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Lululemon Athletica Inc. in India

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Autor:   •  October 9, 2018  •  Term Paper  •  1,637 Words (7 Pages)  •  10 Views

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Introduction

        Determined to fabricate a high-end yoga athletic stylish clothing, Chip Wilson had founded Lululemon Athletica Inc. in Vancouver during 1998. He believes in a high vision, which focuses on creating a small community hub, where people could discuss and share the physical aspect of living healthier. Lululemon was created by a passionate founder, as today, up to 363 locations are placed all around the world (Kell, 2016). Therefore, the idea of using their stores as a community hub became too complicated to handle. In turns, they started to train their employees harder, so the employees could positively influence their surroundings, communities and customers. Overtime, Lululemon has acquired their reputation for valuing a high quality product over the aspect of quantity. They do not only manufacture a premium quality of clothing, but they also emphasized the importance in building relationships (Lululemon Athletica, 2013).

Between 2013 and 2015, Lululemon has suffered from some design defects, such as dangerous drawstrings or the see-through yoga pants. As the year 2016 started, the company is determined to keep the focus on the brand by improving its product design, its production, and the supply chain. Despite the high competition, they believe that the brand is still one of the strongest in the athletic wear market. Today, Lululemon is recognized as one of the fastest growth company in Canada. Its stock is increased nearly up to 30%, and analysists are expecting an increase in the sales of up to 15% (La Monica, 2016).

The report is divided into five (5) sections, in which an analysis on different aspects of the company will be conducted in order to assess its feasibility to expand its brand to India.

Retrieved from:

(Kell, 2016): http://fortune.com/2016/04/18/lululemon-lab-new-store-nyc/ 

(La monica, 2016): http://money.cnn.com/2016/06/07/investing/lululemon-earnings-chip-wilson/ 

Company and Market Assessment

Lululemon operate in a large industry and there are many large players such as Nike, Under Armour and Adidas who are considered competition (Schlossberg, 2015). However, the company has many strengths such as a large ‘health conscious’ yet loyal following and financial strength, through their steady revenue growth (see appendix A). Their weaknesses include a lack of market share in emerging markets, and a perception of being a yoga based brand (Dalavagas, 2016).

Due to their large presence in many developed countries, it is our recommendation to expand to an emerging market such as India. One of their main company goals is to facilitate further growth and there is a massive opportunity to carry out this goal within this market.

A market size assessment is a valuable tool that can be used by any company looking to enter into a new market and evaluate whether it is a viable option. In terms of this particular case, Lululemon are analyzing an expansion plan into the Indian market. India is a large economy with a population of 1.3 billion, making it a popular choice for many different companies. They are also experiencing rapid growth with the GDP per capita steadily rising, allowing for a higher level of disposable income (Trading Economics, 2017).

In this particular market a chain ratio method could be the most helpful for the company to judge and analyze the physical market size so that the company can accurately view the size of the industry.

Chain Ratio Assessment:                                 India

Total Population                                        1.3 billion

Target Population (19-40 years)                        506 million (38.92% of total population)

Number of adults who exercise                         278 million (45% of target segment)

Note: Exercise refers to adults who participate in some type of low impact cardio, walking to work, exercise etc.

The market size assessment illustrates India as being a large market, ideal for penetration by Lululemon, therefore they may need to initially place a higher emphasis on their ‘lifestyle’ based range as the number of adults who exercise in India is initially lower than some of the European countries that the brand is operating within (Davies, 2015). However due to the global fitness trends, these statistics are predicted to be changing rapidly in the long term, based on global health trends (Davies, 2015). Due to this growth, this market remains a viable option for entry.

The rise of social media has fueled the convergence of trends and consumers around the globe. Therefore, due to this the market targeted by Lululemon will be the part of the global segment that has been created, of 19-40 year olds who are want to follow health trends and who have an income to support purchases from the brand.

Global Communication Strategy (chap 13 and 19)

  • How are we advertising (our strategy): Social media- Sponsorship from Bollywood stars?
  • the benefits associated with it (Bollywood stars- image)
  • and the relevant cost that should be taken into consideration (Chart, assumption with the cost, expected cost of saving by using the social media)

Global advertising and culture

  • Language barriers (and barriers to global internet marketing)
  • Technology barriers (e.g. technology infrastructure)
  • cultural values and religion

Advertising regulations

  • Foreign made ads
  • Content of advertising messages
  • Legal environment and government regulations
  • Global internet consumers

Choosing an advertising agency and other communication platforms

Global communication strategy

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