Leadership, Culture and Transaction at Lululemon

Read Summary
Summary

Lululemon is a yoga wear company that offers high quality products with customized designs and long-lasting fabric at premium prices. The company has differentiated itself by providing excellent customer service and educating guests instead of just selling products. Lululemon is highly integrated with communities and relies mainly on customer feedback for their marketing research. The company’s unique organization structure is employee-oriented and encourages intrapreneurship. Lululemon’s goal is to expand and increase sales to $1 billion, but the company has faced challenges due to inappropriate management decisions, misguided real estate strategy, and slow development of infrastructure and operational systems. When new CEO, Day, took over, she needed to bring back the company culture and empower the leadership team in the decision-making process. Day also aimed to rearrange store locations, improve infrastructure and operational systems, and lead the company following a sustainable strategy that fits into their culture to ultimately reach their goal.

Table of Content

1. Lululecom has differentiated their products by offering high quality signature fabric yoga wears with premium prices. Their products have long last time and customized design. Lululemon’s costumer service is compatible to the products they delivered to the customers. In the store, Lululemon educates their guests instead of selling, which allows attention to details to each garment. In addition, Lululemon is highly integrated with communities. Their marketing research is mainly rely on the directly feedback from customers. They use brand ambassadors and word of month as main marketing channel.

Lululemon’s strategy determines its unique organization structure, which is employee-oriented. The decision making process is decentralized. The store managers are empowered to make the marketing decision for their local stores, and have accountability and responsibility for the selling performance evaluated by their performance-linked salaries. This structure encourages the intrapreneurship and allows the employees engage and communicate with the organization. Focused self-development programs create strong-shared value within the company.

This essay could be plagiarized. Get your custom essay
“Dirty Pretty Things” Acts of Desperation: The State of Being Desperate
128 writers

ready to help you now

Get original paper

Without paying upfront

Lululemon’s unique value proposition enables the company to compete with their two levels of competitors i. e. traditional sport product companies with whole sales strategy and brands’ soft sideline of yoga wear towards their fashion lines. The goal of Lululemon is to grow the company by open more stores and ultimately increasing sales to $1 billion. However, the performance of the company was impacted greatly by the inappropriate management decisions, which caused by incompatibleness between new coming in managers and the culture of the company.

It resulted mismanagement of the real estate strategy, and struggling to implement new inventory systems to keep pace with the demands in market place. Consequently, the stores were under performance and the whole organization had slowed down. The increase in company store sales dropped from 24% to 3%. 2. Since the mandate of Lululemon from the board was to grow and expand by open more stores, and ultimately increasing sales to $1 billion, Bob Meers came in with his extensive experience and big company background. He drove Lululemon’s expansion to US market.

During the expansion, Bob brought the company’s recognition in supply chain, and pushed up the stock price. However, Bob’s strategy significantly shifted the company’s culture. He brought in many outsiders from his upper management team who did not share the value that Lululemon’s people shared, which resulted failures in culture integration between internally developed people and outside came in people. In addition, as Lululemon scaled up, the development of infrastructure and operational systems were under paced the company’s growth.

Misguided real estate decision continuous to drain the resources. The big change in business model was not compatible with Lululemon’s culture and value. As Day said: ‘the company was on shaky ground. ’ 3. When Day came in, she needs to react fast and bring back the culture of Lululemon. In order to solve the problem of the management team, she needs to bring in new people. As part of company culture, the leadership team needs to be empowered, in controlled and contributed to the decision making process.

Moreover, the misguided store location needs to be rearranged following their brand strategy, which expends according to the geographic and demographic market segmentation. In addition, the infrastructure and operational system need to be improved in order to cope with the expansion speed. It is expected that, as a role model, Day would lead Lululemon to grow following a sustainable strategy, which fit into their culture, and ultimately reach their company goal.

Cite this page

Leadership, Culture and Transaction at Lululemon. (2016, Nov 24). Retrieved from

https://graduateway.com/leadership-culture-and-transaction-at-lululemon/

Remember! This essay was written by a student

You can get a custom paper by one of our expert writers

Order custom paper Without paying upfront