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 - – technology disruption, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing energy prices, central banks are concerned over increasing inflation,
wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
Learning organization
- Lululemon Lululemon's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Lululemon Lululemon's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Lululemon Athletica's Product, Employee and Public Relations Issues Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Lululemon Lululemon's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lululemon Lululemon's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Superior customer experience
– The customer experience strategy of Lululemon Lululemon's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Lululemon Athletica's Product, Employee and Public Relations Issues Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
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.
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.
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.
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.
Ability to recruit top talent
– Lululemon Lululemon's is one of the leading recruiters in the industry. Managers in the Lululemon Athletica's Product, Employee and Public Relations Issues are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Lululemon Lululemon's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lululemon Lululemon's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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 -
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 operating costs
– Compare to the competitors, firm in the HBR case study Lululemon Athletica's Product, Employee and Public Relations Issues has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lululemon Lululemon's 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Lululemon Lululemon's supply chain. Even after few cautionary changes mentioned in the HBR case study - Lululemon Athletica's Product, Employee and Public Relations Issues, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lululemon Lululemon's vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Lululemon Lululemon's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Aligning sales with marketing
– It come across in the case study Lululemon Athletica's Product, Employee and Public Relations Issues that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Lululemon Athletica's Product, Employee and Public Relations Issues can leverage the sales team experience to cultivate customer relationships as Lululemon Lululemon's is planning to shift buying processes online.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Lululemon Athletica's Product, Employee and Public Relations Issues, in the dynamic environment Lululemon Lululemon's has struggled to respond to the nimble upstart competition. Lululemon Lululemon's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Lululemon Lululemon's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lululemon Lululemon's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Lululemon Athletica's Product, Employee and Public Relations Issues can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Stefanie Beninger, Simon Pek, Karen Robson, Adam J Mills suggests that, Lululemon Lululemon's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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 -
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lululemon Lululemon's can use these opportunities to build new business models that can help the communities that Lululemon Lululemon's operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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.
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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lululemon Lululemon's is facing challenges because of the dominance of functional experts in the organization. Lululemon Athletica's Product, Employee and Public Relations Issues case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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.
Buying journey improvements
– Lululemon Lululemon's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Lululemon Athletica's Product, Employee and Public Relations Issues suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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.
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.
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.
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 -
Technology acceleration in Forth Industrial Revolution
– Lululemon Lululemon's has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Lululemon Lululemon's needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
Increasing wage structure of Lululemon Lululemon's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Lululemon Lululemon's.
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.
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.
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.
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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Lululemon Lululemon's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Lululemon Lululemon's is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lululemon Lululemon's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Lululemon Athletica's Product, Employee and Public Relations Issues .
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.
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.
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.
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.