Our Lululemon SWOT analysis casts a light on the apparel brand's strengths, weaknesses, opportunities and threats, finding out what it's doing right and wrong.
If you are a fan of leggings then you surely have heard of Lululemon. They are very famous for the apparel they sell. The brand has managed to do really well for itself, so in the following Lululemon SWOT analysis, we are going to try and determine how that has been made possible.
The company is currently headquartered in Vancouver, Canada but was developed in Delaware, USA. So it has a mix of Canadian and American management. It began in 1998 but the first official Lululemon store came into existence in 2000. Chip Wilson was the founder. Ever since 2018, Calvin McDonald has been the CEO of the company.
Initially, they only sold yoga pants but now they have many products including tops, sweaters, undergarments, jackets, etc. Now they sell athletic wear, lifestyle apparel, accessories, and personal care products as well. The key locations they are known to operate in include North America, Asia, Europe, and Oceania.
As of 2020, Lululemon has a total of 491 stores all around the world and they are also selling their products online. The brand also has an interesting story on why the name is so strange. Wilson stated that Japanese people pronounced the brand name in a funny way because they have difficulty pronouncing their “L’s” so that’s why the name has so many of them. He found it funny.
Although the brand is not that old compared to some of its competitors, it still has managed to become quite relevant in this era. In the upcoming SWOT analysis, we will try and analyze each of the four factors in detail to see how the company is affected. Make sure you don't miss our PESTLE analysis of Lululemon.
In any SWOT template, you come across, you will always have to deal with the recurring four factors which are strengths, weaknesses, opportunities, and threats. Before we actually dive into the details, let’s talk about this in more detail.
See, the first two factors i.e. the strengths and weaknesses are called internal factors. We call them so because whatever entity is being analyzed under the SWOT, which in this case is a company, this entity can control these factors.
On the other hand, opportunities and threats are called external factors because these factors are not under any influence of said entity and in fact occur very unprecedented most of the time. They can be adapted to but they cannot be controlled. We will try and explain this better using an example.
If Lululemon has amazing quality products to offer, this is a strength and hence an internal factor that will be taken into consideration in the SWOT framework because it is due to the company’s dedication and hard work that such good quality is produced.
If on the other hand, Lululemon has some intense competition in the market, this is a threat because the company cannot simply get rid of competitors in a snap. They have to adapt to this threat to be better off. So this is a good example of how threats are external factors.
Now that we have our facts clear, let’s see how we can apply the SWOT to Lululemon.
Lululemon Strengths
These are the factors that essentially set a brand apart from its competitors. Having a good number of strengths will allow a company to sustain against the pressures of weaknesses and threats even. Here are the biggest strengths this company has.
Raw Material
If you think about it, having an apparel business is not a big enough deal on its own because all sorts and categories of clothes are available everywhere in the market. What can set a clothing brand apart from competitors is its raw material which would determine the quality.
They have trademarked a fabric which they introduced by the name of Luon in 2015. Luon has more nylon microfiber compared to the industry average in similar clothes. They also have other fabrics and materials as well to make their products unique.
Product Line
The company does offer a very extensive product line as we have discussed briefly in the introduction. This acts as a big strength for them because they can cater to a wide variety of customers as they offer so many different things.
Marketing
Lululemon has a very strong presence on social media platforms. Their marketing efforts have always been very good for the prosperity of the brand name. They have 3.8 million followers on their Instagram!
This cult-like following was made possible through their consistency in digital marketing. Their Instagram features content both from the people who wear Lululemon and from the company itself; this mix of professional and candid content has been able to resonate with the audience more.
They have cool promotional activities all the time such as the “sweat collective” which allows fitness instructors to enjoy a 25% discount on all of their purchases.
Example:
- In 2024, effective use of social media influencers and community-driven marketing strategies aligned well with Chinese consumer preferences. Lululemon’s 45% growth in China, as opposed to only 2% in the US, underscores its successful market penetration and consumer acceptance.
R&D
This brand is very serious about investing in a good R&D department which is why they have created the amazing “white space” which is essentially their research space utilized for constant innovations and developments. This has made it possible for Lululemon to be on top of its game in the apparel industry.
International Reach
Although the company is not present in every region of the world, it still has many outlets in many different countries and continents which give it international status. Having such an elaborate network of Lululemon outlets has only helped the brand in becoming a much more sustained player in the market.
Lululemon Weaknesses
Unfortunately, this brand also has some weaknesses that should be eliminated as soon as possible. These weaknesses can either be mitigated by making use of the various opportunities the company might explore (discussed ahead) or they can be diminished by acquiring more strengths. Here are some of the biggest weaknesses Lululemon has.
Brand Recall
Despite Lululemon having a great following online and the company selling the products in so many countries in the world, the brand recall for Lululemon is significantly low compared to the competitors. How many times have you as a customer of sportswear thought of Lululemon as the first option to try out instead of Nike or Adidas or even Puma?
Expensive
The products sold by the company are more expensive as compared to some of their best competitors. Granted the raw material they use and the quality they offer is amazing, but when a customer has the option to switch to a less costly alternative they will, especially when the alternatives offer amazing benefits as well.
Gaps in the Network
Although the company is already international, there still are many places where it doesn’t exist. Lululemon should be looking at global expansion to be able to compete well in this highly competitive industry. There are so many regions in the world where people don’t even know of this brand. they should be cautious of this fact.
Political Incorrectness
Brands as big as Lululemon have a social obligation to be politically just and correct. In the era of the internet, no controversy is forgotten.
The owner of the brand has made weird comments such as the one discussed in the intro about the Japanese not being able to pronounce the name correctly. He also said that the brand doesn’t make clothes for plus-size women because it is “wasteful”.
Someone inside the company was willing to even initiate a campaign titled “all lives matter” when George Floyd got murdered and the BLM movement was at its peak. That never happened but it is a cause of concern to have such people working in the company.
Lululemon Opportunities
As long as an industry has opportunities for competitors to take advantage of, there is always hope. Here are some of the hottest opportunities Lululemon can and should take.
Network Expansion
As mentioned in one of the weaknesses in the section above, Lululemon is not a global company. Acquiring a global status takes a lot of resources and effort however it can be started.
Lululemon should work on getting into newer markets and regions so that they can grow their customer pool as well as their brand presence. India and China are amazing countries to be considered for a serious expansion effort.
Product Lines
Yes, in terms of variety they have amazing products but in terms of price, they don’t have many options other than very expensive items. They can cater to more target segments if they introduce lines that are more affordable. This won’t disturb their premium range; the other segment options will only help in increasing the brand’s presence and sales.
E-Commerce
This is the era of the internet and everything online. Lululemon can in fact develop a very big competitive advantage for themselves if they utilize the digital retail space effectively. They can compete very strongly with their bigger competitors if they have an upper hand in online sales which have already gained even more popularity ever since the global pandemic has hit the world.
Lululemon Threats
A brand, as successful as Lululemon, is also prone to threats, unfortunately. This is why in any SWOT example, it is so important to categorize threats accurately so they can be eliminated. Here are some of the most relevant threats.
Competition
Every brand on earth faces a certain degree of competition in the market but when your competitors are as big as Nike, Amazon, Puma, Gap, and Under Armour, things can get very tough very fast.
All of these giants are in the same industry making sportswear and other accessories at a much larger scale compared to Lululemon. Lululemon has to work very hard to keep up with such huge competitors especially when they are operating on a global scale.
Global Expansion Needs Many Resources
It is very difficult to simply get up and decide to be a globally operated company. It takes a lot of resources to make it possible. The company will have a very tough road ahead with many challenges.
Final Thoughts on Lululemon SWOT Analysis
After completing this analysis, here is a collection of what we feel Lululemon is currently doing right and wrong.
They have good strengths. The company does know how to keep afloat in an industry that is saturated. The weaknesses though cannot be ignored. Especially the comments made by their owner every now and then are too problematic to ignore.
They can never amount to the same level of success as their competitors if they don’t accommodate all races, minorities, and ethnicities no matter how amazing they are otherwise.
Other than that, they do have good opportunities at the moment to grow. The threats are significant especially when the competition is miles ahead of them in the game. Overall, it is a fact that Lululemon is a well-established brand and they do have an amazing successful journey. However, we simply cannot ignore the brand being associated with problematic people in this day and age. Surely we have much more to see from the brand in the future, let’s hope it's all good things and not the bad ones.
