SWOT Analysis of Lululemon Athletica Inc

Lululemon Athletica is a Canadian designer and retailer dealing in athletic apparels for women, men and girls. Its fitness product line includes Tops, Bottoms and Accessories

Lululemon was founded in the year 1998 by Chip Wilson. According to 2018 report, currently, the company operating 404 stores, out of which 334 are in the United States and Canadian market. It is also operating in Europe, Australia and Asia.

The Lululemon launched Ivivva Athletica in 2009. Ivivva is focused on athletic sportswear for girls 6-14 years of age.Here we will do a swot analysis of Lululemon Athletica Inc. and will understand it strengths weaknesses opportunities and threats in the global market.

Strengths

The important strength of Lululemon is its high-quality products with innovative features and styles. You can find both reliable and fun items (bras, tops, pants with detachable parts and jackets with removable hooks) that amused customers.

Lulu has a customer-centric business model by using input from customers and can reproduce better products according to customers need and wants. This will help tailor their items to the business they are catering to adding to the likelihood of success.

Use community-centred marketing approach to build brand awareness and perform philanthropic activities.

Well trained staff. The company has a cult-like culture in placed and provide free fitness classes for its employees

The loyal customer base is another strength of Lululemon Athletica. According to BusinessInsider.Com people love to come in and shop different products almost in every color.

Lulu Lemon has a strong financial position with the last quarter sales of 928.8 million. The company should capitalize the opportunities.

Weaknesses

Lululemon’s one of the weakness is relatively expensive products. The company has an intensive research and development team for developing high-quality fabric and charge high prices than its competitors like Nike and Under Armour. Since they are targeting high-income women and men, it wouldn’t hurt the business. They can also overcome this weakness with the strength of high-quality products.

Lululemon is considered as yoga brand. Despite the fact it has high-quality products they can be used for other physical activities like running, swimming weightlifting. They need campaigns to aware women and men that Lululemon products are best fit for any physical activity. 

Facing issues in balancing their inventory level which is not good for their business and may lose their loyal customer base.

Opportunities

Lululemon is currently relying on United States market with a 72.2% from US market, 18.6 from Canada and 9.3% outside America and Canada.

Like its competitors Nike and Under Armor, Lululemon is trying to expand its operations into global markets and increase its revenue in the future.

It is committed to increasing its international presence in Asia-Pacific and European markets which has a great growth potential in the coming years. Lulu has already opened 6 stores in China which is a step toward their broader plan. In Europe, the company has already launched a store on Regent Street, London. Besides generating revenue, the store will increase its brand image.

Product innovation is another opportunity of Lulu Lemon. The company has sweat resistance technology and like-nothing pants product, offering reasonable prices and top-quality products, enabled Lulu to compete and beat the competitors at all levels.

The company must avail the potential growth in existing North American market by open new locations will not only increase sales but increase in the brand image.

Lululemon has already relaunched its website in 2017, which positively affected conversion rate and overall customers experience, and the same performance is expected in the coming year.

Threats

These days athletic apparels have highly competitive market. Lulu is already competing with brands like Under Armour, Nike, Gap and Amazon, most of these companies have a broader global presence, lower prices and huger operating budgets.

Nike Inc. and Amazon.com, Inc are strategically targeting lulu niche market.

Changing trend in culture taste and people preferences in another threat.

Lulu Lemon is committed to expanding its intranational presence it must consider government laws and regulation, Tax and interest rate where it is operating.

Towards Conclusion

Lululemon Athletica Inc showed an upward growth especially in the last quarter January 2018 by exceeding its estimated targets.  It was possible due to its strong brand image and expansion in the international market.

Lululemon has a successful business model with made a leading LULU brand in athletic apparels. It has placed well itself in the market. The company is already planning for international expansion in Asia and Europe. It is planning to open 10 to 20 stores in the Asian market.

Though Lulu Lemon Athletica has strong financials, but investors should consider the risk of strong competition, changing consumer trends and dependency of single supplier.

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