Lululemon is an amazing clothing brand known worldwide. You can easily recommend this brand to anyone trying to find good athletic wear. Behind the success of any company, there are various internal and external factors affecting the operations of the company. In this article, we would look at the internal and external factors in the form of a SWOT analysis to understand how Lululemon operates.
You might also wanna read: Under Armour SWOT Analysis For 2023
Brief Overview Of Lululemon
Lululemon is a Canadian athletic apparel company that was founded in 1998 by Chip Wilson. The initial days of Lululemon focused only on yoga clothing for women. However, it expanded the product range into a wide range of activewear for both men and women. The company is synonymous with amazing clothing quality but slightly expensive compared to its competitors. You can find and shop Lululemon products through online portals and through brick-and-mortar stores. As of 2023
As of its fiscal year 2022 (ending January 30, 2022), Lululemon’s financials are as follows:
- Revenue: $6.2 billion
- Net income: $1.4 billion
- Gross profit margin: 56.4%
- Operating income: $1.7 billion
- Operating expenses: $4.6 billion
- Total assets: $4.9 billion
- Total liabilities: $1.2 billion
SWOT Analysis Of Lululemon
SWOT is a great tool to analyze the internal and external factors that can help us understand a company in a detail-oriented manner. There are alternatives to SWOT as well, but for this article, we’ll stick to a SWOT analysis.
Let us begin!
Strengths Of Lululemon
Exceptional Brand Image
Lululemon as a brand has built a great position and value in the market. When it comes to activewear, this brand surely comes in the top 5 for all sorts of consumers. People looking for a high-quality clothing brand that can support their healthy lifestyles do look for Lululemon. Offering premium quality products to its consumers has helped Lululemon build a brand value that is remarkable and quite strong even in the era of stiff competition.
Diversified Product Range
Lululemon has a great line of products that is diversified without comprising the quality aspect. The product portfolio of Lululemon is diversified for both men and women.
Here are the top categories of products offered by Lululemon
- Tops
- Yoga Pants
- Shorts
- Sweaters
- Jackets
- Undergarments
- Bags
- Yoga Mats
- Water bottles
- Deodorant
- Shampoo
Strong Research And Development
Another strength that Lululemon possesses is the research and development infrastructure it has. The sole purpose of research is to enhance the quality of its products and provide consistent performance in the market. The company runs a research and development lab by the name of “Whitespace”. It has around 50 employees including scientists and physiologists. Over the period of time, Whitespace has contributed a lot to diversifying its products and enhancing the quality they offer.
Patented Fabric Material
Lululemon trademarked its original fabric, Luon, which included a higher-than-average amount of nylon microfiber, in 2005. Since then, the company has produced several different types of fabrics, including compression and moisture-wicking designs. Apart from this, Lululemon is primarily known for their leggings, which first made the brand popular. Patenting a clothing fabric under its own brand name is quite advantageous over other competitors.
Customer and Community Engagement
Building a strong network of consumers is another great strength of Lululemon. Lululemon provides a brand ambassador program wherein you’ll test drive the latest gear, get development tools and experiences, and connect with like-minded people. You connect with consumers and get useful insights and feedback that help the company grow and improve product quality. Apart from this, the company also focuses on in-store classes and organizes many local events for its customers. All this helps and strengthens the company to grow and outperform its competitors.
Weaknesses Of Lululemon
Costly As Compared To Competitors
The quality of the products offered by Lululemon is amazing. This holds no doubt in the minds of the consumers. However, when we compare the price of similar clothing products, the competitors like Nike, Adidas, or Under Armour offer lower prices. This becomes a weakness as many consumers may switch and prefer competitors over Lululemon only because of the gap in the price range. Does this mean the competitors are offering low-quality products if the prices are low? The simple answer is no. So, Lululemon can work on this and offer better prices to reach a larger customer base.
Limited Global Presence
Lululemon has a relatively small market share compared to its competitors in the activewear industry, such as Nike and Adidas. Lululemon is only present in around 17 countries as of 2023. If you compare this with competitors like Nike, it is present in almost 45 countries. Moreover, Adidas is present in almost 150 countries. So, if we compare these numbers, Lululemon is still far behind as compared to its competitors in global presence.
Opportunities For Lululemon
Global Expansion
As discussed in the weaknesses of Lululemon, the company is still not globally present as compared to its competitors. So, this is one great opportunity for the company to expand itself into other countries as well. Yes, expansion for any company is not easy. It requires a lot of effort, resources, and strategic planning. But, still, this holds a lot of potential and a great opportunity to work upon. Global expansion in the Asian market can be a good option. The Asian market is quite huge and with decent buying capacity. This market is already penetrated by Nike, Adidas, and Puma.
Use Of Innovative Technology
Most companies in the current era are using technology to improve the customer experience in all aspects. For example. Under Armour has acquired around 3 fitness apps to align with its athletic wear. Lululemon can also grab this opportunity to use technology and applications to promote fitness and it athletic wear. The greatest opportunity for Lululemon can be wearable devices related to fitness and sports.
Explore Footwear Market
Competitors to Lululemon are present in the footwear market along with activewear. This can be a great opportunity for Lululemon as well. It is already having a diverse portfolio of a product range. However, where other companies are offering footwear products, Lululemon is still not entering this market. Being an established brand, the company can take advantage and launch some footwear products as well.
Sponsorships With Athletes
Lululemon is quite active when it comes to working with influencers under its brand ambassador program. However, it still lacks its presence when it comes to working and sponsoring athletes. You can find many top-notch athletes and sports teams under a sponsorship partnership with Nike, Puma, Adidas, or Under Armour. This is one market segment where Lululemon is still not present much. They can surely explore this and improve their brand position in the market.
Threats To Lululemon
Solid and Stiff Competition
Like every company, Lululemon has its own share of competitors. If you observe the previous points under the strengths, weaknesses, and opportunities, many competitors are already ahead of Lululemon in various aspects. This becomes a threat to the business of Lululemon. Nike, Adidas, Puma, or Under Armour are performing quite well in the clothing segment. They are present in more countries, using innovation and also exploring the footwear market.
Economic Conditions
As Lululemon is present in limited countries for now, any economic change in those market segments can affect the revenue numbers for the company. Moreover, the price range of Lululemon is already costlier as compared to its competitors. The negative changes in economic situations can worsen the situation for Lululemon and move the customers to choose its competitors.
Counterfeit Products
Every established brand is facing issues of counterfeit products that are hampering their business for them. So is the case with Lululemon. There are many cases where it has been seen that we see counterfeit products from the clothing line offered by Lululemon. These are fake products and result in a negative image building for the brand. It can damage the company’s brand reputation, erode customer trust, and result in lost sales.
Bottom Line
Lululemon is known for its high-quality products, stylish designs, and innovative fabrics that cater to the needs of athletes and fitness enthusiasts. Over the years, Lululemon has expanded its product line to include a wide range of apparel and accessories, including yoga mats, bags, and other workout gear. These are some strengths using which Lululemon has established itself over the years. As seen in the weaknesses and threats, despite facing competition from other athletic apparel retailers, Lululemon has maintained its position as a major brand in the industry through its focus on innovation, customer engagement, and community building. In conclusion, Lululemon is a successful athletic apparel brand that has built a strong reputation through its commitment to quality, innovation, and customer engagement. The company’s growth and success are a testament to its ability to adapt to changing market conditions while remaining true to its core values.