Summary of Article, “Lululemon rides out recession in quality fashion” Many clothing firms cut price to allure customers in the recession. However, Christine Day, the vice president of Lululemon adopted a contrary approach, now lululemon is profitable. The success of lululemon in the recession attributed to the innovative strategies. First of all, Christine Day did not lower price, but devote into improving quality of clothes. Besides, she attracted customers by offering new products such as running outfits, jackets and accessories and building an e-commerce site. With these successful reforms, lululemon did not only pay off, but also increase the sales demand. Due to insufficient inventory, lululemon has to invest more money into supply chain to meet customer demand. In a short, lululemon is doing its business in an optimistic outlook.
PEST Analysis (See Appendix A)
Political
Department of Finance Canada (2009) reported Canada introduced Economic Action Plan in January 2009. One major part of this plan is reducing tax permanently. Personal income tax falls over $1 billion for the 2009 taxation year, corporate income tax revenues fell $11.2 billion and Goods and Services Tax (GST) revenues declined $4.2 billion.
Canada is one member of North American Free Trade Agreement (NAFTA), other members in NAFTA are America and Mexico. Though Canada trade with a lot of countries around the world, the major trading partner of Canada is the U.S., accounting for 77.7 percent of exports in 2008 (Ontario Canada, 2009).
Economic
Department of Finance Canada (2009) states Canada has been significantly affected by the global recession and Canadian economy growth began to slow in the fourth quarter of 2008. Real GDP declined by 3.7 percent in the fourth quarter of 2008.
Although Canadian economy is being affected by the global recession, the Canadian economy is still better than other industrialized countries. The Canadian labor market has fared much better than the U.S. labor market, Canada has less job losses and the unemployment rate now one full percentage point lower than in the U.S.
Social
North American Studio Alliance NAMASTA (2005) claims that5.5 percent of Canadian adults or 1.4 million people now practice yoga; 72.3 percent of yoga practitioners are female and 27.7 percent of yoga practitioners are male. 44.7 percent of Canada yoga practitioners are 18 - 34 years old and 41.0 percent of Canada yoga practitioners are 35 - 54 years old.
According to statistic Canada (2009), “Over 40% of Canadians aged 20 to 79 have an unhealthy level of total cholesterol and about 25% have an unhealthy level of triglycerides.” High total cholesterol and triglycerides levels increase with age, thus more and more people will pay attention to health and desire to build a healthy lifestyle.
Technological
The technology of internet has special effects on selling products such as e-commerce. The broadband is an enabler of online buying. Internet World Stats confirms (2007), 81% of online households have a broadband connection.
Advertising through media such as face book and twitter helps to increasing public awareness and attracting more customers. There are 250 million people are using Face book (Zuckerberg, 2009), and 26 Million Users are using twitter (Wolfe, 2010) to stay updated on what's happening around them and share with the people in their lives
Key success factors
The grass-root marketing strategies make contribution to Lululemon’s success. First, Lululemon forms partnership with local ambassadors who represent health lifestyle. Then Lululemon invites local community members to give feedback on design and to test new product. As a result, Lululemon creates a local brand and a word of mouth marketing strategy to help recommending its products around community. Customers buy Lululemon’s product based on others’ recommendation.
Featured product with high-quality, modest design and attractive style is another important factor to Lululemon’s success. Lululemon’s clothing line has expanded into the organic and sustainable cotton. Moreover, though Lululemon’s clothing is designed for function and athletes, its clothing has attractive style. Its clothing can not only be worn in the gym, but also can be worn in the street and that is why a lot of people love its clothing.
SWOT Analysis (See Appendix B)
Strengths
Lululemon has built a staunch relationship with its employees by the following two strategies. First, Lululemon offers benefits to employees. As potter (2004) states Lululemon offers employee free yoga classes, health benefits and generous growth opportunities. Moreover, Lululemon spends a lot of time on training employees or “educator”. Employee are called educator, since the company want them to educate customer on benefits of yoga. By offering benefits and training program, Lululemon enhances employee’s motivation effectively which in turn increase customer satisfaction.
Lululemon provides customer high-quality athletic wear. First, the design of its athletic wear is complete credible, since Lululemon invites local athletes to discuss on the design and provide feedback (Lazarus, 2008). Thus the performance of the athletic wear is guaranteed. Besides, Lululemon chooses “anti-microbial wicking fabrics with flat seams to ensuring it is non-abrasive to the wearer” (Vinakmens, 2003). Lululemon cares customers’ feelings and needs, so Lululemon are not only offering high-end clothing, but also offering high quality of life.
The innovative strategies give Lululemon a special advantage over its competitors. Lululemon’s grass-root marketing strategies includes social media and working with ambassadors. Its social media consists of Face book, blogging and Twitter, and its ambassadors consist of spin instructor, yoga instructor and pilates instructor. The ambassadors can put billboard in their local Lululemon, which can help them expand clientele. Then they bring clients back to the retailer for exchange (Sacks, 2009). Therefore, Lululemon has positive mutual beneficial relationship with ambassadors.
Weaknesses
One thing Lululemon has lacked is consistency. The inconsistency is the result of individualization of stores. The individualization of stores means that the staff in each store has freedom to design their own individual store with their personalities and feelings, thus each individual store has its own features and styles, which could be a good thing, but also this characteristic could lead to inconsistency in the view of customers.
Another weakness of Lululemon is insufficient inventory. Lululemon’s products are very popular and the customer demand is continually increasing, therefore, insufficient inventory may lead to disappointment of customers and extra investment on supply chain or other expense. According to Strauss (2010), “Lululemon has had to invest extra money into air-shipping products from overseas to try to meet demand.” So lack of inventory could result in a loss.
Opportunities
The Olympics is always an opportunity of Lululemon. As illustrated by Sturgeon (2010), “The quarter also included the Olympics, which the retailer did not sponsor officially, but it drew a lot of attention for launching a line of cheeky, patriotic "cheer gear" in the lead-up to the 2010 Vancouver Games, such as a red-and-white shirt emblazoned with the caption, "eh!"”. Therefore, Olympic is a stable opportunity for Lululemon to increase its public awareness.
New locations are one of the most important opportunities of Lululemon. As Lazarus (2008) states that Lululemon plans to have more than 250 stores worldwide by 2012. This action will help Lululemon entering new markets, enhance Lululemon’s public awareness and appeal more customers.
In addition, the popular health consciousness creates the best opportunity for Lululemon. Now, the health is the most hot-topic around the world, a lot of people start to care their health, especially people who is under high pressure due to busy work and people who have diabetes. For this reason, Lululemon could attract more customers, since Lululemon is a company loves to bring health lifestyle to customers.
Threats
Fashion element constitutes a threat to Lululemon, because fashion element is not stable. Now Lululemon may be very popular, once people favor of other fashion element, Lululemon will suffer heavy loss. According to Lazarus (2008), “the retailer’s fashion ‘fad’ element is one of the largest risks to the company”. Therefore, Lululemon needs to pay more efforts to prevent from fashion fad.
Lululemon is perceived as authentic yoga brand, but there are many sports companies are branching into yoga wear such as Aritzia. These companies could be strong competitors of Lululemon in the future. Moreover, Lululemon has already had a lot of strong competitors in the nowadays market such as Nike yoga, Athleta and Adidas, etc. These competitors constitute serious threat to Lululemon.
The global recession has had hard hit on almost every industry. Though Lululemon survived from economic recession and it gets pay off, the economic uncertainty still could contribute to loss to Lululemon. People tend to save more and spend less during economic downturns, which in turn lowers the purchasing power, thus Lululemon still could suffer loss more or less. Conclusions
Even with the challenging economy, Lululemon still get grow revenue. The reason is Lululemon has sound financial base, excellent management, high-quality products and a committed workforce. Hence, Lululemon will be growing in a healthy rate.
Fashion element is highly volatile, in order to prevent from fashion fad, Lululemon could put more efforts on design, bring updated fashion element into their product. Or Lululemon could hire some fashion designer to attend in their designing process, thus Lululemon do not have to chase with fashion, instead it can lead fashion into the world.
In order to stay competitive in the market, Lululemon could build long run profitable relationship with customers such as introduce a discount card or saving reward card. Besides, Lululemon could lower operating cost to lower price as consumers are price sensitive.

Reference
Department of Finance Canada. (2009). Annual Financial Report of the Government of Canada Fiscal Year 2008–2009. Retrieved from http://www.fin.gc.ca/afr-rfa/2009/afr-rfa09-eng.pdf
Ontario Canada. (2009). Canada's Major Trading Partners – 2008. Retrieved from http://www.investinontario.com/siteselector/coca_401.asp
North American Studio Alliance. (2005). Canadian Yoga Statistics. Retrieved from http://www.namasta.com/pressresources.php#3
Statistics Canada. (2009). Heart health and cholesterol levels of Canadians, 2007 to 2009. Retrieved from http://www.statcan.gc.ca/pub/82-625-x/2010001/article/11136-eng.htm
Internet World Stats. (2007). Broadband and Consumer E-Commerce in Canada April 2007 Review. Retrieved from http://www.internetworldstats.com/am/ca.htm
Zuckerberg. M. (2009). Now Connecting 250 Million People. Retrieved from http://blog.facebook.com/blog.php?post=106860717130
Wolfe. L. (2010). Twitter Statistics: How Many People Use Twitter?. Retrieved from http://womeninbusiness.about.com/od/twittertips/a/twitter-statistics.htm
Lazarus, E.. (2008, April). THE TAO OF Lululemon. Marketing, 113(6), 23-24,26-27. Retrieved May 22, 2010, from ABI/INFORM Global. (Document ID: 1473328621).
Vinakmens. K. (2003). Lululemon: Building the brand from the ground - yoga mat – up. Retrieved from http://www.strategyonline.ca/articles/magazine/20030113/lululemon.html?page=2
Sacks, D., & Berlin, K.. (2009, April). Om My! Fast Company,(134), 92-95. Retrieved May 22, 2010, from ABI/INFORM Global. (Document ID: 1681819901).
Marina Strauss. (2010, March 26). Lululemon rides out recession in quality fashion. The Globe and Mail,p. B.11. Retrieved May 26, 2010, from Canadian Newsstand Major Dailies. (Document ID: 1993754941). PEST Analysis | Political | Economy | -tax reduction - favored trading partner | - economy growth - unemployment rate | Social | Technologies | - demographics - health | - e-commerce- internet media (face book $twitter) |
Appendix A

Appendix B SWOT Analysis | Strengths | weakness | - employee motivation- high quality- grass-root marketing strategies | - inconsistency- inventory | Opportunities | Threats | - Olympic- product diversification- popular health idea | - Fashion element- strong competitors- global recession |