Value Chain and Resources Lululemon PDF

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Description

Value Chain & Resources

Sales & Marketing

Supply chain management

Operations

Received real time input from customers

Production is the Vertical Community only activity integration; own based, yoga outsourced stores and online instructors, ambassadors

Distribution

Service In-store complementary yoga, GEC

Tangible:  Intellectual property: lululemon minimized imitation by trademarking its logo, brand, products design and the fabric name used by the company.  Distribution Facilities: the company operates efficiently by having three larger distribution facilities present in Vancouver, Melbourne and Sumner.  Globalized Stores: the company is presence in Canada, US, Australia and New Zealand with 218 stores. Intangible  Brand Name: The company brand is well recognized by the customers as a high quality athletic apparels producer, especially their yoga products that is different from their competitors.  Reputation: the good reputation lululemon has with its suppliers due to the close work environment that the design team has with suppliers established the company’s dominance is the market.  Quality Control: upon purchasing its products, lululemon guarantees that majority of the product purchased will last at least 5 years if its used as it intended. Therefore, that show us how committed the company is to manufacture high quality products.

Capabilities   

Outbound logistics: the inventory management style lululemon use is creating a fake scarcity for its products by distributing a limited amount of a specific design, so they encourage customers to purchase its products quickly. Marketing and Sales: lululemon uses a community-based advertising approach, this approach involves heavily in local networks and building them through sponsored events and in-store lessons. Supplier relationship: The company has developed a very strong relationship with its suppliers over time. Those suppliers provide the company now with the needed

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input, and also help in the process of developing new products based on suggestions from lululemon’s design team. Product design: the company design team gather information through from feedback from customers, and market research of the current trends. Moreover, they have an ongoing partnership with companies that inspects, tests and verify the fabrics used by lululemon by numerous performance measures. Human Resource Management: Employees at lululemon “educators” are highly trained and motivated by the company to create a personal relationship with its customers. Moreover, lululemon lunched a program called “Make your Mark” for students who interns at the company. Services: lululemon has two services that adds value to its products and customers. o In-store complementary yoga classes o Guest education center, where customers provide feedback and asks questions about products and services.

Core Competencies Competency Valuable

Rare

Inimitable

Organized to be Exploited

Relationship with customers Customers are loyal to the brand, which helps the company to earn more market shares.

Product and design

Culture

Customers value the quality and design of the products.

The relationship lululemon developed is time consuming which makes it hard for competitors to develop in timely manner. Lululemon uses a culture-based customer relation approach, which is hard to imitate.

to ensure that their products are one of a kind, lululemon placed an intellectual agreement with their suppliers

the promotion of a healthy life style makes the employees and customers involved with the company. The shared culture by the company, employees and customers is rare.

This culture-based relation translated in a significant increase in sales.

They use of “Brand ambassadors” and feedback from its customer to develop products. Hard to imitate due to customers loyalty. The quality and uniqueness of their products are what attracting customers.

Difficult to imitate the experience and the culture that customers look for.

Strong and motivated employees due to the strong company culture.

Analysis of sustainability: what are the most important factors that will effect wither your firm is able to sustain or improve its competitive position and profitability? How sustainable is their business plan? By looking at the core Competencies we can conclude that the most important factor Lululemon possess is the relationship they have created with their costumers and the yoga community and that is what is giving them their competitive position and creating profitability. Nevertheless, their business plan can be sustainable as far as Lululemon sustain the unique relationship they have created with their customers and targeted market. Therefore, they took the step for hiring Laurent Potdevin, ex CEO of Tom shoes, as a new CEO, because of his previous expertise of making Tom shoes the leading incorporation in CSR. Potdevin is the right guy for Lululemon to maintain and develop that unique relationship they have with their costumers Tom shoes because he knows how he can improve at customers relationship. Quality improvement: According to Lululemon website their quality is consisted of three elements craftsmanship, fabric and performance. Furthermore, first suggestion for quality improvement is to move their manufacturing to the United States so it will be more in line with their “High Quality” product strategy. Actually China’s overwhelming manufacturing cost advantage over the U.S. is shrinking fast. Within five years rising Chinese wages, higher U.S. productivity, a weaker dollar, and other factors will virtually close the cost gap between the U.S. and China for many goods consumed in North America.

By observing the graph we can conclude that the “law wage” advantage producing in China is gradually shrinking, and the move back to produce in the U.S. is not as costly as it used to be. Another recommendation is to create a premium line manufactured in the U.S and clearly promote it as “Made in America” product, the lunch of this line will help Lululemon decide on how that will benefit their product imagine and recognition, will their costumers prefer the “Made in America”, or will costumers will be willing to pay a little bit more for that premium product. Therefore, instead of moving their manufacturing to the U.S this premium line lunch can help them decide if the cost of moving back to the U.S is beneficial, and gather the information needed for that step. Furthermore, more apparel companies are moving their manufacturing to Sri Lanka due to the wages increase in China, and if Lululemon is looking to take that step the must evaluate and remodel they way the inspect their product quality, specially with the ongoing partnership with companies that inspects, tests and verify the fabrics used by Lululemon, so they eliminate recalls or products flaws as much as possible. Would it be worth moving back to the us? Percentage of production china and sri lanka Would is solve the quality problem? It was a one time event, was hyped in the media specially with former CEO comments. The image of quality is what is importance

Would it be worth moving back to the us? Although wages and benefits are increasing in China, its still the best option for Lululemon to keep their production in China because their products are still looked at as a high quality products, and the recall that happened in 2013 was a non-occurring incident that was hyped in the media specially with former CEO comments. Therefore, the moving their production to the U.S would be a very costly move for them even if it will be inline with their “High quality” product strategy....