Question

Lululemon case study (Leadership, Culture, and Transition at lululemon)

1) Provides analysis of the internal environment of Lululemon using VRIN. Explain how your VRIN analysis supports the company to implement its strategy (cost differentiation strategy)

2) Provides analysis of the internal environment of Lululemon using Value Chain. Explain how your Value Chain analysis supports the company to implement its strategy (cost differentiation strategy)

3)Reflecting on your analysis, write a recommendation to the Lululemon board on which of (1) VRIN; or (2) Value Chain, represents a better methodology for guiding the implementation of their business-level strategy (Cost differentiation strategy).

Answer 1

1. Internal environment analysis of Lululemon using VRIN .

Value - Lululemon has developed the resources like sourcing fabrics which are technically suitable for manufacturing fitness and athletic apparel. The company has developed a supply chain for its products and closely follows up on quality and functionality of its products. The company has the unique strategy to promote its products through community leaders and interacting with customers in personalized manner in comfortable retail environment. The company has developed focused differentiation of providing products with values and benefits for health and fitness lifestyle.

Rare - Lululemon has developed a rare advantage through its strategy for innovation and focused efforts on developing customized products as per customer preferences and suitable for health and fitness lifestyle.

Imitable - Lululemon strategy of providing special fabrics with technical benefits for health and fitness apparels is non imitable as it patents and trademarks for its products and technology. The marketing and promotion strategy is non imitable as Lululemon focuses on a niche market and creates personalized relationships with customers for promoting the products and benefits. It has created customer loyalty and uses innovation for creating non imitable benefits for its business.

Non Substituable - The brand is non substitutable considering its unique and innovative strategy for its products and marketing. The company has developed a relationship with customers based on personal interaction and responsiveness to customer demands.

2. Internal environment analysis of Lululemon using Value Chain shows the company has developed a differentiation using its strategy for producing research products which offer benefits like use of technical fabrics for providing health and comfort benefits. The company outsources its manufacturing and developed a supplier based on standards of quality and expertise. The internal resources of the company are directed towards creating a customer oriented strategy and adds value to its products with community leaders and advise on health and fitness use of its products. It gathers insights to innovate and respond to customer preferences or creating customer loyalty and affiliations for its products.

The company implements its strategy through orientation of its resources for competitive advantage and customer satisfaction. It uses information systems, research and technology for improving its operations and develop products as per customer preferences and market intelligence. The company owns retail stores and maintain close association with customers and brand leaders to promote the use of its products. It has focus on the style, quality and comfort in developing its products and providing benefits for health and fitness based lifestyle.

3) The Value chain analysis represents a better methodology for guiding the implementation of their business-level strategy as its gives opportunity for growth and expanding the business to more customer segments and target markets. The company has focused differentiation for its products in niche markets which limits the potential to expand serve larger markets. It can continue offering its technology and research based products by creating a value chain which offers the opportunity to sell its products to a wider market with efficiency and increase awareness about its products. It will strengthen the brand image and value across consumer markets and help to deal with competition.