busi 690 individual case study part 1

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Policy and Strategy in Global Competition – BUSI 690

CG • Section 8WK • 11/08/2019 to 04/16/2020 • Modified 09/05/2023

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Course Description

This capstone course integrates the concepts, techniques, and knowledge of all areas of business administration. This course may not be substituted for or transferred in from another institution. This course is the capstone course and must be taken in the final term of enrollment.

For information regarding prerequisites for this course, please refer to the  Academic Course Catalog .

There is a need for a “capstone experience” in the MBA program that requires multi-disciplinary knowledge and skills including: overall strategy, marketing, operations management, human resource development, finance, accounting, economics, asset management as well as behavioral and ethical elements.

Course Assignment

Course Requirements Checklist

After reading the Syllabus and Student Expectations , the student will complete the related checklist found in the Course Overview.

Read & Interact Textbook Assignments (12)

Using the Thompson text, the student must read the chapter and complete the Connect LearnSmart assignments designed to deepen student understanding of the topics covered in each chapter.

Homework Assignments (12)

Using the Thompson text, the student must complete a series of experiential exercises. The student must apply text material to a real organizational situation and answer the multiple choice and short essay questions. These exercises must be completed through the Connect provided in the assigned modules.

The quiz is used as a measurement and analysis tool of classroom learning as required by the ACBSP national accreditation standards.  ACBSP accreditation requires classroom learning to be measured and analyzed. That means LU must measure and report learning progress to ACBSP three times throughout your degree program: at the beginning, the middle, and the end.

For each assessment, your score will be compared with the scores of students from 15 other ACBSP accredited schools. Thus, we need you to take this assessment very seriously and for you to do your best in each assessment, as a result points are awarded based on your score on the exam.

The points earned will be awarded based on the following exam score scale:

Using the case assigned from the Thompson text, the student must complete an in-depth case analysis, divided into three sections.  The student will utilize the entire strategic management process.  Students will submit the narrative including references and appendices using Word and Excel.

Using the case assigned in Case Study: Matrices Assignment, the student will complete the in depth analysis to include historical financial statements for a minimum of three years, financial ratios, and the firms main competitors ratios.

A descriptive analysis of the suggested corporate strategy based on financial position should be included.  The items will be submitted using a Word document for the narrative and an Excel document for all financial information.

Integration of Faith Assignment

The student will write an essay that is a minimum of 500 words in current APA format, explaining how his/her Christian worldview or biblical financial principles will impact the policy and strategy theory created in the individual case study, within a business world context. 

Using the case assigned, the student will complete the in depth analysis to include projected financial statements for a minimum of three years, NPV calculations of the strategy chosen, and descriptive analysis of the strategic choice and alternative choices.

Each case study is an in-depth case analysis requiring each individual to utilize the entire strategic management process. The items from Parts One and Two should be combined in this final compilation.

NOTE: The narrative must be at least 15 pages of text. The last section of the narrative should fully discuss the proposed strategy, rationale for choosing the strategy and discuss how the proposed strategy initiative will increase cash flows.  Any feedback from Parts One, and Two should be corrected before submission.

The student will complete 1 quiz within the third party platform, Connect Plus. Each quiz will be open-book/open-notes and the grade will transfer to Canvas.

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ABC Corporation under armour Historical Financial Statements...

ABC Corporation under armour

Historical Financial Statements (Income Statement, Balance Sheet and Statement of

Cash Flows) from the 3 most current years for the firm. These should be downloaded

from the SEC website. EDGAR Search Results (sec.gov) The financial statements must include horizontal (shown

between the years) and vertical analysis (shown to the right of the last year of

historical data).

2. Ratio analysis for the ratios shown on Table 1 in the Guide to Case Analysis (CA) of

the textbook:

a. Profitability ratios

b. Liquidity ratios

c. Leverage ratios

d. Activity ratios

e. Price-to-earnings ratio

f. The changes between years are included in the calculations.

3. Competitor ratios to compare with the ratios that were calculated in item 2. These

should be included on the same tab as the ratio analysis for the firm.

4. Financial analysis should include comparisons to the firm's main competitor as well

as to the industry. How does the financial position of the firm influence the strategic

direction of the company? This section should not be used to define what each ratio

Page 2 of 6

is rather it should clearly provide analysis based on the calculations as to the strategic

choices and implications of the firm's financial position. A compare and contrast

with the main competitor should be included in this section of narrative.

Place the results of Case Study: Historical Financial Analysis, in the Case Study: Historical

Financial Analysis submission link in Module 6: Week 6.

Options to Download SEC Financial Data into Excel Spreadsheets:

There are two ways to pull financial data in Excel format from the SEC site, depending on how

recent the information is.

OPTION 1: For filings that are a year or two old

 Go to www.sec.gov.

o In the Filings & Forms box, click on Search for Company Filings.

o Then click on Company or fund name, ticker symbol, CIK (Central Index

Key), file number, state, country, or SIC (Standard Industrial Classification).

o Enter either a company name or ticker symbol into the appropriate box. (Note: it

may be easier to use a ticker symbol because this guarantees you have the right

company.) Choose Find Companies.

o On the next screen, select the appropriate filing or filter by filing type (10-K).

o Newer filings have two button options: Documents and Interactive Data. Select

On the next screen, select the appropriate filing or filter by filing type (10-K).

Interactive Data if that is an option.

Once in Interactive Data, select financial statements. A drop-down box will

appear in the left-hand column. Select the statement that you want. Then, click

View Excel Document above the left-hand column.

OPTION 2: For older filings

 Follow the steps in Option 1 to get to the company filing screen. Since Interactive Data

will not be available, click on Documents.

o There will be several options. Find the link containing the full filing. This is

usually the first link but not always. For a 10-K filing look for a link titled 10-K.

 Open Excel. Click on the Data tab in the ribbon and select From Web, the second icon

from the left.

o A web browser will open up. Copy the link from the company 10-K and insert it

into the New Web Query browser that opened up. Click Go to be taken to the

filing. (Note: The browser sometimes runs slow.)

o Find the financial tables you wish to import. Above the tables you should see a

yellow box with a black arrow pointing to the right. Click on each box

corresponding with each financial table that you wish to import. The box will turn

green with a check mark.

o Once all desired tables are selected, click the Import button at the bottom right of

the web browser.

o You will be taken back into the Excel spreadsheet with an Import Data box

open. To import the data, select either a cell in the existing worksheet or New

Worksheet and click OK.

o Data will be uploaded into Excel. Note that this process does a poor job of

formatting the tables. Brackets indicating negativity and currency symbols are

often placed in adjacent cells, necessitating manual entry. For year-over-year

analysis across multiple filings be careful to ensure that financial sheet items line

up with one another.

Answer & Explanation

1. Go to www.sec.gov.  2. In the Filings & Forms box, click on Search for Company Filings.  3. Then click on Company or fund name, ticker symbol, CIK (Central Index Key), file number, state, country, or SIC (Standard Industrial Classification).  4. Enter either a company name or ticker symbol into the appropriate box. (Note: it may be easier to use a ticker symbol because this guarantees you have the right company.) Choose Find Companies.  5. On the next screen, select the appropriate filing or filter by filing type (10-K).  6. Newer filings have two button options: Documents and Interactive Data. Select Interactive Data if that is an option.  7. Once in Interactive Data, select financial statements. A drop-down box will appear in the left-hand column. Select the statement that you want. Then, click View Excel Document above the left-hand column.

1. Go to www.sec.gov.  2. In the Filings & Forms box, click on Search for Company Filings.  3. Then click on Company or fund name, ticker symbol, CIK (Central Index Key), file number, state, country, or SIC (Standard Industrial Classification).  4. Enter either a company name or ticker symbol into the appropriate box. (Note: it may be easier to use a ticker symbol because this guarantees you have the right company.) Choose Find Companies.  5. On the next screen, select the appropriate filing or filter by filing type (10-K).  6. Open Excel. Click on the Data tab in the ribbon and select From Web, the second icon from the left.  7. A web browser will open up. Copy the link from the company 10-K and insert it into the New Web Query browser that opened up. Click Go to be taken to the filing. (Note: The browser sometimes runs slow.)  8. Find the financial tables you wish to import. Above the tables you should see a yellow box with a black arrow pointing to the right. Click on each box corresponding with each financial table that you wish to import. The box will turn green with a check mark.  9. Once all desired tables are selected, click the Import button at the bottom right of the web browser.  10. You will be taken back into the Excel spreadsheet with an Import Data box open. To import the data, select either a cell in the existing worksheet or New Worksheet and click OK.  11. Data will be uploaded into Excel. Note that this process does a poor job of formatting the tables. Brackets indicating negativity and currency symbols are often placed in adjacent cells, necessitating manual entry. For year-over-year analysis across multiple filings be careful to ensure that financial sheet items line up with one another.  

The first step in performing a historical financial analysis of a company such as ABC Corporation is to retrieve the past three years of financial statements from the SEC website. This can be done in two ways: the first option is to use the SEC's "Interactive Data" service, which allows users to view and download the financial statements directly in Excel format; the second option is to use the "Documents" service, which requires users to manually download the financial statements in HTML format and then manually transfer the data into Excel.

Once all of the financial statements have been downloaded, the next step is to perform a horizontal and vertical analysis of the data. Horizontal analysis is the comparison of a company's financial performance over multiple years. This is done by calculating the percentage of change in each financial statement item from one year to the next. For example, if ABC Corporation's revenue for the first year is $10 million and for the second year is $11 million, then the percentage of change in revenue between the two years is 10%. Vertical analysis, on the other hand, is the comparison of a single item to the total of all items on the same financial statement. This is done by calculating the percentage of the item relative to the total. For example, if ABC Corporation's total liabilities for the first year are $5 million and its current liabilities for the same year are $2 million, then the percentage of current liabilities relative to total liabilities is 40%.

The next step is to perform a ratio analysis of the data. This involves calculating various ratios to gain insights into a company's performance. The ratios are divided into five categories: profitability, liquidity, leverage, activity, and price-to-earnings. The profitability ratios measure a company's ability to generate profits and include the gross profit margin, operating profit margin, net profit margin, and return on assets. The liquidity ratios measure a company's ability to meet its short-term financial obligations and include the current ratio, quick ratio, and cash ratio. The leverage ratios measure a company's ability to meet its long-term financial obligations and include the debt-to-equity ratio, debt-to-assets ratio, and times interest earned ratio. The activity ratios measure a company's efficiency in using its assets and include the inventory turnover ratio, accounts receivable turnover ratio, and total asset turnover ratio. The price-to-earnings ratio measures a company's stock price relative to its earnings and is calculated by dividing the company's share price by its earnings per share.

The final step is to compare the company's ratios to those of its main competitor and to the industry. This allows for a more thorough analysis of the company's performance, as it provides an indication of the company's relative strength or weakness in comparison to the competition and the industry. By analyzing the ratios in comparison to the competition, investors can make more informed decisions about the company's potential for success. Additionally, the analysis can be used to inform the company's strategic direction as it can provide insights into areas where the company is performing well or areas where it is lagging behind the competition. For example, if the company's return on assets is significantly lower than that of its main competitor, then the company may need to focus on improving efficiency and reducing costs in order to boost its return on assets.

In conclusion, performing a historical financial analysis of ABC Corporation involves retrieving the past three years of financial statements from the SEC website, performing a horizontal and vertical analysis of the data, performing a ratio analysis of the data, and comparing the company's ratios to those of its main competitor and to the industry. This analysis provides investors with insights into the company's financial performance and allows the company to identify areas for improvement in order to stay competitive in the market.

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Case Study 1, Matrices, Publix Supermarkets, BUSI 690

• BUSI 690 (BUSI690)
• Institution
• Liberty University
• Crafting and Executing Strategy

This Case Study provides historical background, existing mission objectives, a new mission statement, and a projected strategy for Publix Supermarkets. A SWOT, TOWS, PESTEL, and competitive forces matrix is constructed to align future strategic objectives. Comparisons are made with Kroger and Wal-M...

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Case Studies 1-3, Publix Supermarkets, BUSI 690

• 1. Case - Case study 1, matrices, publix supermarkets, busi 690
• 2. Case - Case study 2, historical financial analysis, publix supermarkets, busi 690
• 3. Case - Case study 3, projections npv compilation, publix supermarkets, busi 690

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Case Study Historical Financial Analysis Lululemon

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 1

Case Study – Matrices Assignment, Lululemon Inc.

Policy and Strategy in Global Competition

Close Comments

Good work on this week’s assignment!

The SWOT analysis did not include the IFE and/or EFE matrix as indicated within the rubric. Also,

you provided no or little narrative analysis (articulation), as noted in an announcement and grading

rubric, for the TOWS analysis found. Ensure you provide narrative for all charts or diagrams as

noted within the grading rubric.

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 2

Lululemon Athletica Inc. is considered to be one of the leaders of athletic apparel within

the athletic market. The company makes a variety of clothing that their customers enjoy. Some

of the items include T-shirts, pants, shorts, and their popular yoga pants. The company has been

known to sell a lifestyle vice selling athletic apparel. As of February 2020, the company has 491

stores in 17 countries and an online presence on its website (Thompson & Harris, 2022).

In 1998, Chip Wilson founded the lululemon company. Chip previously owed a surf and

snowboard company and later transitioned into clothing. Starting a clothing company came to

mind when Chip was taking a yoga class in Vancouver and realized the need for comfortable

clothing while performing yoga. With no hesitation, Chip opened a yoga studio in 1998 that also

sold clothing. The company's first actual store was opened in Vancouver, Canada, in November

2000 and called Lululemon. In the store, he sold clothing that he and his wife created. With the

incredible and unexpected success that the store developed, Wilson decided to expand. He

believed that the expansion would allow him to provide quality products to people who intend to

live a healthy lifestyle. Expanding would also allow him to provide his staff members the

opportunity to experience a fulfilling lifestyle by providing them with a meaningful salary.

Today, design facilities and stores can be found in Canada, the United States, India, Israel,

China, and many other countries worldwide.

After years of being in business, it was apparent that Lululemon Apparel was starting to

become a brand name within the yoga and athletic wear world. The brand became so popular that

mall owners/operators began seeking leasing options for the foot traffic they knew would come

with the partnership.

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 3

Lululemon Inc. is very strategic when it comes to sales. The company sells its

merchandise through several retail stores and has an online presence. Five years after opening its

first store, the company had expanded and had a total of 27 company-owned stores and two

franchise stores. In 2005, the company saw its sales increase to $85 million. Wilson saw his

dreams come through by providing comfortable clothing and creating jobs for others.

To assist in the company's expansion, Lululemon had to sell 48 percent of the company

to two private investors. Due to the expansion, Lululemon Athletica Inc was born. The company

ended 2006 with 41 owned stores, ten franchise stores, net revenues of $149 million, and net

income of $7.7 million, and in 2007, the company went public. Lululemon has dominated the

athletic apparel industry and has become a brand name associated with style, sports, and fitness.

The company has built a reputation worldwide and has seen enormous revenue each year.

Existing mission, objectives, and strategies

Lululemon's mission statement states, "To elevate the world from mediocrity to

greatness." The company's mission is to "Creating components for people to live longer,

healthier, fun lives." Their mission/mission statement suggests that the company has a different

perspective from other athletic brands and any other businesses. The statement indicates that the

company wishes to give its customers a lifestyle rather than another company with a brand.

Elevate the world by realizing its full potential. Inspire change by transforming its

industry and creating a healthier world. The company has a set of values that puts quality first.

The aim is to provide customer satisfaction and ensure the customer receives what they were told

they would receive. This shows that the brand is committed to changing as the world changes

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 4

and the styles change as they maintain their lifestyle of comfort clothing. An example of this

would be the convenience of shopping online.

The company aims to grow the business in North America, where most of its revenue

comes from. Once the company has grown in North America, they would like to expand to other

countries even more than they are currently doing. Another strategy would be to increase their

brand awareness online and through their customer service. Another strategy the company wants

to introduce is increasing their new product technology. The company also introduced its pickup

in-store option when customers order online. Doing this gives customers the comfort of shopping

at home but still receiving the same experience of shopping in-store. The company has seen sales

increase by 45%, and direct-to-consumer revenue jumped to 155% in Quarter 2 of 2020.

New Mission Statement

• Customers: The study suggests that the company targets men and women in middle

upper class and higher. The company initially targeted women that were interested in yoga. As

the study stated, this is the case that yoga paved the way for their company to expand. In 2013,

the company aggressively took more consideration for their male customers. Their focus was an

age group of men concerned about living a healthier lifestyle.

• Products or services: The firms' major products are athletic wear and mainly catered to

their female customers. Their attire allows its customers to accomplish activities feeling

comfortable but trendy. The yoga pants that the company sells promote fitness and encourage a

particular lifestyle. Lululemon's product innovation uses updated technology that makes the

customer feel comfortable. The technology used in their products makes it easier to consume

sweat and is breathable. Their services allow them to partner with yoga studios and run clubs.

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 5

• Markets: As the case study suggests, the company continues to add Lululemon stores in

its primary United States market and as well as worldwide. The company included 16 new stores

in China throughout the years and planned to add more in 2020. The company also opened stores

in Japan, Germany, France, the United Kingdom, Malaysia, Netherlands, South Korea, and many

other countries. As clearly illustrated, the expansion allowed the company to report incredible

advancements with their strategic progress in geographical market expansion.

• Technology: As indicated in the case study, the company continues to improve

In the technological area. The company focused on creating and providing products that

introduced fabrics with technological improvements and performance-enhancing features

throughout the years. These technological upgrades to their products have assisted the company

in expanding its market share worldwide. Customers enjoy wearing Lululemon's products

because of its technology and how it makes them feel about themselves. As the company makes

new products, they continue to incorporate technology within their product lines.

• Concern for survival, growth, and profitability: The company understands that the

the only way they will survive in this market is through expansion. Direct-to-consumer sales

through their website have become a critical component for the company. As indicated in the

reading, in 2011 the lululemon's e-commerce sales increased from $106.3 million to $1.14

billion in the financial year ending 2019. During the pandemic, Lululemon's majority of retail

outlets in the domestic market were closed. Like many other businesses that figured it out,

ordering online became the way to continue profit. This showed that the company could adjust

through diversity overcome slight roadblocks and profit.

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 6

• Philosophy: The company takes its philosophy stance seriously as it aligns with its core

values and its mission. As it states, it allows "people with the components to live longer,

healthier and more fun life." Lululemon is set up to and has arranged to operate the company in

the methodology in which it is stated within their mission. The company attempts to manage its

staff ethically and encourages all to follow its motto. Ensuring the company is managed

accordingly starts with the staff then the suppliers to ensure the products are produced and sold

within company standards.

• Self-concept: Lululemon's specific product design and its processes for innovation is the

The reason it can make quality products. This is believed to be the key to its competitive

strength. Lululemon had to make well-designed products that offer a comfortable fit and

competitive pricing to be competitive and set itself apart in this competitive athletic apparel

market. Within this market, the company competes with brands such as Nike, Adidas, Reebok,

and Under Armor, as stated in the strategic group map within this paper. Additionally, the

company sets itself apart by focusing on the customer and what they want. Lululemon

understands the importance of customer relationship management and promoting brand loyalty.

This is part of their strategic market approach.

• Concern for public image: Yes, the company is responsive to community needs through

its business processes. One way it does this is by "Omni Guest Experiences." It uses a marketing

strategy that connects them with people who shop at its stores. The company creates

opportunities through communities to live "sweatlife" and live long healthy lives. Through this

avenue, people can connect. The company also takes part in dealing with environmental issues

by following environmental protection protocols in its supply chain and within the community.

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 7

• Concern for employees: es, employees are an asset to the firm. Lululemon

provides its staff members with a supportive and encouraging working environment. It aims to

encourage its employees to set goals in their personal and professional life. The employees are

valuable assets of the company, and it shows in the numerous employee programs that lululemon

offers. Some of these programs include personal development workshops and goal-coaching

courses, just to name a few.

SWOT Analysis

A successful company such as Lululemon Inc needs to identify its areas of concern. To

do so, it first needs to be identifying their issues by creating a SWOT matrix to include the four

categories. When thoroughly conducted, the chart will show the company the improvements it

needs to improve its sales or achieve sales goals.

Lululemon was created to create apparel for people to live healthier lives and have fun

doing so. The first thing someone needs prior to starting a business is vision. In 1998, Wilson

had a vision to "elevate the world from mediocrity to greatness" (Thompson & Harris., 2022, pg.

C-81). The company hoped to serve their customer at all costs and be a leader in customer

satisfaction. Understanding this, their strength is the detail they put in their clothing. Their

fabric's comfortable fit and feel has made them a trusted brand. The technology that the company

puts in its line cannot be duplicated. The clothing prevents odor as the material restricts bacteria

and can be washed often without worrying about washing away (Thompson & Harris, 2022).

Another strength the company possesses is being aware of its brand and the market. From

the date of conception, the company has never switched or changed who they were. Lululemon

Inc. has gained notoriety from its competitors as well as customers. Due to brand awareness, the

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 8

company has jumped from 40% in sales in 2020. Wilson has also created a strong relationship

within the community. The company's mission statement resonated with its core audience.

The company's weaknesses may be attributes that they stressed with their strengths.

Lululemon has a reputation for creating comfortable and excellent quality clothing. This is all

too apparent because it is part of its mission statement and sales strategy. In 2013, the company

saw issues with one of their pants lines that recalled the item. Another recall occurred in 2015

where the tops were said to have an issue with the neck area. All these concerns with the clothing

did do not reflect their mission statement.

Another weakness the company has is its pricing compared to all its competitors' prices.

The company has set itself as a high-end company, while its competitors like Under Armor sell

affordable clothing with the same comfortable quality. Another weakness would be the

constraints on the company with supply chain issues.

Opportunities

When speaking of opportunities, the company has left an opening in the market for its

competitors. Through the years, Lululemon has focused on women's apparel. The company's

competitors have seen significant gains with men's athletic apparel, which has accounted for over

half of their sales. In 2020, research showed that more men are shopping for athletic gear than

women. Men are now accounting for more of the sales than women. With the growth of men's

athletic apparel, the company should try to focus on shifting its focus on capitalizing on the

recent surge of sales. CEO Laurent Potdevin stated, " Retail is evolving at an increasingly rapid

pace" Potdevin added, saying, "consumers now connect with brands in a way that is driven by

experiences, rather than transactions" (Shaw, 2016).

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 9

A great opportunity for the company would be to open more stores in the United States.

In 2020, the U.S will lead apparel sales within the market with sales of 160 billion dollars. In

2021. According to the article, "The market is growing enormously, as people are progressively

enticed by the product's capability to offer sweat-wicking and breathability and enhancement of

physical movement" (Fortune Business, 2021).

The critical threat that should be listed is the threat of other companies. The price of their

competitors is reasonable and well below that of Lululemon's. The price of yoga pants was 20%

lower than that of their competitors. Other stores also provide significant discounts that

Lululemon does not. Another threat is that Lululemon does not provide a wide range of sizes like

its competitors. The company typically caters to smaller sizes like sizes 2 to 12. At the same

time, other stores like Under Armor sell XL and XX clothing. The final threat might be the

possibility of a company creating better quality at a better price than Lululemon. The company

must remain vigilant and continue looking for better quality at an affordable cost.

SWOT Analysis Chart

Strengths (Internal Factors) Weaknesses (Internal Factors)

• Lululemon Inc. is not only one of the most prominent t and fastest Athletic

clothing apparel globally, it is also one of the

most profitable and respectable brands.

• Lululemon Inc has a signature line of Yoga apparel is often imitated but cannot be

duplicated in quality or price.

• The company leads the market in brand Awareness from 40% in 2020.

• The company has a strong relationship within the community.

• The company must deal with Recalls that goes again their mission statement.

• Clothing not fitting comfortable or pilling in the inner thigh.

• Shirt tops are a threat to safety.

• Using third-party suppliers within their distribution supply chain. Causing time delays

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 10

Opportunities (external factors) Threats (external factors)

• The company should focus on Men’s clothing to capitalize on the surge of men’s

interest in athletic apparel.

• The company should capitalize on the massive numbers that North American

generates for sports apparel by opening more

North America stores.

• Lululemon has many competitors in the athletic clothing arena, such as Under

Armor, Athleta, Adidas, and Nike.

• Many of its competitors offer more sizes of clothing. Those companies cover a more

comprehensive range of customers that

Lululemon cannot reach.

Tows Matrix

The TOW Matrix listed will assist in the strategic planning that Lululemon can use to

enhance its strengths, eliminate its weaknesses, and avoid the challenges identified within the

threats. The Matrix shows how the company can benefit from opportunities to enhance its profit

TOW Matrix Chart

TOWS MATRIX

LULULEMON INC.

Strength – S (Internal)

1. An existing Brand

2. A loyal customer base

3. Brand awareness

Weaknesses – W (Internal)

1. Company Recalls/ Brand

2. Clothing issues

3. Third-party support

Opportunities – O (External)

1. Cross-selling

2. New Markets

3. New services

Strengths/Opportunities SO

Leverage the strength to

maximize the opportunities at

hand. = Attaching strategies

Weaknesses/Opportunities WO

Counter weakness through

exploiting opportunities = Build

strengths for attacking strategy

Threats – T

1. New competitors

2. Old competitors

3. Customer choices

ST Strategies

Leverage strengths to

minimize threats = Defensive

WT Strategies

Counter weakness and threats =

Build strengths for defensive

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 11

Strategic Group Map

The strategic group map of Lululemon depicts a brand that all belongs to the athletic

apparel market. The prices, the quality of the brand, and the customer's viewpoint then its reality

the group map depicts them as such. Lululemon has made a name for the brand by having good

quality products. The company also has a substantial female following. The Under Armer and

Columbia company is more well-known and caters to a broader market with more sports apparel.

Nike, Adidas, and Reebok are the signature brand. They are well known in sports and highly

marketable within sports franchises. As shown on the map, these companies are highly favored

and have a competitive edge over the other companies. The companies listed are highly

competitive and are some of the world's most recognized brands within the market. As listed,

"The annual revenue of these three competitors approaches $50 billion, with Nike achieving

revenues of more than $25 billion, Adidas nearly $20 billion, and Under Armor topping $2

billion" (Jensen et al., 2016, para. 2).

Strategic Group Map Diagram

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 12

PESTLE’s Analysis

The company was able to stay ahead of the tariffs bill enacted for China. The company

has limited its exposure to China as the U.S placed a levy of 15% on most clothing from China.

The company was well ahead of the bill, shifting to other locations.

Canada remains a stable country with no significant economic issues that could affect the

companies' earnings. This also factors the pandemic that plagued the country and the rest of the

world. Its Canadian clients are willing to spend their money, and the company is thriving within

that market

Certain social factors drive every market. This will determine how customers and clients

respond to the market. The company could use yoga as a feel-good experience and create an

experience for their customers. Also, In the wake of Covid-19, people stopped going to the stores

and started buying products and merchandise online. The company was able to capitalize on and

improve its online presence. Store sales suffered due to closures, but the company's online

business surged 70%, accounting for 54% of overall sales compared with 27% a year earlier

(Terlep, 2020).

Technological

The company has invested accurately in the latest technology through sound and

deliberate strategic moves. This strategic step has given the company the ability to improve the

efficiency of its product and maintain customer satisfaction. Doing this has also secured their

competitive advantage over their competitors.

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 13

Not all companies can follow all rules and regulations dictated by certain regions that

they operate in, but lululemon has followed the legal stipulations by law. They have remained

compliant with regulations as required to operate. They have avoided fines that would affect

their bottom line.

Environmental

Lululemon strives to lead from the front in limiting emissions within the atmosphere. The

company also manages its waste accurately before it goes out in the environment. They

understand that if they do not respect the environment, it may negatively affect their reputation.

PESTLE Chart

Political Economical

1. Tariffs on Chinese goods 1. Stable economy

2. COVID 19

Social Technological

1. Using Yoga as a feel-good idea across the

2. COVID 19.

1. Constant technological innovations to

enhance customer satisfaction.

2. Technolgy for fit and performance.

Legal Environmental

1. Ensuring tax laws are adequate in all

1. Limit waste footprint

2. Balancing greenhouse emissions

3. Accountability for raw materials

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 14

Porter’s Five Force’s Chart

Competitive Rivalry

Lululemon has multiple competitors, and they are aware of that. Some of these

competitors are Nike, Adidas, Reebok, and Under Armor, just to name a few. As far as cost,

Lululemon prices are higher than their competitors, and the company does not provide discounts

on their product, unlike its competitors, which offer a more comprehensive range of discounts.

Supplier Power

Lululemon has a great partnership with its suppliers. This is due to having multiple

suppliers throughout different countries with which they have created a strong relationship. Due

to their strategic approach, lululemon has enforced strict ethical manufacturing practices within

the facilities.

Buyer Power

Lululemon does not offer discounts on its apparels at their main store. The company does

provide discounts on merchandise but only at their few outlet stores. The company prices on

their products are much higher than their competitors, but it is due to the material and fabrics

they use to make their products. The company states that premium raw material is what they use,

and the cost of those materials is much more than what their competitors are using.

Threat of Substitution

Many athletic gear producers within this market, such as Nike, Adidas, and Reebok.

These companies make it easier for lululemon customers to stay loyal to the company. The loyal

consumers of the lululemon company would consider these companies as substitutes. Meaning

their quality would never match up to those of lululemon.

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 15

Threat of New Entry

The possibility of new entry within the industry of high-quality athletic gear is low. This

is because the apparel market requires a large amount of capital even to begin. If a new entrant

attempted to step into the market, the new company would need much money to compete.

Industry Rivalry

Nike, Adidas, Under

Armor and many others.

Legal Constraints Threat of new entrants

Bargaining power

of suppliers

of consumers

Threat of substitute products

-Low entry barriers due to the internet

-No cultural barrier,

athletic clothing worn by

-Environmental Conditions

-increase material pricing

-relationship with

-Product service

-Buyer Choice

-Brand loyalty

-An attractive industry to get into.

-Trendy clothing and

comfortable.

-Many customers for that

CASE STUDY: MATRICES ASSIGNMENT - LULULEMON INC. 16

Fortune Business (2021). Apparel & Footwear.

https://www.fortunebusinessinsights.com/sportswear-market-102571

Jensen, J. A., Wakefield, L., Cobbs, J. B., & Turner, B. A. (2016). Forecasting sponsorship costs:

marketing intelligence in the athletic apparel industry. Marketing Intelligence &

Planning, 34(2),

https://www.proquest.com/central/docview/1776674712/DBA5DAE211F4463FPQ/6?acc

ountid=12085

Press, T. C. (2020). Lululemon withholds 2020 forecast due to COVID-19 as Q4

profits rise - BNN Bloomberg. https://www.bnnbloomberg.ca/lululemon- withholds-2020-

forecast-due-to-covid-19-as-q4-profits-rise-1.1413041

Shaw, H. (2016). Lululemon sales jump with athleticwear frenzy; Lululemon sees sales jump 14

% in Q2. The London Free Press.

https://www.proquest.com/central/docview/2232496237/FE71AA3F095B4545PQ/1?acco

untid=12085

Terlep, S. (2020). Lululemon Sales Slump on Closings. Wall Street Journal

https://www.proquest.com/central/docview/2412018933/FE71AA3F095B4545PQ/2?acco

Thompson, A. A., Harris, R.D. (2022) Lululemon athletica’s strategy in 2020: Is the recent

growth in retail stores, revenues, and profitability sustainable? (23RD ed.). McGraw-Hill.

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