Lululemon Athletica Harvard Case Solution & Analysis

Evaluation of Day’s leadership (2008-2013)

At the time when Christine Day joined the company, the business model, team and energy of the company looked good on the surface. The strategic model and the directions of the board looked good, and they had to go from the founder to a professionally managed company.

lululemon case solution

lululemon case solution

The period when she joined the company was the one when a bad recession hit the economy, and the years of expansion lead to growing tensions in the organisation. This was because the new professionals brought in didn’t go through the training and orientation, and so couldn’t build key relationships within the company. This led to creating tensions between the internal management and them, which was demotivating the employees and the management team.

The former CEO built the company and set the direction of the company, he made the company public and developed it in Canada and U.S. When she joined, she wanted an opportunity and this was the same opportunity that she was interested it. The Lululemon wanted a CEO who could grow with the culture prevailing in the organization, and so she was selected because she was from Starbucks, a value led organization so she will capture the culture and implement it.

Lululemon prices are high as compared to other brands, due to the quality of its products. The company spends 80% of its costs on providing the best quality to the customers, and so the customers agree to pay high for the products. The company refers to its sales staff as educators and its customers as guests, as the sales staff do not merely do advertising but educate their customers to make them understand their products, and the higher prices it charges. This is the reason they have adopted vertical sales system as compared to the whole selling.

The research and development process relies heavily on the feedback from customers and athletes, and the decisions are based on that feedback. Weekly meetings are conducted to discuss the feedbacks and implement it in the design process. The company recruits yoga instructorsand fitness enthusiasts as product testers. They are called ambassadors and they provide regular feedback to the product development staff and also do the company’s word of mouth marketing.

The company doesn’t focus on good feedbacks but on the bad ones to improve their products. The company has a product call monthly, where design team, field, merchants, production and every other function discusses the issues, and the pros and cons of the products. Considering the feedback has made the brand more famous and successful.

The company along with its focus on fit and function, works also according to the fashion demands, which supports it with street wear as well. The multi-function makes it acceptable in daily life as well.

There are two levels of competition for Lululemon, the first one is the traditional sports competitors who has a wholesale model. Lulu has a competitive advantage over these competitors because of their vertical integration. Although they have a lot more capital involved, but they better target the market as compared to the whole sellers.

The other side of competition is the brands that offer athletic apparel on retail basis. They do have a target market and a customer base, but they do not have the technological advancements that Lulu has, giving Lulu an edge over them.

The company works with certain values that are shared amongst employees and customers, building the company’s image and reputation. When hiring, the company screens the person with respect to its manifesto-the values. Sometimes, many important people decide to work with the company just because of the company’s core values

The company conducts a foundation training for new employees to coverthe company history, culture and most importantly their personal development. They believe this is more important than making money, and leads to better and effective performance by them. The employees are encouraged to develop their own life goals and so to make them accountable for what they do.

The company focuses on the real-estate model before it works on its brand model, so as to focus on the target customers who become money for them. The showroom strategy is also critical for brand awareness. To do this the stores are open only 3 days for sales and other days for cultural activities. This led to higher sales level and immediate return on the capital.......................

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