Lululemon's public relations crisis and sales decline

Lululemon Five I's Strategic Analysis

Issue Identification

Several stakeholders include employees and consumers have accused Lululemon of causing damage sales because the company does not know the strategy to handle the public relations. The situation further affected the company sales because of the recent public statement of Chip Wilson who went on Bloomberg TV blaming the "women bodies" for a decline in sales. (Bhasin, 2013 p 1). Undoubtedly, Wilson went to the TV to offer the best explanation that causes a down in the sales, however, his explanation spark a wave of outrage making him resign his position in December. This issue directly affects the customers because they are affected by the company negative public relations. (CBS, 2013).

Lululemon is company that makes technical athletic cloth for working, yoga, and workout. However, the company has recorded a decline in sales in the last years, and of the major factors affect the sales is that the public relations problems that are undoubtedly affecting the sales. The company does not understand the strategy to handle the PR consequently turning into the negative PR, which are affecting the company business. The issues that are confronting the Lululemon the method to handle the public relations to improve the sales.

2. Interested Strategic Stakeholders

Several stakeholders are likely to gain or lose from the issues facing Lululemon. First, the company employees are likely to lose from the present issues. If the company sales continue to decline, Lululemon's management will be forced to lay off some workers, which may affect their livelihood. Moreover, the shareholders are affected because of the issues. Since March 2013, Lululemon has recalled the black yoga pants because the product is see-through, and the company sales were flat in the fourth quarter making the shares to slump by further 11%. If the issues are not corrected on time, and the shares do not improve, many shareholders will lose their money. Moreover, customers are the other stakeholders who will be affected by the issues affecting. Lululemon. Bhasin, (2013) reveals that women customers have been exposed to a significant amount of negative news since the company recalled their products, and overall women shoppers' perceptions of the company brand make the product to fall four times in 2013. Thus, the customers have affected in the sense that some women are shy from buying Lululemon brand following Wilson comment on their bodies.

However, the competitors will gain from the present issue because some customers will be forced to switch to the competitors thereby making the competitors enjoy an increase in revenue. Moreover, the government may lose from the present issue because Lululemon will pay lesser tax because of a decline in revenue. More importantly, the government will not be able to collect tax from the shareholders if they lose their income.

The suppliers are the other stakeholders that will be affected by the issue. The company may reduce the quantity of products delivered by the suppliers following a decline in the company's products.

4. Information -- Objectives

The objective of this information is to assist Lululemon to improve Lululemon public relations to boost sales. The following objective will assist Lululemon to achieve their goal:

To assist Lululemon to improve their public relations to boost sales by 50% with the next 3 months. According to Council of Public Relations (2005), public relations are the most effective strategy to boost sales and build a brand reputation by 50%. Moreover, an effectiveness of public marketing discipline relies on the positive public relation. Typically, the public relation will contribute to the marketing objective by 15%. The best strategy that can assist Lululemon is to carry online survey targeting women shoppers. The information collected will assist the company to improve the customer needs.

5. Interaction Strategies

The strategy is to correct the public negative public relations. The company can achieve this aim by using the professionals to design the appealing public relations that will assist in boosting the sales. Essentially, Wilson is not a public relation professional, Although, he offers the opinion that he considers the best opinion for the company, nevertheless, this opinion dampens the company image. By allowing the professional to design the public relations, the company will improve their relations with customers positively. The company also needs a source for the high-quality fabric to the design its product to alleviate the issue of see-through.

Reference

Bhasin, K. (2013). Lululemon Admits Its PR Disasters Are Hurting Sales. Retrieved 10 June, 2017 from http://www.huffingtonpost.com/2013/12/12/lululemon-pr_n_4434580.html

CBS (2013). Lululemon founder Chip Wilson issues an apology following thigh-rubbing pants comments. Retrieved 10 June 2017 from http://www.cbsnews.com/news/lululemon-founder-chip-wilson-issues-apology-following-thigh-rubbing-pants-comments/

Council of Public Relations (2005). Measuring the Impact of Public Relations on Sales. Council of Public Relations Firms.

Wallace, A. (2015). Chip Wilson, Lululemon Guru, Is Moving on Retrieved 10 June 2017 from https://www.nytimes.com/2015/02/08/magazine/lululemons-guru-is-moving-on.html?_r=1