Analyze the yoga clothing industry using Michael Porter\'s five-forces model. PDF

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The five-forces model is an assessment of an industry's environment and is, therefore, a measure of the forces driving competition within competitors. The Yoga apparel industry is an example of how this model can be used to assess an industry....

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1) Analyze the yoga clothing industry using Michael Porter's five-forces model. The five-forces model is an assessment of an industry's environment and is, therefore, a measure of the forces driving competition within competitors. The Yoga apparel industry is an example of how this model can be used to assess an industry. New Entrants' threat: Two forms can be taken by new entrants: Startups and Diversification of existing firms from other industries. The yoga apparel sector of clothing has gained much attention since its start as people become more health-conscious, and yoga apparel is becoming more of a health trend. Various new startup companies have entered the industry, and clothing giants have diversified their product lines to include yoga clothing. Tala, Buff Bunny, or Gymshark (2012) and diversification of current firms, including Nike, Underarmour, Victoria Secret, Old Navy, and Gap, are all examples of new entrants. For these latter companies, diversification is more comfortable as they already have facilities and relationships with suppliers. Bargaining Power of Suppliers: The yoga apparel industry has become very competitive over the past few years. There is an overabundance of suppliers in this niche, which takes away the suppliers' bargaining power. Clothing manufacturers are not as hard to find unless a brand is looking for a specific technology. Bargaining Power of Customers: This, by far, is the most influential force in Michael Porter's five-forces model. Buyers in this industry have significant power since there are so many brands to choose from. There are many options at different price points, and some of the new startups are taking a piece of the pie from Lululemon with their high tech fabrics that now rival the incumbent. For Lululemon, however, their product differentiation and the quality, both physical and social, separate them from other companies in the industry. People can pay much more for better quality products. The Threat of Substitutes: The yoga apparel industry itself has become a substitute for athletic clothing, and therefore the risk of substitutes is pretty low at this point. Comfort and durability, among many other factors, have played a significant role in strengthening this product line. The yoga apparel industry has become an icon of athleticism and health awareness. The threat of Existing Rivalry: There is continuous rivalry among firms in the yoga apparel industry. The power of differentiation has played a critical role in the example of Lululemon. However, the rivalry is becoming fierce, and several incumbents are trying to share the pie in this industry. This rivalry will continue to affect this niche, especially since it has become a significant market player. 2) Conduct a VRIO analysis of Lululemon. The Question of Value: Lululemon has established a world brand specialized in Yoga apparel. With over 460 locations, Lululemon can hold and attract new customers. They reached this level of success by adding value to its customers. For an extended period, it was the only firm that customers thought of for yoga wear. They developed a very loyal fan base and continue to be a leader due to their product's incredible quality and the overall lifestyle they sell. The Question of Rareness: The question of rareness has to be analyzed in two different views. The first view overlooks the industry of Yoga apparel. When Lululemon first started, it was one of the first to

utilize the market niche, and they introduced a very comfortable and reliable product for the consumers. However, as the industry grew, more competition and many more incumbents joined the market, and therefore the Rarity of the yoga apparel industry has declined. The second view is the actual product itself. Lululemon was able to stand out by differentiating its product and establishing a superior product image to any other brand. It delivered quality, attractive product design, apparel for both men and women, and a warranty program to stand behind their products. This has allowed Lululemon to tackle the question of Rarity in this industry. The Question of Imitability: Imitability has been a big issue in this industry. After the success of Lululemon, many brands started focusing on similar products. It is not until recently that competitors have been able to do it effectively. Previously the fabrics used had proven difficult to imitate, but that is no longer the case. Technology has changed, allowing for more innovation. The Question of Organization: Lululemon has a firm grasp of its company mission and mottos. It is primarily focused on the community and growth of its customers and is knowledgeable about implementing its business strategies, such as its cost reductions and its target audience. Its products and service's overall value is substantial, proven through its strong customer base, willing to spend the price for high quality. Its rareness is neither healthy nor weak; Lululemon delivers quality, attractive product design, apparel for both men and women, and introduces exciting collaborations such as"Lululemon X Robert Geller." 3. Discuss which of the three kinds of business-level strategies you think Lululemon is employing or should employ? 1) Innovation Lululemon's general business strategy theory of health, wellness, and personal goodness lead the company to drive innovation. Lululemon has been in the limelight for its innovative approach. With an exceptionally excellent R&D department, the company is known for its constant innovation, developing market-based new product designs, and innovative materials to offer unique product value to the customers. 2) Interactive Digital Marketing Lululemon's marketing approach is moving towards high-level digital fame. The brand is portrayed as a critical element of the fitness community to build relationships with athletic teams, fitness facilities, and yoga studios. These collaborations are advertised through social media and customer-based interactive activities. Lululemon has another Sweat Collective interactive program. Sweat collective is an association of the 'world's sweatiest leaders.' The members of this association are involved in fitness studios. Most community members are instructors, personal trainers, professional athletes, or Olympic athletes who use and promote Lululemon's products. 3) Launching New Product Lines in Different Regions for expansion Lululemon is a company with successful retailing stores. Their retail stores are one of the top revenue generators among all US companies. However, the company tends to expand its business beyond the

US. Lululemon looks at China and other countries of the world to have more potential to welcome their new innovative products, e.g., a new sportswear collection for men....