strategies that are fitting, competitive and performance-oriented
Existing as a profitable player in a given industry is dependent on the strategies that are fitting, competitive and performance-oriented. Outdoing competitors and achieving profitability is the main desire of shareholders and must be an evolving action over time because of emerging trends. Designing and enforcing the right strategies to maintain the brand, market position, and customer loyalty should be the main objective of every top management of a company. When a business is performing well and with an upward trend then emphasis on the existing strategies, however, if the business shows a downfall and increased competition, reactive strategies should be enforced to maintain the business position. Chief Executive Officers of a company is tasked with the responsibility of ensuring the business is well-positioned in the market and if not must work towards restoring and achieving a top position. Lululemon Athletica Inc., an athletic apparel designer and retailer company saw a general decrease in sales and net profit in 2014 in comparison to 2012 and 2013. In 2012, Lululemon Athletica was dominating the yoga industry and two years later the dominance submerged and much could be pointed to be as a result of a damaged brand and high competition. Regaining such dominance would demand the CEO to craft and execute strategies that return the favour towards the company. Lululemon Athletica Inc. could get back to its dominating position if the emphasis is made on product quality, new marketing strategies, damage control strategies, and investing in high-end products.
Lululemon Athletica Inc., a yoga industry company founded in 1998 by Chip Wilson saw a desirable growth in expansion and customer base in the first fourteen years (Edwards, 2015). Therefore, the brand name of Lululemon Athletica Inc. had already captured millions of customers’ belief in the products they make. Product quality has been the best advantage that Lululemon has on its competitors. However, in 2013, a lawsuit against the company served to torture the name of the product quality. A complaint was raised of the product’s yoga pants for women being see-through when one stretches or bends (Thomas & Peters, 2015). The lawsuit and the facts behind it led to customers’ enthusiasm for Lululemon’s products suffer a blow thus affecting sales. Regaining customers’ loyalty would demand the CEO to strategize on measures to promote the brand and improve the quality to meet the initial description. The plan could take time in promoting brand awareness and quality reassurance, however, a successful strategy would reposition Lululemon above their competitors. Moreover, the company should take responsibility for the see-through pants by refunding all the affected customers or replacing the pants with a higher quality product (Mount, 2013). Through showing concern for customers’ demands, the company would regain the faith of the customers on their products and would drive sales up as a result of building better customer relationship.
Marketing strategies are key in driving a company to gain a competitive advantage in a given market. For years, Lululemon has been using grassroots marketing strategy. Grassroots marketing involves the use of word of mouth to drive sales. The marketing strategy has for long been working in favour of Lululemon as reflected in the sales and competitive position that Lululemon has been enjoying in the industry. However, in a world where technology and societal culture are constantly changing, companies must strive to be ahead of the curve by adapting to the new normal (Barney & Hesterly, 2010). Globalization has led to Lululemon have a presence in several countries, thus gaining new customers in such regions need more than word of mouth. Social media marketing and search engine marketing must be used in a world where billions of people have access to the internet. The CEO should consider employing a long term marketing strategy in the form of advertisements and internet marketing to be able to outdo the giant competitors in the market. Competing against Adidas, Nike, and Under Armour requires a little upsurge in marketing strategy to increase brand awareness in new markets. For an established company like Lululemon, investing in technological advertising would be cheaper and yet yield desirable results of new customers and improved brand image globally.
Every company is capable of causing damages of some nature to its stakeholders. For Lululemon Company, the damages come in the form of the product fails to meet customer needs. Responding to the damages caused should be strategically structured in a manner that all the parties involved get satisfied and compensated for. Unattended damage or scrupulously handled damage could lead to discourage customers and even damage the reputation of the company in the industry. In the case of Lululemon in 2013 where a complaint was made for see-through yoga pants, the damage control was handled poorly (Thomas & Peters, 2015). The chairman of the company responded to the claims by asserting that the problem is not with the apparel but with the body of the women. The assertions were received with anger and dissatisfaction by women and which drove the company sales down thereafter because women make up the largest market of Lululemon products. A scenario where the complaint had been handled with concern to women and the brand image would have seen Lululemon maintain its market position after that case. The CEO, therefore must learn from that mistake and adopt to improved public relations and damage control strategies. Settling with concerned parties in an undisclosed nature and avoiding negative statements against customers could serve to preserve the name of a company in the market. The CEO should recommend the chairman to step aside matters concerning the company’s products and should be the one taking such roles of handling the press and complaints from customers.
In a highly competitive environment, survival is guaranteed for those who are willing to tap and risk into the untapped market (Thompson et.al., 2013). High-end products in the yoga industry are non-existent. Investing in such a market would promote sales and profitability scale of Lululemon Athletica Inc. and may help the company gain the competitive advantage and profitability it once enjoyed. Yoga clothing has gained the form of being a fashion clothing for many and the trend has captured men and women of all social status. Designing products that will attract the high-end earners would help drive up sales and yet it would take a little investment to achieve that status. People would buy anything that would show they have more value than their peers. High-end earners would dress highly-priced yoga clothing to express their value to society. Tapping into such a market would solve the CEO the headache of trying to fit in a market of premium-priced products. The CEO should also consider making products for both gender and all ages since the product has captured fashion reputation. Moreover, being the first to enter into such a market in the industry, Lululemon would revive its brand by being associated with high-end earners.
Bouncing back into the market after falling short in customer loyalty and general sales is a task that requires strategic management. The case of Lululemon Athletica Inc. is an indication of how a lack of proactive and reactive strategies could lead to damaging the brand and profitability of a company. However, Lululemon has the advantage of getting back to the market stronger and better positioned if the CEO adopts to new strategies. Promoting product quality would serve to preserve the brand name of the company and instituting advanced marketing strategies would promote Lululemon on a global level. Moreover, controlling small issues such as customer complaints could help eradicate the possibility of the company’s reputation being damaged. In the ever highly competitive yoga industry where there is a threat of new entrants every day, strategies to make use of the untapped market would gain a competitive advantage for you. Conclusively, the CEO should adopt such strategies fast and for a long term application if there is to be reformed Lululemon Atletica Inc. beyond 2014.
References
Barney, J. B., & Hesterly, W. S. (2010). Strategic management and competitive advantage: Concepts and cases (pp. 4-25). Upper Saddle River, NJ: Prentice Hall.
Edwards, J. (2015). The Long, Strange History of Lululemon: North America’s Weirdest Clothing Brand. Business Insider, 4.
Thomas, J. B., & Peters, C. (2015). Lululemon Athletica and a series of bad marketing decisions. Journal of Critical Incidents, 8, 102-05.
Mount, I. (2013). Clothing companies trying to find more direct paths to customers. The New York Times.
Thompson, A., Peteraf, M., Gamble, J., Strickland III, A. J., & Jain, A. K. (2013). Crafting & executing strategy 19/e: The quest for competitive advantage: Concepts and cases. McGraw-Hill Education.