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Lululemon Athletica SWOT & PESTLE Analysis

ID : 52691753| Feb 2021| 15 pages

COMPANY PROFILE -Lululemon Athletica

Business Sector :Athletic apparel retail

Operating Geography :Canada, North America

About Lululemon Athletica :

Lululemon Athletica sells technical apparel for yoga, running, training and other athletic pursuits. The company was founded in 1998 with headquarters in Vancouver, Canada. It was founded with a vision to create a community for people to learn and discuss healthy living, mindfulness and living a life of possibility. The company desires to empower people in reaching their full potential by providing the right resources and tools. Core values are: quality, balance, integrity, product, entrepreneurship, fun and greatness. It has won the 2019 Forbes Retailer of the year award, defeating Walmart and Target. The company has approx.19,000 employees as of February 2020.
Under the brand name Lululemon, the company offers a wide range of healthy lifestyle inspired athletic apparel and fitness-related accessories for both women and men. Lululemon's apparel collection incorporates pants, shorts, tops, and jackets suitable for athletic pursuits like yoga, running, training, gym, and other sweaty activities. These apparels are designed and developed with technically advanced fabrics and crafted with innovative functional features.
In order to cater to the diverse needs and shopping desires of Lululemon's customers, the company operates in both physical and digital space via its two major business channels namely, company-operated stores and direct to consumer. As of Feb 2020, Lululemon's retail footprint included 491 company-operated stores which forms the largest source of revenue. Besides, 28.6% of Lululemon's net revenue by the end of 2019 fiscal year is generated from its e-commerce platform, which constitutes a substantial part of lululemon's business model.
Lululemon mission statement is “to elevate the world by unleashing the full potential within every one of us.” Lululemon Athletica’s a vision is to be - The experiential brand that ignites a community of people through sweat, grow, and connect, which we call "living the sweatlife."Driven by its vision, Lululemon's USP or Unique Selling Proposition sprawls in being a popular athletic apparel brand rendering a combination of performance, style, and sensation in its athletic apparel to inspire people to engage in yoga and other pursuits for a better and healthy lifestyle.

Lululemon Athletica Revenue :


$3.29 billion (FY ending February 2, 2020) (YoY growth 21%)
$3.29 billion (FY ending February 3, 2019) (YoY growth 24%)
$2.65 billion (FY ending January 28, 2018) (YoY growth 13%)
$2.34 billion (FY ending January 29, 2017)

Competitive Analysis of Lululemon Athletica

SWOT
PESTLE
Lululemon Athletica is a designer, distributor, and retailer of healthy lifestyle inspired athletic apparel and accessories. The company's key market strategy focuses on consumer buying decisions that are inspired by both a tangible need for useful products and a passion to live a particular lifestyle. Thus, Lululemon offers a combination of performance, fashion, and sensation in their athletic apparel allowing the consumers to buy from a wide range of products that fit and feel great irrespective of the kind of exercise. Hence, SWOT tool is essential to identify more such strategies and initiatives taken up by the company in order to attain a competitive advantage. Following is the analysis of all the pertinent internal and external strategic factors of Lululemon Athletica that contribute to the trajectory growth of the company. The SWOT Analysis of Lululemon Athletica illustrates the company's key strengths and opportunities from its external environment that can be consolidated to further strengthen the company. The report also manifests intelligence on Lululemon Athletica's internal weaknesses and external threats that can cripple its growth.
Increasing awareness and importance of yoga, high level of customer engagement, collaboration with fashion designers to expand the product line, product quality, practical yet stylish apparel, precise market strategy, focused on targeting the niche, etc. are few amongst many strengths of Lululemon Athletica. Despite all the quintessential strengths of Lululemon, the company faces trouble from some of its inherent weaknesses like limited global penetration, limited margin, and low brand recall compared to global competitors. The athletic apparel industry is witnessing immense growth due to trending desire for a better, healthy, and active lifestyle amongst almost all demographics and particularly women. This brings in a great growth and expansion opportunity for Lululemon to approach and penetrate emerging nations. Highly fragmented industry, a huge competition, fight for market share, constantly changing fashion trends, availability of cheap and fake products, etc. are the business threats that subsist in Lululemon's macro environment.
The SWOT analysis for Lululemon Athletica is presented below in a matrix followed by detailed analysis:
Strengths
Weaknesses
1. Market leader in yoga and workout clothing for women in North American markets
2. Control of both production and distribution aiding margins and customer loyalty
3. Strong operational performance and goal delivery ahead of schedule
4. Niche focus that enables sale of high demand products at premium price
5. ‘Power of three’ strategic plan for growth
6. Leveraging the power of communities for marketing
1. Weakening retail base in USA
2. Association of brand with women’s clothing despite increasing focus on men’s wear
3. High dependency on a small number of suppliers
4. Series of controversial remarks and scandals by CEOs
Opportunities
Threats
1. Athleisure becoming a mainstream trend across the world
2. Growing health and fitness market in Europe
3. Expanding reach through collaboration
4. Category expansion in women’s core segment and accessories through solving unmet needs
1. High competition from established players and new entrants
2. Reduction in discretionary spending due to economic downturns
3. Inability to anticipate consumer preferences
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Detailed SWOT Analysis of Lululemon Athletica

 

Strength

1. Market leader in yoga and workout clothing for women in North American markets: Lululemon has achieved market leader position in yoga and work out clothing for women in the North American market. The company is credited as the pioneer of the athleisure apparel trend that has seen huge growth in recent years. Since Lululemon sold the first pair of yoga pants in 1998, it has come a long way, riding the athleisure trend and posing a serious threat to the jeans industry in the process. People have started wearing yoga pants even to the office, which has increased the usage of Lululemon’s products. The company invests a significant amount of money to develop new fabrics trademarked fabrics for fending off rivals. The Luon fabric was trademarked in USA in 2005. The newer fabrics developed by the company like Luxtreme, Nulux and Silverescent are branded and geared for specific uses.

2. Control of both production and distribution aiding margins and customer loyalty: Lululemon is able to enjoy expanded margins and new opportunities because of its control over both production and distribution. Lululemon has avoided the common retail practice of selling its product in department stores. This has helped build customer loyalty and gave the company better control over discounts, pricing and marketing. In contrast, companies selling through third parties have to share margins. Lululemon sells high margin apparel, priced at $100 or more, through physical stores as well as on the website. In 2019, the physical stores contributed 62% of the revenue whereas 28% of revenue came from the website.

3. Strong operational performance and goal delivery ahead of schedule: The company delivered strong operating results in 2018, with revenue increasing by 24% and adjusted earnings per share increasing by 48%. Gross margin was 55.2%, e-commerce penetration was 26% and operating margin was 21.5%. This growth was driven by multiple successful initiatives like store openings in new and existing markets across the world, strong performance in China, positive customer response to product innovations and strong digital platforms. Many of the goals set for target 2020 were met ahead of schedule, setting the stage for a new five-year vision for the future. In 2019, the company continued its growth. Revenue grew by 21%. Operating margin increased by 80 basis points to 22.3% and earnings per share grew by 37%.

The remaining section of “Strength” is available only in the 'Complete Report' on purchase.

Weakness

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Opportunity

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Threat

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Major Competitors :

Major Brands :

  • Lab
  • Lululemon
SWOT & PESTLE (combined)
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The Amazon SWOT and PESTLE Analysis report will offer the following:
  • The SWOT and PESTEL analysis report of Lululemon Athletica manifests a discussion on the intricate internal and external factors concerning Lululemon Athletica's brand, its operations, business model, market strategy, and growth trajectory.
  • The SWOT analysis evaluates the strengths and opportunities that Lululemon Athletica endures and strategies instated by the company to eliminate its weaknesses and threats in its operating external environment
  • The report confers intelligence on the external analysis, comprising the opportunities - low hanging fruits which can be harvested to achieve further growth and expansion and some pertinent threats that threaten to hinder the growth of the company
  • The Report covers compelling initiatives that were taken by Lululemon Athletica, to stay ahead of its competitors and adversaries and attain a competitive edge in the industry.
  • The PESTLE analysis of the Athletic Apparel Industry helps to distinguish the factors that compel and restrain the market.
  • The PESTLE/ PEST/ STEEPL Analysis for in-depth analysis of all external factors specifically, political, economic, social, technological, legal and environmental, highlighting their consequence on Lululemon Athletica's business model, marketing and growth strategy
  • Abstract information on Lululemon Athletica's business diversification, deriving its key business segments and highlighting its major competitors
  • A concise window into Lululemon Athletica’s headquarters, turnover, revenue, and subsidiaries. This is followed by a comprehensive company analysis to obtain perspicacity into company information, company profile, business model, business plans and marketing strategy
  • Analysis of Lululemon Athletica's market position, mergers and acquisitions, strategic partnerships and alliances, that the company endorsed, and the business aims or synergies that were achieved with them
  • Interpretation of Lululemon Athletica USP or unique selling proposition, mission statement, and vision statement. With a peek into Lululemon Athletica's key success factors, performance indicators, core values, value propositions, and core competencies.
  • Discussion on Lululemon Athletica's business model, extending to the analysis of key business segments and business case study
     
References used in Lululemon Athletica Analysis Report

1. Lululemon Athletica 2019 Annual Report - https://investor.lululemon.com/index.php/static-files/8df91f4d-25a1-4e69-8b94-606f9c370440

2. Annual report 2018 - http://investor.lululemon.com/static-files/2ae3c99b-e92f-4bd6-aa73-e46f6bce7166

3. Athleisure Market Outlook – 2026 - https://www.alliedmarketresearch.com/athleisure-market

4. lululemon athleisure company profile - https://www.reuters.com/companies/LULU.O

The detailed complete set of references are available on request in the 'Complete report' on purchase.

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SWOT & PESTLE.com (2021). Lululemon Athletica SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/lululemon-athletica/ [Accessed 18 Apr, 2021].

In-text: (SWOT & PESTLE.com, 2021)

Copyrights and Disclaimer

Lululemon Athletica SWOT and PESTLE analysis has been conducted by Nipunn V and reviewed by senior analysts from Barakaat Consulting.

Copyright of Lululemon Athletica SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

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