About Lululemon

• Founder: Chip Wilson• First Store in 1998

(Vancouver, Canada)

• Recent Growth• Company Products

Growth Strategy

• Flagship Yoga Shoeline• ≈ 9.36% Proposed Market Share

SWOT Analysis of Lululemon

• Strengths– Brand Loyalty– High Quality Products

• Weaknesses– Small Niche Market– Primarily Focused on Women’s Apparel

• Opportunities– Expansion in Childrens’ and/or Men’s Apparel– Void of Footwear

• Threats– Competitors with High Market Share– Fashion Behavior Makes for Short Life Cycle in Products

Supply Chain

Raw Materials

Manufacturing Facility of Wenling

Woensi Shoes

Lululemon Warehouse

Ship to Store or Customer

Packaging Process

Shipping to Customer

Shipping to Store

Packaging Process

Decision Points

Tasks or Operations

Storage Areas or Queues

Flow of Materials/Products

Store »

Customer »

Supply Chain

• Outsourced to Wenling Woensi ShoesHong Kong, China

Marketing

• Target Market– Demographics• Professional Women • Ages 24-34• Disposable Income

– Psychographics• Established Career / Families

– Buying Behavior

Marketing

• Promotion– Social Media

• Increase Social Media Retention & Engagement

Pro Forma Sales

   

Footwear Revenue $9,097,745,009,00

Shoe Lines 584

Revenue per Shoe Line $15,578,330.49

Yoga Market 20%

Yoga Shoe Revenue $3,115,666.10

Lululemon’s Market Share 9.36%

Lululemon’s Shoeline Sales $291,626.35

Pro Forma SalesBase Case Year 1 Year 2

Sales $291,626.35 $349,951.62

Cost of Goods Sold $131,231.86 $157,478.23

Gross Profit $160,394.49 $192,473.39

Selling & Administrative Expenses $45,231.25 $54,277.50

Operating Income $115,163.24 $138,195.89

Pretax $86,833.09 $104,199.70

Taxes $25,702.59 $30,843.11

Net Income $61,130.49 $73,356.59

Conclusion

• Rejected the Growth Strategy– Competition is too strong–Market share can be taken over too

easily