Step 4: Evaluate Lululemon’s Competitive Advantage and Financial Future

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As the final step of How to Get Hired as an MBA Intern at Lululemon, I have conducted a financial valuation of Lululemon from the perspective of an investment analyst. The attached sell side analyst report was created in collaboration with my team in an introductory class- Principles of Finance. Below is a snippet of our final report. The full report can be viewed using the link below.

Despite recent controversies and an uncertain future, as Lululemon continues the search for a successor to Christine Day, new expansion initiatives and powerful grass roots marketing paves the way for Lulu’s growth in uncharted territories. Fierce competition is not far behind and Lulu will need to act quickly to bounced back and maintain its leading position in a niche, premium priced market. As a Sauder success story, Lululemon makes the its way into every class, from accounting to economics to operations. It’s hard not to be intrigued and inspired by this local powerhouse. As the internship season begins, I hope that my research, preparation, and personal reflections give me a step up in the application process.

Lululemon Sell Side Analyst Report

Lululemon Analyst Report

 

Step 3: Showcase My Empirical Research and Analytical Skills

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My personal interests in health and fitness combined with my academic studies in Mass Communications prompted me to investigate the intersection of the two subjects. The below Introduction was extracted from my Honours Thesis (Communications Studies Department) written in 2010 at UCLA. To view the complete thesis, please use link below.

What do Women Eat? A Comparative Content Analysis of Food Groups and Advertising Claims Appearing in Food Advertisements found in Popular Magazines for Women

Food is one of the essential sources required to sustain life. Food nourishes bodies and provides humans with energy that enables movement and other bodily functions. Since the industrial revolution, technological advances have allowed for increased availability of food. Over the years, modern science has discovered various techniques to preserve food, produce packaged processed food, and improve flavors of food. However, in addition to the increased convenience and abundance of large varieties of foods, long term consequences of overindulgence and its associated negative health impacts have become progressively more prevalent in today’s society.

As consumers face endless decisions in their everyday lives, they are influenced by many external sources. Not only do friends, family, and the environment affect people’s choices of food, activities, and behaviors, the mass media also plays a dominant role in consumers’ decision making process. The mass media bombards consumers with endless messages about what is good, what is bad, what is healthy, what is not, and inevitably affects consumers’ decision about what to consume. As the incidence of diet-related health problems continue to rise, nutrition labeling and health claims contribute greatly to consumer’s purchasing decisions (Drichoutis, Lazaridia, & Nayga, 2006). A review of existing research on consumers’ use of nutritional labeling, revealed that nutritional labels on food products influence purchasing decisions because consumers want to avoid harmful nutrients, and thus use labels to make judgments and form perceptions about various products (Drichoutis et al., 2006). While some studies have shown that use of nutritional labels affect dietary patterns, leading to healthier food choices and reduced intake of unhealthy products (Drichoutis et al., 2006), recent studies have also indicated consumers’ misuse of nutritional labels and advertised health claims (Wansink & Chandon, 2007). Consumers experience informational overload as a result of the overwhelming exposure to various advertisements. In order to make sense of all the information regarding health and nutrition, consumers adopt simplifying strategies to make food choices easier (Rozin, Ashmore & Markwith, 1996).

Meanwhile, advertisers must adapt to consumer’s needs and preferences for healthier food alternatives. In attempting to appeal to various audiences, advertisers use different strategies and appeals to promote food products. When there are 30 different varieties of breakfast cereals to choose from at the grocery store, knowledge of nutrition and risk-preventing substances are useful to help consumers make each choice. Consumers acquire such knowledge through various outlets, including the mass media. Since the primary food-shopper in the majority of American household are female, it is especially important to understand what advertising appeals are used to attract female shoppers.  Thus, the present study aims to survey popular leisure magazines enjoyed by female audiences to determine the nature and extend of food products advertisements and associated claims used to appeal to female consumers. Analysis of advertising appeals and frequently promoted food products will promote understanding of underlying factors that contribute to the current global health issues.

What Do Women Eat? A Comparative Content Analysis

Step 2. Dare to be ME

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My Sources of MOTIVATION

I am motivated by success. To me, success is composed of three parts each containing an emotion coupled with an action:

1. the excitement of setting goals

2. the reassurance of making progress towards those goals

3. the satisfaction of reaching those goals.

Success is doing the things that I say I will do, and being the person that I want to be. Who I will one day be, I am now becoming. I am motivated by my success, because my success proves that I am one step closer to becoming the person that I will one day be.

Set Goals

“Chasing Dreams”

The first component of success is setting goals. In order to set the appropriate goals, I have to be self aware- knowing what I want in life, in my career, in my community. I am an idealist, a dreamer, and a believer. I set goals that are important to me. My greatest goal in the present and near future is leading a company of trainers and consultants to make an impact in the world by connecting people through effective interpersonal communication. Because my goals come from my heart, I do whatever it takes; I work for it, fight for it, and live for it. Because I am passionate about my goals, I make my goals a reality. The cycle of success continues when my accomplishment fuels my next goal. I am always chasing after my dreams, always moving forward.

Take Action

The next step of success is taking action and making progress. I learned that in order to reach a destination that I have never been before, I must travel on a road that I have also never taken before. I am currently pursuing my MBA because I will learn tools and gain resources that I don’t already have in reaching my goals. There is a certain element of uncertainty when I set out towards any new goal, but I am motivated by knowing I am heading in the right direction. This is why I choose to face challenges and take on obstacles because they serve as proof that I am heading towards success and experiencing growth.

Have Integrity

Lastly, the act of doing what I say I will do and being who I say I want to be provide the greatest feeling of accomplishment and fulfilment. My past accomplishments during my undergraduate career and my professional experience give me confidence to set new sights and chase after bigger dreams. Every promise I make and keep to myself gives me confidence and courage. I am motivated by success because my successes, big or small, pave my path to becoming the person that I will one day be.

My Vision Board

How to get hired as an MBA Intern at Lululemon- Step 1. Industry Research

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My Interests

With a background in sales and experience working in fashion, I am especially interested in the apparel industry. As a consumer, I always carefully select brands and products that appeal to my values and needs. Lululemon is one of the handful of companies whose products I consume and brand that I advocate. One of my goals this year is to become an MBA Summer Intern at Lululemon. In preparation for achieving this massive goal, I have conducted preliminary research on the Global Apparels industry to gain market insight and better understand where I can add value in this vast industry.

Key Findings

The global apparel industry outlook is bright, with anticipated revenues of $760.3 billion in 2018. Although apparel is largely a discretionary purchase, strong growth has persisted since the recession especially in emerging markets while the North American market holds steady. As disposable income per capita grows along with global population, shoppers will continue to seek higher-value clothing in greater quantity.

Among the emerging markets, the Asia Pacific is the world’s largest regional apparel market, projected to grow by $175 billion between 2012- 2017. China specifically contributed to 50% of Asia Pacific’s total apparel sales value in 2012. In addition to steady demands for international luxury brands in countries like China and Hong Kong, Asia is also leading the pack in internet retailing. By 2017, 50% of the world’s internet user will reside in Asia. I am ecstatic that Lululemon is expanding into Asia and this is where my cultural insights and understanding of market segments in China can add value to Lululemon’s marketing and strategy teams.

Within the industry, product segments are generally clearly defined. Women’s and girls’ apparel make up almost two thirds of the revenues generated, while men’s apparel accounts for the remaining third. While women shop more primarily due to changing seasonal trends, men’s spending on clothing is highly discretionary. Even though discretionary, men’s consumption of sports apparel must be just as great as women’s, and this is where market research is necessary to understand men’s purchasing behavior and how they can be converted to join the Lululemon revolution.

Notable Trends

The marketplace is highly competitive with low concentration. The industry’s four largest players each have less than 2% of market share. Thus the keys to success in the industry include establishing strong brands and capturing customers within niche markets.

Consumers are highly influenced by brand image and advertising. One particular marketing strategy on the rise is the opening of “flagship” stores in high traffic central locations within large markets. Companies build unique and interactive physical retails stores as a key destination to attract local and visiting customers.

What’s Next

The industry is mature and steady in North America, but still blooming in emerging markets. There are huge opportunities for growth and I plan to take part in it and make a difference. This leads to Step 2 of “How to get hired as an MBA Intern at Lululemon”.

To be continued…

 

Euromonitor International. (2013, May). Global Apparel (Part 1): Shifting Distribution Landscape and Market Performance. Retrieved from Passport GMID database.

Panteva, N. (2013, March). Global Apparel Manufacturing. (Industry Report No. C1311-GL). Retrieved from IBISWorld database.