Lululemon Athletica Inc. - Moving Forward With Humility SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Lululemon Athletica Inc. - Moving Forward With Humility
On March 27, 2014, the new chief executive officer of Lululemon Athletica Inc., headquartered in Vancouver, British Columbia, has just announced the previous year's flat fourth quarter results. These unimpressive financial figures have amplified the need to address the company's damaged reputation. In 2013, the apparel brand faced a product recall and a public relations backlash after a controversial interview and botched apology by its founder, as well as the resignation of several key executive employees. A communications strategy must be devised to repair the company's reputation and regain the trust of both investors and customers.
Swot Analysis of "Lululemon Athletica Inc. - Moving Forward With Humility" written by Mary Weil, Julia Cutt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Athletica Lululemon facing as an external strategic factors. Some of the topics covered in Lululemon Athletica Inc. - Moving Forward With Humility case study are - Strategic Management Strategies, Corporate governance, Public relations and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Lululemon Athletica Inc. - Moving Forward With Humility casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, increasing commodity prices, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies,
talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Lululemon Athletica Inc. - Moving Forward With Humility
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Lululemon Athletica Inc. - Moving Forward With Humility case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Athletica Lululemon, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Athletica Lululemon 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 Inc. - Moving Forward With Humility can be done for the following purposes –
1. Strategic planning using facts provided in Lululemon Athletica Inc. - Moving Forward With Humility case study
2. Improving business portfolio management of Athletica Lululemon
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 Athletica Lululemon
Strengths Lululemon Athletica Inc. - Moving Forward With Humility | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Athletica Lululemon in Lululemon Athletica Inc. - Moving Forward With Humility Harvard Business Review case study are -
Effective Research and Development (R&D)
– Athletica Lululemon 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 Inc. - Moving Forward With Humility - 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
– Athletica Lululemon 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 Inc. - Moving Forward With Humility HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Athletica Lululemon 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 Athletica Lululemon is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Lululemon Athletica Inc. - Moving Forward With Humility Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Sales & Marketing field
– Athletica Lululemon 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 Athletica Lululemon in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Athletica Lululemon is one of the most innovative firm in sector. Manager in Lululemon Athletica Inc. - Moving Forward With Humility Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Athletica Lululemon has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Lululemon Athletica Inc. - Moving Forward With Humility Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Athletica Lululemon is present in almost all the verticals within the industry. This has provided firm in Lululemon Athletica Inc. - Moving Forward With Humility 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Athletica Lululemon digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Athletica Lululemon 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.
High brand equity
– Athletica Lululemon has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Athletica Lululemon to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Athletica Lululemon in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Athletica Lululemon is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Mary Weil, Julia Cutt can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Athletica Lululemon is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Lululemon Athletica Inc. - Moving Forward With Humility | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lululemon Athletica Inc. - Moving Forward With Humility are -
Need for greater diversity
– Athletica Lululemon 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.
Slow to strategic competitive environment developments
– As Lululemon Athletica Inc. - Moving Forward With Humility HBR case study mentions - Athletica Lululemon 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Athletica Lululemon 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.
Capital Spending Reduction
– Even during the low interest decade, Athletica Lululemon 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Athletica Lululemon is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Lululemon Athletica Inc. - Moving Forward With Humility 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Lululemon Athletica Inc. - Moving Forward With Humility 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 Athletica Lululemon has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Lululemon Athletica Inc. - Moving Forward With Humility, is just above the industry average. Athletica Lululemon 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Lululemon Athletica Inc. - Moving Forward With Humility 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 Athletica Lululemon 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Athletica Lululemon has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Athletica Lululemon even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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 Athletica Lululemon supply chain. Even after few cautionary changes mentioned in the HBR case study - Lululemon Athletica Inc. - Moving Forward With Humility, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Athletica Lululemon vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Athletica Lululemon products
– To increase the profitability and margins on the products, Athletica Lululemon needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Lululemon Athletica Inc. - Moving Forward With Humility | 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 Inc. - Moving Forward With Humility are -
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. Athletica Lululemon can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Athletica Lululemon to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Low interest rates
– Even though inflation is raising its head in most developed economies, Athletica Lululemon 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.
Developing new processes and practices
– Athletica Lululemon 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Athletica Lululemon in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Athletica Lululemon 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.
Loyalty marketing
– Athletica Lululemon 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.
Building a culture of innovation
– managers at Athletica Lululemon 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 Athletica Lululemon to increase its market reach. Athletica Lululemon 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Athletica Lululemon can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Athletica Lululemon can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Athletica Lululemon can use these opportunities to build new business models that can help the communities that Athletica Lululemon operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Creating value in data economy
– The success of analytics program of Athletica Lululemon has opened avenues for new revenue streams for the organization in the industry. This can help Athletica Lululemon to build a more holistic ecosystem as suggested in the Lululemon Athletica Inc. - Moving Forward With Humility case study. Athletica Lululemon can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Athletica Lululemon can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Lululemon Athletica Inc. - Moving Forward With Humility 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.
Threats Lululemon Athletica Inc. - Moving Forward With Humility 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 Inc. - Moving Forward With Humility are -
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. Athletica Lululemon can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Athletica Lululemon in the Sales & Marketing sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Athletica Lululemon 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.
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 Athletica Lululemon business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Athletica Lululemon 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 Inc. - Moving Forward With Humility .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Athletica Lululemon 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.
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. Athletica Lululemon 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.
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.
Stagnating economy with rate increase
– Athletica Lululemon can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Regulatory challenges
– Athletica Lululemon 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Athletica Lululemon with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Athletica Lululemon is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Lululemon Athletica Inc. - Moving Forward With Humility 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 Inc. - Moving Forward With Humility 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 Inc. - Moving Forward With Humility 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 Inc. - Moving Forward With Humility 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 Inc. - Moving Forward With Humility 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 Athletica Lululemon needs to make to build a sustainable competitive advantage.
