Does the company try to achieve competitive advantage through differentiation or low cost?
Lululemon is a company that is based in Vancouver, Canada. It specializes in the manufacture and sale of sportswear (Kowitt & Leahey, 2013). The company has adopted the differentiation strategy as a means of achieving its competitiveness. Its aim is to address the needs of sportspersons. The company is known by athletes because it produces special attire that meets their various needs (Pride & Ferrell, 2012).
If the company’s strategy involves differentiation, specify the attribute(s) that differentiates its products
The main attribute that differentiates the company is its product features. Lululemon produces products that have special features that address the needs of athletics people. It is able to produce light clothes, as well as clothes that absorb sweat and make the athletes comfortable. It should also be noted that the company is able to produce customized clothes that contain the features that are requested by specific clients. This is its major attribute that differentiates its products.
Lululemon’s market scope
The target customers need to be considered carefully during marketing. Any company will only be able to succeed in the market if it is able to identify its target customers. However, there are organizations that serve broad markets. Such organizations produce goods that meet the needs of various customers. Lululemon is an organization that has a well-defined market niche because it does not address a broad market. Instead, it focuses mostly on athletes and sportsmen. These are its main clients, who it strives to meet their needs globally because it has operations in various countries (“lululemon athletica inc.”, 2014).
If the company’s market scope is focused, specify its narrowly defined mix of customers and products
The company has a defined market niche and a precise market scope. Its mix of customers includes different sportspersons, mostly those who take part in athletics. Its products are mainly sports clothes, sports shoes, as well as other sports related items and clothing. It sells sports attire for women and men, as well as children.
Lululemon’s current grand strategies
The grand strategy for the company has been to expand its operations to other nations, as well as open more retail shops in nations where it is already established. In doing so, the company has recently sold its shares to the public in a bid to raise more capital. Its major objective is to increase its competitiveness in the industry that is already dominated by some of the most known organizations, such as Nike among others. The company hopes to expand its market niche as well (Carrillo et al. 15).
If the company is pursuing several grand strategies at the current time, which one(s) take priority?
The main priority is to expand its operations through the opening of new stores in other areas so that it can reach more customers. This is the immediate strategy that will then be followed by the expansion of the market niche, where the company will be producing clothing for other categories of customers.
How well Lululemon’s current strategy is working
The company’s strategy is working well because Lululemon has the financial ability to expand its operations. The company also has an able management and employees who can provide sufficient human capital. However, it has been facing quality issues and has been criticised regarding the same. This is a factor that might deter its strategy (Carrillo et al. 17).
Based on the internal analysis, identify any current performance problems
The major performance problem that the company is facing at the moment is the issue of quality. This could be due to the fact that it has not embraced technology enough, thereby limiting its innovativeness.
Ways in which this strategy helps/hinders the company in addressing the strong forces in its industry
The external environment presents the company with a very stiff competition from the already established companies, such as Nike, Adidas, and Puma, among others (Tsang et al. 5). This affects Lululemon’s strategy because it has to struggle to get a larger market share that is already acquired by the competitors.
Threats and opportunities relevant to the company’s future
The major threat that faces Lululemon’s future is the stiff competition the company faces from other companies in the same line of business. However, it has an opportunity of surviving into the future because the world of sports is growing every day, thus the company can grow with it. Lululemon can also employ technology to increase its innovativeness and quality of products. Expanding its market niche is also an opportunity it can explore to ensure sustainability.
Major strategic issues that are facing Lululemon
One of the major strategic issues that the company is facing is expanding its operations through opening more stores (Kowitt & Leahey, 2013). Expanding will help Lululemon reach more customers. In addition, expanding its market niche will be important for its growth.
Viable strategic options for Lululemon
The company might choose to adopt a cost leadership strategy as an option. This will entail lowering the cost of its products to be able to reach the mass market. Lululemon will, therefore, have to find ways of lowering its operations and production costs.
Strategic recommendations for Lululemon
It is recommendable for the company to expand its market niche to also produce clothes for other customers who are not in sports. It should also lower the costs so that it can adopt both the differentiation strategy and the cost leadership strategy.
Works Cited
Carrillo, Chris, John Choi, Sarah Kabacinski, JongKil Shin, and David Zhang. Lululemon Athletica: Zen Innovator, n.d. Web.
Kowitt, Beth, and Colleen Leahey. “Lululemon: In an Uncomfortable Position.” Fortune 168.5 (2013): 110. Business Source Premier. Web.
“Lululemon Athletica Inc. SWOT Analysis.” Lululemon Athletica Inc. SWOT Analysis (2014): 1-8. Business Source Premier. Web.
Pride, William, and Charles Ferrell. Foundations of Marketing (5th edition). Mason, OH: South-Western Cengage Learning, 2012. Print.
Tsang, Jade, Julie Chu, Matt Pothecary, and Morgan Chung. Lululemon Athletica, n.d. Web.