C12 Lululemon Case Solutions PDF

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Chapter 12 Case Study Solutions Part 1 Lululemon Athletica—A Positive Influence in People’s Lives Critical Thinking What kind of information should lululemon gather to help it decide on where to locate stores? To remain competitive, lululemon must be aware of the competition and innovations in the industry. The company must also be aware of health trends and consumer needs and interests. Lululemon must collect demographic information about its customers, including age, location, income, and spending habits. Gathering feedback from customers on the services and products they prefer would also be beneficial. Any information related to the leisure and fitness industries should be carefully monitored to determine areas of focus. Since many imitators and competitors have entered this market, what should the marketing department do to ensure that lululemon keeps a competitive advantage? Lululemon products have many advantages over competitors. Students can view the website to see the various innovations introduced by lululemon, including flat seams, tear-out labels, thumb holes on the sleeves, and key and credit pockets. But the company is not just about sales. The entire philosophy of health and wellness is aimed at employees, their clients, and the community. Employees are highly knowledgeable because of a strong emphasis on training. To ensure that lululemon meets the needs of its customers, it has decentralized marketing, which is largely word of mouth. It supplies free clothing to yoga and fitness instructors, who act as lululemon’s “ambassadors” and provide valuable design feedback. Lululemon also decided that it would fund local marketing initiatives. Copyright © 2016 by Nelson Education Ltd. 1

How can collected information be transmitted to lululemon decision makers? Information collected for franchises would be best transmitted in written reports and bulletins. Because of the number of franchises and the various locations, written documentation would provide consistency of information and ensure that all the information is delivered quickly. Having information on a company intranet would also be beneficial since the information could be updated and posted, and there could be an opportunity for franchisees to give feedback and participate in Web-based forums and discussions. Oral presentations may be valuable for key information and to encourage feedback and group dynamics; however, getting all franchisees together at one location could be difficult. Therefore, video conferencing for key decision areas may be an alternative.

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Part 2 Lululemon Athletica Revisited Critical Thinking How important to lululemon are the collection, organization, and distribution of up-to-date information regarding athletic/leisurewear trends, competition, and product development? The collection, organization, and distribution of current data regarding food and beverage trends, competition, and product development are extremely important to lululemon athletica. Lululemon has grown significantly, which means it must stay on the cutting edge in its product offerings and the experience it seeks to create for its customers. Maintaining a market leadership position takes lots of research and sound corporate communication. Lululemon gets direct honest feedback from experts in the field. It reports this to other areas of the organization. Lululemon also realizes that its designers will have to create items for other areas of the world with different climates and cultures. Responding to customer demand for solutions to problems is the key to lululemon’s success. When customers demanded a solution to “stink,” lululemon launched a Silverescent line of products—antibacterial and scent-free clothing. In what ways could lululemon use the Internet to monitor its competitors, including Nike, Under Armour, Adidas, American Eagle, OMgirl, and Carushka Bodywear? Regular visits to competitive websites and stores would keep lululemon apprised of competitor locations and new products. In addition, monitoring news reports on competitor innovations using an online resource such as Google Alerts would also provide valuable information. What kinds of reports might be made to management by employees assigned the task of monitoring lululemon’s competition? Copyright © 2016 by Nelson Education Ltd. 3

In monitoring the competition, lululemon representatives might first write informational reports summarizing competitive activities in their regions. These reports would identify the contacts, summarize three to five main points, itemize prices, and report new events, product launches, and new store openings. They may also write periodic reports that may be organized by product, sales, and customer feedback discussing the geographical trends and need for change. If stores are not performing as planned, investigative reports identifying problems, competitive influences, and changes in market trends or local demographics might be appropriate. Lastly, reps might also write progress or interim reports that keep managers informed of the status of any initiatives or projects. These reports would specify the nature of the project, provide background information, describe the work completed, explain the work currently in progress, anticipate problems and possible remedies, and discuss future activities and completion dates. This could also include reports on the status of new competition planning to enter the local market.

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Part 3 Applying Your Skills at Lululemon Athletica Your Task To achieve the growth necessary for success, you have been asked to evaluate into which countries lululemon should consider expanding. In order to do this, identify a dozen factors that need to be considered when assessing a particular country. Consider points in the the lululemon athletica code of vendor ethics (http://sustainability.lululemon.com/wpcontent/uploads/2014/04/lululemon_vendorCoE_English1.pdf) and lululemon’s Manifesto (http://www.lululemon.com/about/manifesto). Then pick a country and assess its viability by running it through the various factors on your list. Write a report about whether the company should proceed with expansion to this country. Make sure you list both the pros and the cons of your decision.

Have students pick a country, and using the details from the code of vendor conduct (http://sustainability.lululemon.com/wpcontent/uploads/2014/04/lululemon_vendorCoE_English1.pdf) and manifesto (http://www.lululemon.com/about/manifesto) below, ask them to assess the pros and cons of doing business. As you review the points below and compare them with documented data regarding workplace environments in a particular country, it may become clear that some countries will create more difficulty. Some elements from the workplace code of conduct and the manifesto are listed below. Vendor Code of Conduct The standards that lululemon has established are based on those recognized by the industry and are non-negotiable. They are prominently displayed in all partner factories and include the Copyright © 2016 by Nelson Education Ltd. 5

following: 

no child labour

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no forced labour

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no discrimination

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no harassment or abuse

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freedom of association

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voluntary hours of work

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workplace health and safety

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wage and benefit minimums

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environmental responsibility

The Lululemon Manifesto 

Drink FRESH water and as much water as you can. Water flushes unwanted toxins from your body and keeps your brain sharp.

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A daily hit of athletic-induced endorphins gives you the power to make better decisions, helps you be at peace with yourself, and offsets stress.

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Do one thing a day that scares you.

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Listen, listen, listen, and then ask strategic questions.

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Write down your short and long-term GOALS four times a year. Two personal, two business, and two health goals for the next 1, 5, and 10 years. Goal-setting triggers your subconscious computer.

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Life is full of setbacks. Success is determined by how you handle setbacks.

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Your outlook on life is a direct reflection of how much you like yourself.

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That which matters the most should never give way to that which matters the least.

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Stress is related to 99% of all illness.

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Jealousy works the opposite way you want it to.

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The world is changing at such a rapid rate that waiting to implement changes will leave you 2 steps behind. DO IT NOW, DO IT NOW, DO IT NOW!

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Friends are more important than money.

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Breathe deeply and appreciate the moment. Living in the moment could be the meaning of life.

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Take various vitamins. You never know what small mineral can eliminate the bottleneck to everlasting health.

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Don’t trust that an old age pension will be sufficient.

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Visualize your eventual demise. It can have an amazing effect on how you live for the moment.

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The conscious brain can only hold one thought at a time. Choose a positive thought.

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Live near the ocean and inhale the pure salt air that flows over the water. Vancouver will do nicely.

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Observe a plant before and after watering and relate these benefits to your body and brain.

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Practice yoga so you can remain active in physical sports as you age.

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Dance, sing, floss and travel.

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Children are the orgasm of life. Just like you did not know what an orgasm was before you had one, nature does not let you know how great children are until you have them.

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Successful people replace the words “wish”, “should” and “try” with “I will”.

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Creativity is maximized when you’re living in the moment.

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Nature wants us to be mediocre because we have a greater chance to survive and reproduce. Mediocre is as close to the bottom as it is to the top, and will give you a lousy life.

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lululemon athletica creates components for people to live longer, healthier and more fun lives. If we can produce products to keep people active and stress-free, we believe the world will become a much better place.

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Do not use cleaning chemicals on your kitchen counters. Someone will inevitably make a sandwich on your counter.

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SWEAT once a day to regenerate your skin.

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Communication is COMPLICATED. We are all raised in a different family with slightly different definitions of every word. An agreement is an agreement only if each party knows the conditions for satisfaction and a time is set for satisfaction to occur.

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What we do to the earth we do to ourselves.

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The pursuit of happiness is the source of all unhappiness.

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