Lululemon Athletica Inc. Essay: Analysis And Insights.

Discuss about the Analysis Of Lululemon Athletica Inc.

Value chain analysis is the model that helps in analysing the different resources of the company (Gereffi and Fernandez-Stark, 2016). Lululemon Athletica Inc. is the company that deals with providing athletic apparel to the customers at premium pricing. Following is the value chain analysis of the company.

Firm infrastructure: The infrastructure of the company is appropriate. The company serves the market with stores and by yoga centres.

Human resource management: There are approximately 6000 employees associated with this company. The objectives of the employees at the individual level are aligned to the vision of the company.

Technology: Information system of the company supports almost all its operations. Some of the operations that are supported by the information system of the company are transactions, inventory management sales, procurement, purchase etc.

Procurement: procurement is done by following the supply chain of the company.

Marketing and sales: The Company believes that traditional methods of marketing are not required. The company tries to work closely with the gym professionals and fitness personals in order to promote the brand amongst the customers (Info.lululemon.com, 2018).

Operations and logistics:  Lululemon is the company that serves the customers through their retile stores. The very small percentages of its operations are conducted through wholesale market which serves only the yoga studios and fitness centres. Inventory needs are estimated and the products are outsources from countries. The distribution centre of the company is located at Washington, Vancouver, Melbourne etc. (Investor.lululemon.com., 2018).

Services: Two types of services that is in store and guest education services.

It is the approach that helps in identifying the competencies of the company by two of the tools such as VRIO or VRIN framework (Hoskisson, Gambeta, Green and Li, 2017). In this case VRIO framework is used to analyse the capabilities and resources of the company.

Resource/ capability	Rare	Valuable	Costly to imitate	Exploits opportunity	Strength/weakness
Company culture	Y	Y	Y	Y	S
Customer experience	Y	Y	Y	Y	S
Global expansion	N	Y	Y	Y	S
Customer loyalty	Y	Y	Y	Y	S
Brand popularity	N	Y	N	Y	S
Product innovation	N	Y	N	Y	S
Product variety	N	Y	N	Y	w

1. Variety of products: As the company is only dealing with the athletic products, it has been realised that the target market of the products become restricted which affects the growth of the company. Releasing new products in the related field can help the company to have better growth opportunities. The first and the foremost thing that the company should focus on is its growth rate which is declining. The company should make improvement in the process by analysing the market and the other companies working in the same industry. The products range that can be introduced by the company is within healthy drinks and juices.
2. Focus on marketing by advertising: focus on marketing should be increased by the company because customers have lot more options available in the market. It the company does not market the products effectively than the customers may switch to other brands that are more popular and known. Advertising is one of the medium that may help the company to be better visible in the market. As the company is using the endorsement strategy to market the products thus making the TV advertisements by using the known faces can help to attract more and more customers.
3. Better employee satisfaction: as the company has around 6000 employees working for it thus it is required to retain the same and make them satisfied. Offering exclusive discounts for the customers can be one of the strategies to motivate the employees.
4. Dealing with local dealers: As identified that the company serves the market with stores and from some of the yoga centres. It is important for the company to realise that dealing with other local dealers of the place can help the company to target more and more customers. This also helps the company to sell its products to the wider market. This strategy can be implemented if the dealers or the local retailers of the place get agrees to the deal and make contractual relationship with the company to sell the products. It is one of the great strategies to cover the larger area of the market.

It is the matrix that helps in analysing the various strategies of the company. This matrix has four parts as the strategies that will identify the company’s major actions in order to serve the market (Yin, 2016). This is the matrix that helps the senior manager of the company to plan the new strategies for the future growth of the company.

• Market development: As far as the case of Tesla is considered, it has been analysed that the major aim of the company in this category is to position the products in the new market of India and China as the aspirational products with great status value. Model S has been used by the company to target these new markets of India and China.
• Market penetration: Tesla has initiated so many step in this path by promotional campaigns, new pricing strategies etc. so that the company can penetrate itself in the market of USA and Europe (com., 2018).
• Product development strategy: it is the strategy in which the company has to develop a new product so that it can cater the already existing market with range of products and retain the customers. In case of Tesla, the company produced new products such as Model 3 and Powerwall. The company tries to cater the middle class target market by these models.
• Diversification: Tesla is the company that has increased its range of products so that it can cater the new market.it has been analysed that Model 3 and powerwalk were the products that are developed so that the company can cater the new market (com., 2018).

The mission statement of Tesla is “to accelerate the world’s transition to sustainable energy.” it is the statement that suggests that the business focuses on developing or producing the products through sustainable practices. There are three major components of mission statement of Tesla. The first component is to accelerate, the second one is the world’s transition and the third one is to sustainable energy.

Resource-based view

As far as the vision statement of the company is considered, it says “to create the most compelling car company of the 21^st century by driving the world’s transition to electric vehicles.” this vision suggests that the company focuses on the production practices that uses renewable energy. There are four major components of vision statement of the company that are most compelling, car company, 21^st century and transition to electric vehicles (Tesla.com., 2018).

In its business vision statement, Tesla, Inc. targets to be the most convincing in the industry. This component specifies leadership and superiority in the business. The company approaches this purpose by assimilating advanced technology in its electric automobiles and related products. On the other hand, the “car company” component of the corporate vision focuses Tesla Inc.’s efforts on manipulative and manufacturing cars. Later component suggests that the company wants to be the brand of the 21^st century and wants that each and every vehicle on the roads should be electric in nature.

1. To accelerate: it has been recommended to the company that as the company is making use of new technologies, these new technologies should be related to sustainable business practices and products that relied upon renewable energy.
2. Diversification: As far as the second component is considered, it is related to “the world’s transition”. This component of the mission statement of the company suggests that the company should focus on globalisation of the business and should not just restrict its strategies to penetrate in the local market. Diversification is also an important strategy that the company should focus on. It has been realised that the company should increase the product range in some different and related sector such as manufacturing of heavy vehicles or production of décor items for the vehicles etc.
3. It has been recommended to the company that, Tesla has to improve its market and marketing strategies in the new market. This is because it is not that popular in other countries except USA. Competitors are taking advantage of the popularity of the brands. Marketing the products by campaigning can help the company to win over the competitors. It has been recommended to the company that it should improve the presence of the company into the market and should focus on strategies to build brand visibility of the company. This helps the company to make better presence in the market and thus it is also required for the company to make changes in its marketing strategies.
4. Innovation and modifications in the products: it has been realised from the vision statement of the company that it wants the 21^st century to use electric vehicles and for this purpose, it is required by the company to make modifications in its products. The company can launch the already existing models with electric engines and auto gear along with manual gear system

It is the commercial bank that has its headquarters at Singapore. It is considered as one of the Asia’s leading banks (Dbs.com., 2018). The banks are known for its digital technology and its innovative practices.

SWOT analysis of the company is conducted in order to analyse the strengths, weakness, opportunities and threats of the company (Madhavaram, Hunt and Bicen, 2017).

Strengths:

• Strong market position: it has been analysed that the company is enjoying the strong market position as there is no other banks having such great digital technology services.
• Diversified products: another strengths of the company is they diversification of the products. The company has the products and offerings that serve high range of customers all over the market.
• Market presence: the bank serves around 4 million of customers in around 15 countries which is a great amount (com., 2018).
• High number of employees: the bank employs around 20000 employees. It has been analysed that the operations of this bank are very successful not only in Singapore but also in overseas countries.

Weaknesses:

• Dependency on Asian market: it has been analysed that DBS bank totally depends on the revenue from the Asian market and not has its presence so strong in the American market.
• Most of the chunks come from the consumer banking and other offerings earn less for the banks. Thus, bank has the opportunity to explore in other areas also.

Opportunities:

• Investment in others region: this is the most important opportunity that needs to be explored by the bansk.it is required by the bank to target other market also and not just focus on Asian market for its revenues (com., 2018).
• Asset management industry: it is another type of industry whose doors are open for DBS bank. It has been analysed that this bank can explore this opportunity in asset management industry to earn more revenue and expands its business.

Threats:

• Uncertainty in Asian market: the Asian market is not certain in its financial conditions. Even the world financial market is facing the issues of uncertainties and thus affects the business of DBS bank.
• High competition: As the banking industry is a growing industry. Thus, the competition is also increasing. The major competitors for DBS bank are Oversea – Chinese Banking Corporation Limited, HSBC and Standard Chartered Bank.

Threat of rivalry: HIGH

Threat of rivalry is very high in nature in the banking industry. It has been analysed that this industry has been evolving since year and it is not limited to traditional banking practices now. It has been analysed that most of the American banks are in queue to compete with DBS and thus there is threat of rivalry (Dbs.com., 2018).

Threat of new entrants: LOW

Threat of new entrants is fairly low because it is very difficult to enter this industry. The involvement of government and the legislation are the entry barriers along with the high capital requirement at initial level.

Threat of substitute: MEDIUM

Threat of substitute is medium in nature. There are many substitutes to the banking services such as mobile payments, credit and debit cards, wealth management organisations, mobile applications etc. These practices are competing with DBS in its core competencies of being digitalised (Dbs.com., 2018).

Bargaining power of buyers: HIGH

Bargaining power of buyer is very high in nature. This is because there are many banks available in the market and other substituted availability also weakens the bargaining power of banks in front of the customers.

Bargaining power of suppliers: LOW

In case of banks, the bargaining power of suppliers remains low as the banks have many customers who can invest and take the facilities and services of the banks.

1. Switch to other market: as discussed in the weakness section that the company is dependent on Asian market for its revenues and is not focussing on offering the services to other nations. It is required by the company to make efforts and serve the European customers so that the dependency can be shared and the company can earn more from other nations as well.
2. Service expansion: it is required by the company to increase its focus on services other than consumer banking. The major revenue is coming from consumer banking services and thus efforts need to be made to shift to other offerings as well. Another recommendation is to expand the business by adding the services other than the traditional banking services and also retain the customers by different loyalty offers. It has been analysed that there are many substitutes available and thus it is required by the bank to be more innovative in its offerings.
3. Mobile application: As the threat of rivalry is high thus it is required by the company to make the changes as per the competition and it needs to be innovative enough so that it can compete with the market. it is required by the bank to develop its own mobile application so that people can easily make use of the services it offers.

References:

Dbs.com. (2018). [online] Available at: https://www.dbs.com/annualreports/2016/english/pdf/01_DBS%20Annual%20Report%202016-Full.pdf [Accessed 17 Mar. 2018].

Dbs.com. (2018). [online] Available at: https://www.dbs.com/iwov-resources/pdf/investor/other-materials/2017/18th_AGM_slides.pdf [Accessed 17 Mar. 2018].

Gereffi, G. and Fernandez-Stark, K., 2016. Global value chain analysis: a primer.

Hoskisson, R., Gambeta, E., Green, C. and Li, T., 2017. Is my firm-specific investment protected? Overcoming the stakeholder investment dilemma in the resource based view. Academy of Management Review, pp.amr-2015.

Info.lululemon.com. (2018). History | lululemon athletica. [online] Available at: https://info.lululemon.com/about/our-story/history [Accessed 17 Mar. 2018].

Insiders.morningstar.com. (2018). LULU Lululemon Athletica Inc Executive Compensation. [online] Available at: https://insiders.morningstar.com/trading/executive-compensation.action?t=LULU [Accessed 17 Mar. 2018].

Investor.lululemon.com. (2018). Management & Board of Directors | lululemon athletica. [online] Available at: https://investor.lululemon.com/management.cfm [Accessed 17 Mar. 2018].

Madhavaram, S., Hunt, S.D. and Bicen, P., 2017, May. The FREE (Firm Resources and External Environment) Framework as an Alternative to SWOT: An Abstract. In Academy of Marketing Science Annual Conference (pp. 49-49). Springer, Cham.

Tesla.com. (2018). The Mission of Tesla. [online] Available at: https://www.tesla.com/blog/mission-tesla [Accessed 17 Mar. 2018].

Yin, N., 2016. Application of AHP-Ansoff Matrix Analysis in Business Diversification: The case of Evergrande Group. In MATEC Web of Conferences (Vol. 44). EDP Sciences.