Autumn Barnett
LTO Case Analysis #2

1) Describe Lululemon's organizational culture. What value does the culture add to the organization's performance?

Culture includes “observed behavioral regularities that occur when people interact, the norms that evolve in close working groups, the dominant values espoused by an organization, the philosophy that guides an organization’s policy toward employees and customers, the rules for getting along with other people in the organization, and the feeling or climate of a particular organization.” Founded in 1998, Lululemon is a specialty retailer of yoga inspired athletic apparel. By 2008, the publicly traded organization earned $350M in revenues, sold its product in over one hundred stores, and employed over three thousand employees. Lululemon’s mission “to create components for people to live longer, healthier, more fun lives,” core values of quality, product, integrity, balance, entrepreneurship, greatness, and fun, and manifesto are known to many within the organization and even more outside of the organization.

Lululemon’s mission and core values drive its culture and many of the decisions the company makes. In the research and development of its products, Lululemon employs local ambassadors (athletes and fitness professionals) to give feedback on the product, in the form of focus groups, as they truly understand and have the ability to impact the local community. These ambassadors, in many cases loyal consumers of Lululemon products, engage in word of mouth marketing, allowing Lululemon to capture local market share, especially in communities where sports retailers like Nike exist. In the development of the fabric for its apparel, Lululemon employs fabric mills, and leading chemists and scientists, resulting in a far superior and technologically engineered product. Lululemon’s sales associates, or