Lululemon Athletica's Product, Employee and Public Relations Issues SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Lululemon Athletica's Product, Employee and Public Relations Issues
Lululemon, a successful yoga and athletic apparel company, faced a number of controversies notably those surrounding comments made by the founder and regarding employee and public relations. Many of these controversies seem out of line with Lululemon's Manifesto, a one-page collection of sayings that guide the company's actions. These issues culminate with issues regarding one of their most popular products, resulting in a product recall in 2013. As Lululemon enters 2014, facing drops in their share price and a revenue growth below expectations, Lululemon's new CEO has to make some decisions about the best way forward for the company. The authors are affiliated with Simon Fraser University.
Authors :: Stefanie Beninger, Simon Pek, Karen Robson, Adam J Mills
Swot Analysis of "Lululemon Athletica's Product, Employee and Public Relations Issues" written by Stefanie Beninger, Simon Pek, Karen Robson, Adam J Mills includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lululemon Lululemon's facing as an external strategic factors. Some of the topics covered in Lululemon Athletica's Product, Employee and Public Relations Issues case study are - Strategic Management Strategies, Ethics, Public relations and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Lululemon Athletica's Product, Employee and Public Relations Issues casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies,
increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Lululemon Athletica's Product, Employee and Public Relations Issues
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Lululemon Athletica's Product, Employee and Public Relations Issues case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lululemon Lululemon's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lululemon Lululemon's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Lululemon Athletica's Product, Employee and Public Relations Issues can be done for the following purposes –
1. Strategic planning using facts provided in Lululemon Athletica's Product, Employee and Public Relations Issues case study
2. Improving business portfolio management of Lululemon Lululemon's
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lululemon Lululemon's
Strengths Lululemon Athletica's Product, Employee and Public Relations Issues | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lululemon Lululemon's in Lululemon Athletica's Product, Employee and Public Relations Issues Harvard Business Review case study are -
Strong track record of project management
– Lululemon Lululemon's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Lululemon Lululemon's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Lululemon Athletica's Product, Employee and Public Relations Issues HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Lululemon Lululemon's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Innovation driven organization
– Lululemon Lululemon's is one of the most innovative firm in sector. Manager in Lululemon Athletica's Product, Employee and Public Relations Issues Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Lululemon Lululemon's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Diverse revenue streams
– Lululemon Lululemon's is present in almost all the verticals within the industry. This has provided firm in Lululemon Athletica's Product, Employee and Public Relations Issues case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Lululemon Lululemon's in the sector have low bargaining power. Lululemon Athletica's Product, Employee and Public Relations Issues has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lululemon Lululemon's to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Sales & Marketing industry
– Lululemon Athletica's Product, Employee and Public Relations Issues firm has clearly differentiated products in the market place. This has enabled Lululemon Lululemon's to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Lululemon Lululemon's to invest into research and development (R&D) and innovation.
Organizational Resilience of Lululemon Lululemon's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lululemon Lululemon's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Sales & Marketing field
– Lululemon Lululemon's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Lululemon Lululemon's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Lululemon Lululemon's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Lululemon Athletica's Product, Employee and Public Relations Issues - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Lululemon Lululemon's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lululemon Lululemon's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Lululemon Athletica's Product, Employee and Public Relations Issues | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lululemon Athletica's Product, Employee and Public Relations Issues are -
Low market penetration in new markets
– Outside its home market of Lululemon Lululemon's, firm in the HBR case study Lululemon Athletica's Product, Employee and Public Relations Issues needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Lululemon Athletica's Product, Employee and Public Relations Issues, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to strategic competitive environment developments
– As Lululemon Athletica's Product, Employee and Public Relations Issues HBR case study mentions - Lululemon Lululemon's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Lululemon Athletica's Product, Employee and Public Relations Issues, is just above the industry average. Lululemon Lululemon's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Skills based hiring
– The stress on hiring functional specialists at Lululemon Lululemon's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Lululemon Athletica's Product, Employee and Public Relations Issues, it seems that the employees of Lululemon Lululemon's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Increasing silos among functional specialists
– The organizational structure of Lululemon Lululemon's is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Lululemon Lululemon's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lululemon Lululemon's to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Lululemon Athletica's Product, Employee and Public Relations Issues HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Lululemon Lululemon's has relatively successful track record of launching new products.
Need for greater diversity
– Lululemon Lululemon's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Lululemon Lululemon's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Lululemon Lululemon's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Lululemon Athletica's Product, Employee and Public Relations Issues should strive to include more intangible value offerings along with its core products and services.
Opportunities Lululemon Athletica's Product, Employee and Public Relations Issues | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Lululemon Athletica's Product, Employee and Public Relations Issues are -
Leveraging digital technologies
– Lululemon Lululemon's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Lululemon Lululemon's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lululemon Lululemon's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Learning at scale
– Online learning technologies has now opened space for Lululemon Lululemon's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Building a culture of innovation
– managers at Lululemon Lululemon's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Better consumer reach
– The expansion of the 5G network will help Lululemon Lululemon's to increase its market reach. Lululemon Lululemon's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Lululemon Lululemon's can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Lululemon Lululemon's can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Loyalty marketing
– Lululemon Lululemon's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lululemon Lululemon's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Lululemon Lululemon's to hire the very best people irrespective of their geographical location.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Lululemon Lululemon's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Lululemon Lululemon's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Lululemon Athletica's Product, Employee and Public Relations Issues - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lululemon Lululemon's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Lululemon Lululemon's has opened avenues for new revenue streams for the organization in the industry. This can help Lululemon Lululemon's to build a more holistic ecosystem as suggested in the Lululemon Athletica's Product, Employee and Public Relations Issues case study. Lululemon Lululemon's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Lululemon Athletica's Product, Employee and Public Relations Issues External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Lululemon Athletica's Product, Employee and Public Relations Issues are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Lululemon Lululemon's.
High dependence on third party suppliers
– Lululemon Lululemon's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Regulatory challenges
– Lululemon Lululemon's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Lululemon Lululemon's business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Lululemon Lululemon's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Lululemon Lululemon's in the Sales & Marketing sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lululemon Lululemon's in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Lululemon Lululemon's needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Lululemon Lululemon's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Lululemon Lululemon's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Lululemon Lululemon's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Lululemon Lululemon's can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of Lululemon Athletica's Product, Employee and Public Relations Issues Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Lululemon Athletica's Product, Employee and Public Relations Issues needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Lululemon Athletica's Product, Employee and Public Relations Issues is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Lululemon Athletica's Product, Employee and Public Relations Issues is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Lululemon Athletica's Product, Employee and Public Relations Issues is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Lululemon Lululemon's needs to make to build a sustainable competitive advantage.
