Lululemon Athletica Inc. is a premium designer and retailer of athletic apparel that has remained profitable over the years. The firm’s profitability and success is attributable to various factors, particularly its fashionable products. Lululemon stores have more visitors on a daily basis because of these products, knowledgeable store personnel, and store ambience (Gamble, Peteraf & Thompson, 2019). This paper discusses strategic management for Lululemon Athletica Inc in relation to its business strategy and practices.
Competitive Forces Confronting Lululemon

Even though Lululemon has remained profitable over the years, the company is faced by various competitive forces in the market for performance-based yoga and fitness apparel. Given the attractiveness of this market to entrepreneurs and start-ups, the threat of new entrants in Lululemon’s market is high. The firm also faces a high threat of substitutes from established brands like Nike, Adidas and Reebok. However, the bargaining power of buyers in the market is low because Lululemon’s rivals act independently while the bargaining power of suppliers in moderate because of the intense rivalry in this market. Gamble, Peteraf & Thompson (2019) state that this market is characterized by intense competition, especially from established brands.

Strategic Group Map of this Industry

Based on my strategic group map, the performance sports apparel industry is characterized by numerous growth and better positioning opportunities. These opportunities are attributable to increased demands for stylish and fashionable apparel items by female customers who account for a significant portion of the industry’s customer base. Lululemon is well positioned in this industry as it is in a similar strategic group as Nike, an established brand. The firm’s better positioning is also brought by its success and performance in cross-group rivalry.

Key Success Factors in this Market

In light of the intense rivalry in the performance-based yoga and fitness apparel, companies face the need to adopt suitable strategies to enhance their success. Based on the case study, the key...…increased costs. Insights from the analysis should be utilized to determine a new business strategy going into 2017.

Secondly, Lululemon should transform its business audience to incorporate a wider target audience to help improve profit margins. The company should consider incorporating young people and seniors as part of the target market, which would require using a different competitive approach other than the current focused differentiation strategy. In this case, the firm should adopt a brand differentiation strategy in order to reach a wider target market.

Third, Lululemon’s CEO and management should capitalize on its constant innovation to develop new products that reach the wider target market in order to deal with the threat of new entrants who copy its business model. Innovative product development initiatives would help ensure that the business model becomes sophisticated and avoid duplication by new entrants. Through this process, the company will create unique products that generate substantial competitive advantages over rivals in the market.

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