Strategic Management for Making Profit in the Market

Discuss about the Strategic Management for Making Profit in the Market.

Introduction

Every business has an aim of making profit in the market and becoming a success. In the current competitive business world, there needs to be a strategic management that a company setts and follows so as to become among the sustainable and successful organizations. Lululemon, a company dealing in sportswear, appears to be having a management that is conscious of making profits and also sustainability in the market. Being strategic is one key benefit that a company would enjoy and definitely count the fruits of the management. The administration management of the Lululemon is seen to acknowledge the fact that sustainability needs one o be strategic in planning. Other than offering the athletic related commodities, the business is also out offering the customers with the complimentary in-store yoga session conducted by instructors. There is also a guest education center acting as a forum for the customers to offer feedback to the corporation and also raise any questions regarding the products and services. In this discussion, the main theme will be looking into the strategic management of Lululemon that is making the company count among the successful athletic stores around the world.

Lululemon’s Competitive Environment

To become successful in the competitive market, Lululemon has shown a lot of potential in its business operations. It is a business entity that holds over 200 stores around the world increasing its brand name and recognition among the target market. Most of the strength by the enterprise is lying on the company’s culture and can be seen in the mission and vision statements of the company. The business has shown a lot of success driven by the executive customer service that focuses on the satisfaction of the clients. The staff and entire employees in the business are ambassadors to an outstanding culture of the organization. The success of the company is seen to depend on the ability to maintaining the value and the reputation of the brand (Sadler & Craig, 2003).

Being in the sports industry, the company is facing a lot of competition from the rivals such as Adidas and Under Armour. These are the companies that are posing a business threat to Lululemon giving the management of the company extra fatigue in run to a sustainable advantage. To its advantage, Lululemon athletic has products that are geared and aimed towards the active women that are pursuing healthy lifestyle (Seijts, 2013). The management believes in their strategic management and they trust that their unique products that are incorporating style, a technical quality and a high functionality are offering a better choice to its target market. The company is also known to offer apparel lines for both men and girls. In the context of the girls, there is a category of a separate brand that is operating separate entity with their retail shops. Although the company is facing some controversies and uncertain futures, it is still searching for successor to Christine day and new expansion plans. The powerful marketing grassroots by the company is also seen to be paving way to the growth of the business to the territories that are uncharted. The stiff competition is not far and the company is expected to act quickly in the race to maintaining the position in the competitive market (Plunkett & Plunkett Research, 2014).                                                                                                                           

Capabilities and Core Competences

The company has shown global strategy in the international market. It has very many capabilities that can be seen through the many activities the company is involved in. One capability displayed by Lululemon is the outbound logistics where the company is incorporating inventory management systems. The system supports the distribution of limited amount of certain designs to the outlets creating a scarcity for their products and as such, the customers are enticed to purchase the products quickly (Giovanni & Stefano, 2016). Another capability that has been displayed by the company is in terms of the marketing and sales strategy. The use of the community based adverts as a way of marketing has increased the identity of the brand and also enhances the loyalty of the clients. At a glance, the organization is seen to be involved in the building of the local networks that is achieved through the initiation of activities as the sponsored events and the in-store lessons. In the context of services by the company, there is the yoga sessions and education sessions falling under Lululemon’s capabilities. Other than offering the athletic related commodities, the business is also out offering the customers with the complimentary in-store yoga session conducted by instructors. There is also a guest education center acting as a forum for the customers to offer feedback to the corporation and also raise any questions regarding the products and services (Thompson & Martin, 2010).

Among the core competences of the company include the strong relationship with the customers. The strong loyalty it maintains with the clients allows the business to retain the customers and earn more market power against the competitors in the market. The relationship appears to be quite difficult to imitate due to the complexity involved in the bond to the customers and the value of the feedback. In terms of the products and the quality of the design, the high reliability results in the brand recognition among the clients. The company has put in place an intellectual property rights with its suppliers that ensures that the product design of the company are unique. Also, the institution uses the feedback from the customers that is hard to imitate considering that the competitors are not having the same loyalty from the company (Gabriel, 2014).

Trends and Conditions in External Environment

Lululemon is classified under the apparel and accessories industry that has many companies involved in the manufacturing of clothing. There is a strong bi-modal size distribution that is full of large firms and other small firms. The competitive advantage seen in the industry is seen in the brand and performance. The company’s brand carries strong messages with them including beliefs on the culture of their products. The innovation found in the industry is found in the better performance and the awesome products that are as well building the brand. In the industry, the products are highly differentiated and customized as various firms are coming up with different products targeting wide market niches and end users. The growth process in the industry appears to be driven by the segmentation where the different firms in the industry are developing their products and brands targeted to increasingly more fine and disaggregated consumers. Lululemon is an enterprise that does not have any true clients as they are in the market selling everything out of their own stores (Hannah, McCarthy, & Kietzmann, 2015).

Beyond their apparel stores, the company has other partnerships that have gyms and studios where customers are being taught yoga or Pilates. The number of the company stores from all over the world increased from 211 in 2013 up to 254 in 2014. Here are also entry barriers in the industry that the company had to face and battle. One is the products and distribution where every company in the business was expected to be capable of producing enough commodities that would meet the market demand in all their stores any upcoming companies would be challenged to matching the total products put out in the market. Another is the design patents where when considering products like the yoga pants, there are certain designs that can be patented by other companies (Holton, 2014). In relation to the brands, the importance relied on the area where one tried to get into the market. In the segmented market, the customers are said to be buying both the quality and the brand name of the company that they recognize and have a lot of trust. The substitutes of Lululemon are seen to include the apparel outside athletics. The cultural trends have been showing an increase in the acceptance of yoga pants (Hitt et al., 2007).

Advantages of Lululemon’s Business Level Strategy

The main business level strategy that has been employed by the company is that of differentiation. It has been done through the offering of the first unique fabric and their signature has also paved way for the offering of the high quality and performance that will be available to the customers at a premium offer. The current differentiation strategy that is being affected at the business stress around the world is inclusive of the research and differentiation of the new, innovative commodities and the fabric and technology that is designed for highly specific activity. While the company initiated the differentiation strategy, the focus was to be on the creation and delivery of the technical apparel that targeted a specific segment in the market, yogis, that is a practitioner of yoga (Springsteel, 2013). As Lululemon continued with the adopted focus on the strategy, there was an increase spotted in the company’s product line that expanded to also include the runners and the rest of the multi-sport practitioners. The shift in the strategy came about as a result of the success in the first store. The strategy has been seen to be highly supportive of the mission and vision statement of the company. Through the creation of the products that are allowing the customers to participate and feel good about their inclusive in the exercise and their physical activity. The company has been out living up to the core values that aimed at the promotion of the healthy and active lifestyle as well as making healthy living choices (Thomas & Peters, 2015).

Challenges and Recommendations

Challenges

The company has faced many challenges aside from the many controversies it has faced over the last few years. Sometime in 2013, Lululemon recalled the core products in the market, “the black yoga pants,” terming them to be sheer products in the market. According to the information from the management of the company, some of the female clients were never fit enough and that they were stretching the fabrics too much (Muthu, 2014). The blame was them thrown at one of the suppliers for sheer quality textile who in turn responded claiming that al the shipments to Lululemon were passing through a strict certification process that was to be approved by Lululemon. In the process of the recovery, the excuse it issued, that was termed insincere, ruined the reputation of the company. A large percentage of the company was recalled at a higher cost. Other companies that entered the market have a slice of the shares that were owned by Lululemon with the same products at lower prices (Stalk & Butman, 2008).

Recommendations

In the race to regaining the fame and recognition in the market, the company bounced back from the rough patch and announced the plans it had towards revamping and expanding its assorted signature products. The new pants are expected to be classified according to how they are appearing on the body. There are growth plans by the company that are expected to create and an opening for new markets for the company. Investors in the business are advised to be all eyes on the risks that are bound to result from the competition and the potential supplier issues (Hitt, 2016).

Conclusions

In the current competitive business world, there needs to be a strategic management that a company setts and follows so as to become among the sustainable and successful organizations. The administration management of the Lululemon is seen to acknowledge the fact that sustainability needs one o be strategic in planning. Being in the sports industry, the company is facing a lot of competition from the rivals such as Adidas and Under Armour. These are the companies that are posing a business threat to Lululemon giving the management of the company extra fatigue in run to a sustainable advantage. The company has shown global strategy in the international market. It has very many capabilities that can be seen through the many activities the company is involved in. Other than offering the athletic related commodities, the business is also out offering the customers with the complimentary in-store yoga session conducted by instructors. In terms of the products and the quality of the design, the high reliability results in the brand recognition among the clients. The company’s brand carries strong messages with them including beliefs on the culture of their products. Beyond their apparel stores, the company has other partnerships that have gyms and studios where customers are being taught yoga or Pilates.

References

Hitt, M. A. (2016). Strategic management: concepts and cases. [Place of publication not identified], South-Western.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2007). Strategic management: competitiveness and globalization; [concepts and classes]. Mason, Ohio [u.a.], Thomson South-Western.

Sadler, P., & Craig, J. C. (2003). Strategic management. London, Kogan Page.

Thompson, J. L., & Martin, F. (2010). Strategic management. Andover, Cengage Learning.

Gabriel, J. V. (2014). Case studies in sustainability management. http://alltitles.ebrary.com/Doc?id=10902323.

Thomas, J, & Peters, C 2015, 'Lululemon Athletica and a Series of Bad Marketing Decisions', Journal Of Critical Incidents, 8, pp. 102-105, Business Source Complete, EBSCOhost, viewed 17 August 2016.

Hannah, D, McCarthy, I, & Kietzmann, J 2015, 'We’re leaking, and everything's fine: How and why companies deliberately leak secrets', Business Horizons, 58, Special Issue: The Magic Of Secrets, pp. 659-667, ScienceDirect, EBSCOhost, viewed 17 August 2016.

Plunkett, J, & Plunkett Research, L 2014, Plunkett's Sports Industry Almanac 2015 : The Only Comprehensive Guide To The Sports Industry, Houston, Texas [P.O. Drawer 541737, Houston TX 77254-1737 USA]: Plunkett Research, Ltd, Discovery eBooks, EBSCOhost, viewed 17 August 2016.

Springsteel, L 2013, Becoming A Fashion Designer, Hoboken, New Jersey: Wiley, Discovery eBooks, EBSCOhost, viewed 17 August 2016.

Stalk, G, & Butman, J 2008, Five Future Strategies You Need Right Now, Boston, Mass: Harvard Business Review Press, Discovery eBooks, EBSCOhost, viewed 17 August 2016.

Muthu, SS 2014, Roadmap To Sustainable Textiles And Clothing : Regulatory Aspects And Sustainability Standards Of Textiles And The Clothing Supply Chain, Singapore: Springer, Discovery eBooks, EBSCOhost, viewed 17 August 2016.

Giovanni, M, & Stefano, M 2016, Philosophical Perspectives On Fashion, London: Bloomsbury Academic, Discovery eBooks, EBSCOhost, viewed 17 August 2016.

Holton, P 2014, 'Intellectual Property Laws for Fashion Designers Need No Embellishments: They Are Already in Style', Journal Of Corporation Law, 39, 2, pp. 415-436, Business Source Complete, EBSCOhost, viewed 17 August 2016.

Seijts, GH 2013, Good Leaders Learn : Lessons From Lifetimes Of Leadership, New York: Routledge, Discovery eBooks, EBSCOhost, viewed 17 August 2016.

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2016). Business ethics: ethical decision making and cases. Australia : South-Western, 2016.

 

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