LULULEMON ATHLETICA
Lululemon Athletica: Corporate Background
Team A
By: Agnese Rozite, Ryan Parazine, & Joey Crisler
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Lululemon Athletica: Corporate Background
Lululemon Athletica is the brain-child of surfer/snowboarder turned businessman,
Chip Wilson. The first store opened in Vancouver British Columbia in November 2000.
The initial concept behind Lululemon was to provide the community with a “meeting
place” to discuss and learn about the benefits of yoga on the mind and body and sell yoga
clothing. The popularity of the yoga apparel was so great that the emphasis shifted from
training to training the employee. This shift has spurred the growth of Lululemon into a
worldwide supplier of yoga and running apparel, as well as fitness accessories
(“lululemon athletica: our company history”, 2013).
Since its inception, Lululemon has opened more than 150 stores worldwide and has
more than 2,900 employees. The company went public on July 27, 2007 with an initial
public offering of $25 per share. As of the close of business on January 24, 2013 the price
was $67.60. The company showed annual total revenue of $1,000,832,000 with a gross
profit of $569,270,000 for the period ending January 28, 2012. Lululemon’s total assets
for the same period were $527,090,000 (“Lululemon Athletica Inc. (LULU)”, 2012).
Like most large corporations, Lululemon Athletica has embraced social media. The
company’s Facebook page has over 780,000 likes and almost 400,000 followers on
Twitter. According to its Facebook page, the company’s mission is “Creating
components for people to live long, healthy and fun lives.” In addition to a corporate
Facebook page, each Lululemon store has its own Facebook page. This concept allows
the company to reach its customers or “fans” more efficiently and on a local level.
Although Lululemon has enjoyed continued success and growth it has come with
price. In January 2012, founder Chip Wilson resigned as Chief Innovation and Branding
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Officer after a run of negative publicity, including the murder of an employee by another
co-worker (O'Conner, 2012). According to analysts, the outlook for Lululemon in 2013 is
not as strong as previous years. The reason for the lower forecast is that the stock price is
too high (Maheshwari, 2013). As a side note, Lululemon does not pay dividends to its
shareholders.
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Mission Statement
A mission statement is a declaration of a company's core purpose, which explains
its reason for existence. It can be easily mixed up with the vision statement, but one must
keep in mind the biggest difference, which is that a mission statement is focused on ''who
we are now'', whereas a vision statement is ''who we want to be''. On Lululemon
Athletica's website there is no traditional mission statement, and it is clear that that they
are more focused on their vision and goals: ''Elevating the world from mediocrity to
greatness'' through the six core concepts: possibility, vision, balance, audacity, format,
and integrity. One may mistake their manifesto (Appendix A) for a mission statement,
although, it simply reflects the company's vision, and is just a list of thirty-one ideas and
life philosophies for healthy and positive living.
Interestingly, when the company was founded in 1998, it had a clear-cut mission
statement of “creating components for people to live longer, healthier and more fun
lives''. However, since then the company has evolved, and the closest thing to a mission
statement Lululemon has posted on their website is their quality stand, as it portrays some
of the eight elements of a mission statement discussed in class. Lululemon's quality stand
states: ''Quality is at the heart of everything we do, from the technical features we
(sometimes literally) weave into our products, to the people we work with and
relationships we build''. They have created a well-ordered table to further explain their
main focus of technical product, stores, people and community (Appendix B).
Analysis of 8 Elements of a Mission Statement:
Identifying the customer. Lululemon does an exceptional job at identifying its
customer base. In the quality stand they state, “We are all about yoga… We believe in
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building quality relationships with athletic leaders in our community. We also offer
complimentary in store yoga as a means of connecting with like-minded people.”
Therefore, Lululemon is clearly targeting athletes, but more specifically they are
targeting athletes interested in yoga.
Mention their Product. Lululemon also does a very good job at mentioning its
product. They state, “Our aim is to create athletic gear that’s perfectly suited for each
activity. We design the majority of our product line to withstand five years of intended
use and keeps its functional intent. When used for its proposed activity, it will guide you
in Downward Dog (a yoga position) today and still go with the flow five years from
now.” Lululemon distinctly describes its product as athletic gear that is durable and long
lasting.
Markets. Although Lululemon does mention its stores by saying, “Our stores and
Guest Education Centre are in constant communication with support channels and are the
eyes and ears of what's going on with our product,” they fail to mention where they
geographically compete. In hopes of clarifying this, they could say, “In hopes of getting
our product to as many people that partake in yoga as possible, most of our stores are
located in the United States. However, we also have numerous stores that are strategically
positioned in Canada.”
Technology. Lululemon briefly mentions technology by saying, “Quality is at the
heart of everything we do, from the technical features we (sometimes literally) weave
into our products, to the people we work with, and relationships we build.” Although they
do mention technology, they could develop a better statement by saying, “Here at
Lululemon, we desire to be the best. Therefore, we will advance with technology. We
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will always be looking for ways to improve our product and service by the advancement
of technology.”
Profitability and/or Growth. Lululemon fails to mention its profitability, but
they do mention their growth in regards to the expansion of factories over the past seven
years. If the company was to rewrite its mission statement it should add: ''We are working
towards a profitable growth rate through the store expansion plans in the global
marketplace, new efficient product lines and increase in stock.”
The Company's Philosophy (basic beliefs, values, priorities). Lululemon’s
philosophy is found between the lines on the quality stand page. A customer can get an
idea that the company values quality, long-term relationships, feedback, and in the end
the company is ''all about yoga''. To improve, Lululemon could add, “Our philosophy is comfortable clothing leads to greatness of body and mind.”
Public Image. On the quality stand's community section Lululemon emphasizes
its community concern by its belief in building quality relationships with athletic leaders
in the community, and by offering complimentary in-store yoga. The company also
mentions the reuse and recycling efforts of defective product materials.
Mention of Employees. The company acknowledges its employees (educators in
the stores), as well as the teams in the factories, and points out that they “want to work
with people who hold the same core values.” However, Lululemon could add a little more
to its employee section. For example, “We train our employees to the highest standard of
customer service because we believe in greatness in regards to everything we do.”
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References
(2012, Jan. 24 ). In Lululemon Athletica Inc. (LULU). Retrieved Jan. 24, 2012, from
http://finance.yahoo.com/q/is?s=LULU+Income+Statement&annual
(2013). In lululemon athletica: our company history. Retrieved Jan. 24, 2013, from
http://www.lululemon.com/about/history?mnid=ftr;company_history
Maheshwari, S. (2013, Jan. 14 ). In Lululemon Drops as Outlook Signals Possible
Slowdown. Retrieved Jan. 24, 2012, from http://www.bloomberg.com/news/201301-14/lululemon-drops-as-quarterly-outlook-trails-analysts-estimates.html
O'Conner, C. (2012, Jan. 9 ). In Billionaire Founder Chip Wilson Out At Yoga Giant
Lululemon. Retrieved Jan. 24, 2013, from
http://www.forbes.com/sites/clareoconnor/2012/01/09/billionaire-ceo-chip-wilsonout-at-yoga-giant-lululemon/
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Appendix A
Lululemon’s Manifesto
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Appendix B
Lululemon’s Quality Stand