lulu lemon International Business

Founded in 1998, the success of lululemon has poured into more markets than just the small Vancouver BC shop it started in. Dennis ‘Chip’ Wilson, decided to move away from the surfing and skating market- which he had success in over the years- to a yoga market. He opened the first lululemon in Kitsilano BC and shared the space with a yoga studio. In a little over ten years, lululemon, has become the only publically traded retail or apparel store in North America, with over 100 retail stores, $340million in annual revenue.

Lululemon designs and manufactures yoga wear. Using yogis and athlete feedback, lululemon caters specifically to the athletic market. The brands target market is primarily active men and women: individuals that work, play and share the vision of creating healthier, happier and more fun lives. The brand is considered to be high quality products but also act as symbol of status, especially when compared to imitators or inferiors. The company tries to cater to their clientele by allowing customers, staff and designers assist in the design process. Every city with a lululemon location hosts design team meetings where attendees can offer ideas for designs. The purpose is to ensure the consumer is happy with the product, and that it functions the way it needs to.

The culture of lululemon is undeniable. The stores and their merchandise bags are full of mantras that support their manifesto- ‘truth check’ and inspiration. The company’s vision- Elevating the world from mediocrity to greatness- is supported by the beliefs and values of the company. The cult-like following of lululemon is also part of its success; with little direct marketing the company has managed to convert the most coveted yoga teachers, and their students into clientele as well.

Lululemon currently has stores in Canada, USA, Australia and Hong Kong. It opened seven new stores in 2009; currently there are 133 stores worldwide:
~78 in the USA
~45 in Canada (including 3 ivivva stores- girls)
~10in Australia

There are also 52 showrooms- which are smaller versions of retail stores. The company plans to enter into the European and Asian markets in the future. Lululemon is already selling online, reaching a worldwide market. They rely on product quality and don’t focus on the price. With supporters like Oprah, the company has confirmed its message of a desirable brand, in Canada, USA and Australia. Though they don’t market directly- television or magazine- they company markets to their target market at community-based campaigns with free yoga or runs. They also provide apparel to yogis and running instructors as promotion. Lululemon does market research and strategically places stores in area that have yoga studios. The company was able to use their product to then enter into the market.

The largest challenge the company has had to overcome in its international operations is the manufacturing process. Lululemon wanted to keep their values no matter where the product was produced. Clothing was manufactured in Canada (just down the road from the first store), however lululemon has now taken that operation internationally, for the most part. Factories are now in Canada, USA, China, Taiwan, Peru, Israel, Cambodia, Thailand and Vietnam. The company also has two warehouses, one in the USA and one in Canada. Trying to stay true to their vision, lululemon claims their factories owners and managers share the same values as lululemon and they have assured their presence at each factory bringing the same tools for health and personal development to the factory staff (just as they do with employees).
The company has had remarkable success so far; moving the company into a European and Asian market could be a challenge. The cultural differences between the company’s current markets and potential (European and Asian) markets will need to be identified and the product may need to be adapted or selective. Though the lululemon does due diligence prior to opening a new location, these new markets have very different views and beliefs. Currently most of their locations are in coastal areas where health and fitness are important in people’s daily lives. Even expansion in the USA could be challenging; the eastern and central parts of the USA are less focused on self awareness- which is the main focus of lululemon. To mitigate this potential challenge, I would suggest the company continue to do their due diligence before entering a market. Know exactly what the consumers want in the market and don’t go forward with expansion if health and self-awareness are not predominant in the market.

The plans for expansion are not just into new markets, but also in current markets. Lululemon, plans to eventually have 300 store in the USA. The company may struggle to balance their vision and beliefs with their desire to expand to drastically.

This company has had much success since the single retail outlet opened in 1998. With expansion into three countries, an ever expanding product line, a business that relies on its culture, staff and community to build and maintain the brand, and the desire to continue with success, lululemon has become a model company. Lululemon is just breaking into the international market, their continued success with depend on the consumers in new markets and whether they believe in the message, vision and of course, if the current marketing plan remains successful.




References:
http://www.vancouversun.com/health/2010+strongest+company+lululemon+athletica/37...
http://www.lululemon.com/