Lululemon Case Study

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Lululemon has seen tremendous success with their ability to sell high quality athletic apparel. I would say that the competition between the producers of athletic ware is in between moderate and fierce. Lululemon has a large competitive base, which include Nike, Adidas, Under Armour, Zella, and Athleta. With the success that Lululemon has achieved, many other competitors want to jump on the possibility of making more profit for their companies. To fight these rivalries, Lululemon has created a stronger brand image. I personally see many people carrying around the durable Lululemon bags, which many use for carrying their lunches or personal belongings. Also, Lululemon designs “showrooms” which create a stronger brand image and make the store more associated with the community. They also use higher quality material to make their products more durable, comfortable, and better soak up sweat. One thing that Lululemon is lacking, are the prices. Many other brand names are able to sell their products far less bellow. Athleta and Zella priced their similar items 10% to 20% …show more content…
Luon produces about 30% of fabric for Lululemon’s athletic ware. There are five companies, that when combined, produce over 65% of Lululemon’s fabric. These companies have high quality fabric, which that can dictate the price they want for it. This higher quality material they use cannot be compared to the other cheaply made material used by other companies. I believe that Lululemon cannot just switch manufactures. Also another big factor in supplier bargaining power is that Lululemon cannot backward integrate into the fabric industry. One downside to these manufactures is that they are not locked into a long-term contract. There might be other manufactures that would have better prices and are looking for a contract with Lululemon. It gives Lululemon some flexibility in their
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