemon Athletica Firms Business Strategy

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TOWS Matrix

The strength and opportunity of Lululemon Athletica is product innovation, which blends functionality and style to meet the needs of the consumers. To utilize this, the company seeks product features superior to others and looks for ways to reduce environmental impacts (Zhu, 2022). Lululemon Athleticas tactics include partnership marketing and customer loyalty programs. According to Mandic et al. (2022), partnership marketing with professional athletes is organized so that the manufacturer can use customer loyalty programs and enhance brand awareness through social media outlets such as Instagram or Facebook.

In addition, the strengths and threats of Lululemon Athletica are limited by economic restrictions on the Chinese market, and to keep profitable growth, Lululemon Athletica uses e-commerce instead of traditional sales channels. Yang (2022) argued that to overcome this threat, the company should develop new products to meet customers needs who prefer to shop online. The opportunity is provided by the growth potential of Chinas sports industry.

Opportunities and weakness of Lululemon Athletica is the shift from the traditional retail business to e-commerce and back, which has mixed results for Lululemon Athletica. According to Kosbab (2021), the shift from traditional retail to e-commerce can bring remarkable success for both competitors but can be detrimental for Lululemon Athletica since their significant revenue came from the sale of sportswear. The threat and weaknesses of Lululemon Athletica are increasing competition and a decrease in medium pricing (Spanke, 2020). In this strategy, Lululemon Athletica has to ensure that its revenues continue to grow at rates more significant than the growth rate of its expenses so that it can continue to increase profits (Baalbaki et al., 2019). Moreover, Lululemon Athletica needs to expand its market coverage to remain successful. The opportunity is provided by Chinas growing middle-class population, which will increase their spending on sportswear, with Lululemon Athletica as one of the market leaders.

Internal factors

External factors

Strengths (S) Weaknesses (W)
Opportunities (O) SO Strategic options

  • The company seeks product features superior to others and looks for ways to reduce environmental impacts.
  • Partnership marketing with professional athletes
WO Strategic options

  • Shift from traditional retail to e-commerce.
  • Gaining access to some of the preferences of various customers when it comes to sportswear.
Threats (T) ST Strategic options

  • Develop new products to meet customers needs who prefer to shop online.
  • Expand its market coverage
WT Strategic options

  • Increasing competition by introducing various sport wears
  • Decrease in medium pricing by one percent in the average price of each item

ANSOFF Matrix

Market Penetration

Market penetration is the primary strategy which can be used here. This strategy involves winning market share from competitors by a firm concentrating on increasing sales of its current products or services to existing customers. According to Diao (2021), the primary technique to follow this strategy is to develop new varieties of the current products or services, improve the quality, and encourage customers to try them. They can further develop this market by making their products more appealing by adding new colours and patterns or improving the quality to last longer.

This strategy and corresponding tactic address opportunities such as AR. They allow them to capitalize on their powerful brand and reputation, which gives them a competitive advantage because they are considered more reliable than competitors. Lululemon also has strong relationships with their suppliers as they can set a price that they are willing to pay for their products without affecting their profitability (Grewal et al., 2021; Fahy and Jobber, 2019). It can help them have more control over the whole process, which reduces unnecessary risks and the chance of the goods getting damaged or reduced.

By following this strategy and corresponding tactic, the company can capitalize on their competitive advantage by developing its product, which will help them improve its market share and service reputation. Although this business strategy has been introduced, Lululemon can still capitalize on its strong brand and competitive advantages by creating new goods (Kim and Sullivan, 2019). Lawson et al. (2019) emphasized that since the company has yet to identify a competitive advantage in the internal analysis, this strategy and corresponding tactic helps it build one by introducing a new product.

The company can implement this strategy and corresponding tactic by implementing a specific change that Lululemon has made in its business model. They have changed from focusing on expanding into new markets without considering their current customers, as they believe that they will hurt their sales to current customers. Dewalska-Opitek, and BiliDska-Reformat, 2021 suggested that, this way, they can create new products and services that will benefit the customers in the end by providing them with better quality goods and faster delivery times.

The company has yet to implement this strategy because they believe it is not beneficial. They would have to give up their current strategies and make changes to delivering the goods and services they use (Cornwell et al., 2022). They also suggest that this strategy can only be successful if the competitors do not have a strong reputation or reputation, which is why Lululemon has not been able to take advantage of this strategy.

Market Development

Market development is the tactic that Lululemon can follow. The primary technique is to create new and more innovative products in their product line. Lululemon Athletica will enter African markets like South Africa. It can be done by they can develop their womens sportswear by adding a unique line of warm-up suits. According to Gauri et al. (2021), Lululemon can further improve the quality or design of these suits so that people would pay more for them and encourage customers to upgrade from regular yoga pants.

This strategy and corresponding tactic address opportunities for product variety and customer customization. The corresponding tactic can overcome threats like competitors with better technology or lower prices (Pan, 2022). The competitive advantage of this strategy is to invest in research and development so that they can quickly meet the new technologys challenges. Brown and Butler (2019) demonstrated that, customers can get a product customized before they order it, allowing them to change their minds if they are not happy with the design of their product.

Since the company has yet to identify a competitive advantage in the internal analysis, this strategy and corresponding tactic help it build one by creating a new product that would appeal to customers. The company can implement this and the corresponding tactic by hiring a designer to develop new designs (Cong et al., 2021). In addition, they can try to acquire a company whose designer has more knowledge than their current designer (Xu and He, 2020) does. Therefore, Lululemon should use the cash flow statement and balance sheet to determine if they have enough capital to invest in research and development.

The company has not implemented this strategy before because they have yet to focus on its sales in the past. The company is already successful, so it will be challenging to implement this strategy and corresponding tactic since it will require significant investment. Once the companys sales are successful, this strategy and corresponding tactic can be implemented by hiring web designers to make something appealing to customers (Martínez-López and Young, 2022). Lululemon should hire more employees to have more customer services, such as drop shipping.

Reference List

Baalbaki, S. et al. (2019) Is Lululemon Athleticas Turnabournd Sustainable? American Journal of Management, 19(2), pp.26-39. Web.

Brown, B. and Butler, B.N. (2019) Authentically communicating with women consumers: Examining successful (and non-successful) branding and marketing efforts. In Routledge Handbook of the Business of Womens Sport (pp. 367-379). Routledge. Web.

Cong, L.W. et al. (2021) Alternative data in fintech and business intelligence. In The Palgrave Handbook of FinTech and Blockchain (pp. 217-242). Palgrave Macmillan, Cham. Web.

Cornwell, T.B. et al. (2022) Shared Brand Equity. Journal of Advertising, pp.1-19. Web.

Dewalska-Opitek, A. and BiliDska-Reformat, K. (2021) To what extent retail chains relationships with suppliers make the business trustworthyan empirical study on fast fashion in pandemic times. Journal of Risk and Financial Management, 14(4), p.153. Web.

Diao, Y. (2021, December) A Systematically Analysis Framework on Lululemon-High-end Professional Brand Image and Close to life Promotion. In 2021 third International Conference on Economic Management and Cultural Industry (ICEMCI 2021) (pp. 536-541). Atlantis Press. Web.

Fahy, J. and Jobber, D. (2019) EBOOK: Foundations of Marketing, 6e. McGraw Hill.

Gauri, D.K., et al. (2021) Evolution of retail formats: Past, present, and future. Journal of Retailing, 97(1), pp.42-61. Web.

Grewal, D.et al. (2021) Strategizing retailing in the new technology era. Journal of Retailing, 97(1), pp.6-12. Web.

Kim, Y.K. and Sullivan, P. (2019) Emotional branding speaks to consumers heart: The case of fashion brands. Fashion and Textiles, 6(1), pp.1-16. Web.

Kosbab, H.J. (2021) Strategic Analysis of Lululemon Athletica, Inc.

Lawson, S. et al. (2019) A Survivors Guide to Disruption. Web.

Mandic, M. et al. (2022) Do Top Athletes, as Social Media Influencers, Really Influence the Customers Decision Making. In Proceedings of FEB Zagreb International Odyssey Conference on Economics and Business (Vol. 4, No. 1, pp. 1028-1044).

Martínez-López, F.J., Li, Y. and Young, S.M. (2022) Social Media Monetization: Platforms, Strategic Models and Critical Success Factors. Springer Nature. Web.

Pan, Y., (2022) Lululemon Provides Better Costumer Services through Digital Ecosystem. Highlights in Business, Economics and Management, 1, pp.127-130. Web.

Spanke, M. (2020) Retail isnt dead: Innovative strategies for brick and mortar retail success. Springer Nature. Web.

Xu, W. and He, Y. (2020) Study on Lululemons Marketing Localization Strategy in China Based on the Marketing Theory of 4Cs. In Proceedings of the 2020 International Conference on Management of e-Commerce and e-Government (pp. 71-79). Web.

Yang, Y. (2022) Analyzing Lululemons Localization and Community Marketing Strategy in China in the Context of Globalisation. Studies in Social Science & Humanities, 1(3), pp.39-56. Web.

Zhu, X. (2022) Core Competitive Strategies in Sport Product Market. In 2022 second International Conference on Enterprise Management and Economic Development (ICEMED 2022) (pp. 318-322). Atlantis Press. Web.

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