DETERMINE IF THE COMPANY HAS A SUSTAINABLE COMPETITIVE ADVANTAGE.Read the case study located on page 283 of the section titled Case Studies in your textbook and prepare a 3- to 4-page report in a Microsoft Word document concerning the following situation:
Read the case study located on page 283 of the section titled Case Studies in your textbook and prepare a 3- to 4-page report in a Microsoft Word document concerning the following situation:
As the end of the year comes to a close, the CEO is evaluating lululemon’s strategic approach and its ability to produce desired results for the company in the future. The CEO has asked you to prepare a report assessing the company’s current situation, reviewing its strategy, and making recommendations to maximize effectiveness.
Your report and overview should address the following key strategic issues: •Establish criteria for judging strategic performance by considering successes and strategies. Use a balanced scorecard framework to make sure that both financial and strategic controls are used to assess performance. •Define the company’s core competencies. •Determine if the company has a sustainable competitive advantage. If you determine that a sustainable advantage exists, support your claim. If you find it lacking, recommend actions that would secure a sustainable competitive advantage. •Identify any external environmental forces that have future strategic implications for lululemon athletica, Inc. •Determine if lululemon’s business strategy provides an integrated and coordinated set of commitments and actions that are based upon the company’s core competencies, guides behavior toward achieving performance goals, and fits existing external environmental conditions. •Evaluate lululemon’s international strategy and its use of alliances to achieve company objectives. •Discuss the company’s organizational structure and if it effectively supports lululemon’s strategy.
Support your responses with examples.
Cite any sources in APA format. below is the Case Study
CASE 22: Iululemon athletica Inc.
Rachael Fowler ran cross-country and played tennis in high school. In college, she successfully completed two full marathons. After college, she remained active and health conscious. Now a 37-year-old mother of two boys, Rachael maintains her physical fitness through gym sessions with a personal trainer and by attending yoga classes twice a week. At the end of one yoga session, a friend of hers suggested she purchase some yoga apparel from lululemon. Overhearing the two women talk, the class instructor added that she was a lululemon ambassador and began to rave about the quality and style of lululemon’s products.
“This is how 80 percent of our guests come to know lululemon, through word-of-mouth. Guests are so pleased with the clothes we offer that they can’t help but tell all their friends about it,” explains Laci Levisay, a lululemon associate from a store in Austin, Texas.1 Levisay continues, “For the other 20 percent who walk into lululemon stores with no previous knowledge, store employees look to find out as much as possible about the guests’ lifestyle and then educate them on what products would best suit their needs.”
Choose a Positive Thought
Based in Vancouver, Canada, lululemon athletica provides premium quality athletic apparel at a premium price. One of lululemon’s signature items is its yoga pants, typically sold by competitors for between $25 and $50.2 Yoga pants available in lululemon stores and online range between $78 and $128 with its most popular pair priced recently at $98 – two to three times rivals’ prices.3 However, lululemon’s products sell and they sell fast. Demand for lululemon clothing is so high that stores have trouble keeping new lines in stock. Sheree Waterson, Lulu’s chief product officer conveyed this example, saying, “A hot-pink color named ‘Paris Pink’ that launched in December (of 2011) was supposed to have a two-month lifecycle but sold out its first week.”4 The question then arises as to why customers, or “guests” as lululemon refers to them, are willing to pay high prices for high fashion items that are destined to be soaked in sweat!
It seems the answer to this question resides in lululemon’s ability to connect with its guests on a deeper level than just the typical sales associate–customer relationship. After all, other companies such as Nike, Adidas, and Under Armour not only produce high-tech clothing with the same soft cotton feel, four-way stretch, and moisture-wicking technology that lululemon touts, but do so much less expensively for their end consumers. Ultimately, what competitors cannot duplicate is lululemon’s culture. It is lululemon’s deep understanding of its target market, close relationships with its communities, and an inimitable culture that transforms customers/guests into diehard loyalists.
This is not to say that lululemon does not uphold the highest quality standards in its products. Levisay states, “People will save up if they need to in order to afford our clothing because of the benefits they provide.” She goes on to explain, “It’s silly to spend that much on yoga pants if they’re not going to live up to their promise.”5 Jennifer Black, president of an investment research firm confirms this sentiment saying, “lululemon won’t put stuff in its store just to sell it. They don’t compromise on quality.”
Friends Are More Important than Money
lululemon athletica’s in-depth knowledge of its target audience is an important, firm-specific asset. “Rooted in yoga but expanded into any sweaty pursuit you may have, lululemon creates technical fabrics that work with you instead of against you. Plus, they look cute!” explains Levisay. The stores’ “…guests comprise anyone living a physically active life that strives to achieve balance,”7 although the majority of shoppers are female, have disposable income, and are in the 15- to 65-year-old range.8 Fitness blogs confirm that lululemon “…recognizes this niche market and combines high performance material with attractive product design to create a committed brand following.
One of the strongest examples of lululemon’s focus on culture is the company manifesto, which appears on multiple lululemon products, from bags to water bottles. Explaining the company’s perpetuation of its manifesto, Whitney, a store employee and lululemon blogger writes,
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