Lululemon Athletica

Lululemon Athletica

Introduction

            Companies and organizations require certain resources and capabilities to ensure their continued survival in the market. The resources and capabilities may be distinct or similar among companies. Lululemon enjoys a number of resources and capabilities that have enabled it to compete effectively in the market. This paper intends to examine the company’s resources and dynamic capabilities. Various variables will be analyzed when analyzing the resource based view at Lululemon. This includes relevance, durability, bargaining power, and imitability. The paper will also seek to examine the competitive edge achieved by the company as a result of its resources as well as its capabilities. Relevance relates the importance of organizational resources and capabilities.  Essentially, a company’s relevance can either be relevant or irrelevant. For instance, relevant resources and capabilities improve a company’s competitiveness in the market. Durability relates the ability of a resource to enable a company to achieve an edge in the long-run. Some resources give a company bargaining power over, for example, its suppliers and customers while others have no effect. Inimitability relates to the uniqueness of the resources in question. Some capabilities are unique in nature. There are others that can easily be imitated by competitors. Unique resources and capabilities give a company more edge. Generally, resources and capabilities are integral to a company’s success. The main objective of this paper is to analyze Lululemon’s resources and capabilities.

H1: A company’s resources and capabilities are integral to its success.

The Resource Base View at Lululemon

            Lululemon enjoys a number of resources that have enabled it to achieve great success in the market. It major resources include financial resources, human resources, physical resources, and intangible resources.

Financial Resources

It is evident that the company enjoys high profitability even when most of its competitors are struggling. This is one of the main reasons to why it has been able to finance its strategies with ease. Basically, there is no way a business can be able to compete effectively in the market without financial resources. A company requires financial resources to deal with its expenses. Lululemon incurs many expenses when dealing with its business activities. Ability to access revenue ensures a smooth running (Trenberth & Hassan, 2013).

Lululemon not only enjoys strong financial performances but also ability to raise new funds from external sources. The fact that it is a publicly trading company means that it can sell its stock to raise funds. Equally, its profitability and reputation has resulted in an increase in its stock prices. As such, it is able to raise more funds from the sale of its stock as compared to most of its competitors. Easy access to funds has enabled the company to expand on the market with ease. The company has not only expanded on the local market but also on a global scale. Easy expansion in the market has also increased its profitability considering the fact that it is able to access more customers, hence increased profitability. As a result, this also increases the funds available to it (Lavrence & Lozanski, 2014).

Human Resources

Human resource is also among the resources enjoyed by the company. The company has a strong workforce that is ever committed to its success. Employees at Lululemon as recruited and selected on merit.  This implies that no one is favored during the recruitment process. The management at Lululemon understands the fact that its success is largely dependent on its ability to access the best talent. With this being the case, it only selects the best among the best. Lululemon is ever committed to ensuring high levels of motivation among its employees. Its management has come up with strong strategies aimed at motivating employees to execute their roles and duties in the desired manner (Trenberth & Hassan, 2013).

Employees at Lululemon are also trained from time to time to ensure they have the necessary skills and knowledge imperative for them to deal with their roles. The world of business keeps on changing. It is essential for employees to adapt to the changes. However, there are times when poor skills and knowledge creates a barrier to their adaptation to change. Training programs are aimed at eliminating such weaknesses. Improving employee competency is also one way of motivating them. Lack of skills and knowledge can be very frustrating to employees leading to low levels of motivation (Trenberth & Hassan, 2013).

It is through having committed employees who are highly motivated to deal with their roles that the company is able provide the best products and services to customers. Basically, employees at Lululemon are aware of what it expected of them at all times and how to ensure the same. As such, they never compromise on the quality of the products offered by the company. There are also more than willing to come up with innovative ideas on how to improve the performance of their company Lululemon’s employees have also enabled it to achieve a good reputation in terms of customer service. Essentially, they always treat the company’s customers as kings leading to high levels of customer loyalty (Trenberth & Hassan, 2013).

Physical Resources

            Lululemon also enjoys a number of physical resources that have contributed a lot to its continued success in the market. For one, the company has advanced production facilities. The company has ensured that its production facilities are well maintained to enhance their productivity. It has also ensured that the facilities have the capacity to meet the demands of the consumers. Equally, the company has also many distribution channels across the country as well as on a global scale. It has established stores in different locations to ensure its target consumers are able to access its products with ease. Nowadays, consumers have the desire to shop at their convenience. As such, it is essential for businesses to bring products nearer them. This explains the reasons to why Lululemon has many stores in the country (Lamb, 2012).

The company also enjoys technological might. It has invested a lot in research and development to access the best technologies in the industry. Technology has become imperative to the success of any company. Lululemon relies on different types of technologies to produce its products. As such, the use of poor technologies can lead to a company failing to produce quality products. The recent years have experienced technological advancements. Lululemon ensures it adapt to the changes by acquiring new technologies. This has not only enabled it to produce high quality products but also improve its efficiency. In the same regard, the company also enjoys great information technology systems. This is a resource that has enabled it to integrate with its suppliers as well as customers. Its information systems have also facilitated internal communication, for example, between managers and employees. Effective internal communication has also gone a long way in improving employee performances (Lamb, 2012).

Intangible Resources

            There are also intangible resources that are enjoyed by Lululemon. The company enjoys goodwill, reputation, brands, and intellectual property. Goodwill has contributed a lot to the company’s success. For instance, this is a resource that has enabled the company to improve its bargaining power over its suppliers. Correspondingly, Lululemon enjoys a good reputation in the industry. This has enabled it to attract many customers with ease as compared to some of its competitors. However, it is imperative for the company to ensure good performances in terms of product quality. Failure to ensure the same can lead to it losing earning a bad reputation which can equally affect its competitive edge (Trenberth & Hassan, 2013).

Lululemon has also ensured strong branding. Its brands are well known to its target consumers. Poor branding is one of the main reasons to why many companies have failed to achieve their success in the market. This is because consumers perceive them in a negative manner. As a result, they are normally unwilling to consume them. Last but not least, the company also enjoys intellectual property. For example, the company has a trademark that cannot be imitated by its competitors without its prior consent. The trademark can only be used by Lululemon. Its competitors cannot also trade using its name. Essentially, commercial rights have enabled the company to differentiate itself from its competitors (Holton, 2014).

Dynamic Capabilities at Lululemon

            The resources at Lululemon have been used to ensure its continued survival in the market. The company has been using its resources to develop various capabilities.

One capability enjoyed by the company is a great understanding of its customer needs and wants. The company works closely with is customers to ascertain their distinct needs and preferences. It uses the information gathered from them to develop products that are competitive in the industry. This is also one of the main reasons to why it has achieved high levels of customer loyalty as its products serve customers in the desired manner leading to high levels customer satisfaction. Its competitors have the ability to copy its customer service strategies. However, there are various aspects of its services that are distinct to it (Lane, 2013). Lululemon is also in a position to maintain great customer service. It only needs to maintain a close touch its customers to ascertain their ever changing needs and preferences. Lululemon also provides after sales services. This is aimed at ascertaining on whether or not the products served to customer have met their needs. Some of its competitors do not offer such services, hence may not be able to learn if a customer was satisfied or dissatisfied with its products or services. As such, they work under the assumption that everything is okay when in real sense customers may not be willing to consume their products in the future (Plunkett, Balan, & Brison, 2009).

Correspondingly, the company also has the ability to ensure continuous improvement on its products and services. This is evident considering the fact that the quality of its products keeps on improving as years goes by. The company has capitalized on its advanced technologies to improve on the quality of its commodities. Similarly, it has also been able to master this capability through continuous investment in research and development. This gives it an opportunity to learn new ways to improve its products. It employees also act a major source of ideas on how to improve its products. As mentioned above, the company works closely with its customers. Interacting with customers has also enabled it to improve on its products considering the fact that it understands exactly what they need (Lane, 2013).

Lululemon also enjoys great performances in relation to competition. The company has a great understanding of its business environment. It also understands the strategies employed by its competitors to survive in the market. As a result, it has been able to develop strong strategies to counter them, hence its ability to compete in an effective manner. There are times when most of its competitors are struggling in the market. On the contrary, Lululemon has proved to be successful even during hard times. The company is able to capitalize on its distinct resources to compete in the market. For example, it is able to use its high skilled and knowledgeable employees to survive the industry (Trenberth & Hassan, 2013).

Effective communication is also a capability enjoyed by Lululemon, specifically, internal communication. The company has developed a culture where employees communicate freely with managers. It has also developed information systems that facilitate the communication process. Many organizations fail as a result of poor communication. This affects internal processes, for example, coordination of tasks. It also leads to poor performances among employees as they may not understand what is expected of them at a particular time. Lululemon has mitigated this risk through the development of good communication culture as well as the implementation of effective information technology system (Lane, 2013).

The company has also shown great capability in terms of sensing opportunities in it business environment and pursuing them. It is evident that the company has expanded in many areas in its home country market. The management at Lululemon is always looking for expansion opportunities. It does not hesitate to pursue an opportunity the moment it realizes it is viable. In the same regard, the company has also expanded to the global market, for example, the United States. This implies that the company saw an opportunity in introducing its products overseas. There are companies that have failed to ensure the same as a result of having a low risk appetite (Longenecker, 2011).

It is common knowledge that Lululemon as a company is exposed to different threats in the industry. Failure to address the threats can create a barrier to its achieving its goals and objectives. The management has shown great ability to deal with the threats with ease. This has enabled it to continue surviving the market even when most of its competitors are struggling. The company is also able to turn some of the threats into opportunities. For instance, the company uses increasing competition as a wakeup call to improve its products and services. Equally, it uses this as an opportunity to expand more with an aim of enhancing its market share (Longenecker, 2011).

Conclusion

            Lululemon has achieved great success in the industry. The success of the company can be attributed to its resources and dynamic capabilities. Lululemon enjoys a number of resources. The company has a strong workforce which is ever committed to its continued survival in the market. Its human resources have also enabled it provide high quality products. The company also enjoys strong financial performances. This has enabled it to fund it business activities with ease. Lululemon is also able to raise funds from the public through the sale of its stock or shares. It also has a number of physical resources and intangible resources. Physical resources include its production facilities, technology, and distribution channels. On the other hand, intangible resources include goodwill, reputation, and intellectual property.

Lululemon also has a number of capabilities that have enabled to survive the industry even when its competitors are struggling. For one, it has a great understanding of its customer needs and wants. It works closely with them to learn their distinct needs to produce products that reflect on the same. Likewise, the company has shown ability to compete effectively. This can be attributed to its ability to scan its business environment before coming up with strong competitive strategies. Effective communication is also a capability enjoyed by the company. The management at Lululemon also has also demonstrated ability to realize opportunities and pursue them. It is also able to turn some of the threats it is facing in the market into opportunities. Generally, the paper has proved that indeed company resources and capabilities are integral to its success.

References

Holton, P. (2014). Intellectual Property Laws for Fashion Designers Need No Embellishments: They Are Already in Style. Journal of Corporation Law, 39(2), 192-235.

Lamb, C. W. (2012). Marketing. Toronto: Nelson Education.

Lane, F. (2013). Killer brands : create and market a brand that will annihilate the competition. Avon: Adams Media.

Lavrence, C., & Lozanski, K. (2014). “This Is Not Your Practice Life”: Lululemon and the Neoliberal Governance of Self. Canadian Review of Sociology, 51(1), 720-746.

Longenecker, J. G. (2011). Small business management : launching and growing new ventures. Toronto : Nelson Education.

Plunkett, J. W., Balan, A., & Brison, B. (2009). Plunkett’s Sports Industry Almanac 2009. Plunkett Research Ltd .

Trenberth, L., & Hassan, D. (2013). Managing Sport Business: An Introduction. New York, NY: Routledge.