Beini Chen's Blog

Lululemon is a sportswear and yoga clothing store founded and based in Vancouver. The store’s products ranging from the iconic Lululemon yoga pants to their huge totes and headbands have swept the fashion industry in Vancouver. Lululemon is entrepreneurial because it satisfies the conditions: amount of wealth creation, speed of wealth creation, risk and innovation.

Lululemon has created a lot of wealth within its company. The company is currently valued on Nov 10th 2011 at $54.45 per share and has stated that it would reach $1 billion in sales in the 2012 fiscal year, with $1200 per square foot in store productivity.

Additionally, Lululemon has created this wealth very quickly as they started as a company in 1998 and have now created 142 store locations by May 2011 in 3 countries: Canada, United States and Australia.

During its initial formation stages, Lululemon took risks by venturing into relatively unknown and un-proven markets. Rather than going into the regular clothing industry, Lululemon saw a need in the market for everyday athletic clothing and took the risk to attack that need.

Lululemon was innovative because they were the first on the market for athletic clothing and revolutionized it into clothes that the average consumer could wear on a daily basis rather than only when exercising. Their iconic yoga pants acted almost as a replacement for pants or jeans. Furthermore, other companies rushed to copy Lululemon albeit not having the same booming success.

As a Canadian-born Chinese, I have been able to experience both vastly different cultures in my lifetime. Many people in Vancouver exclaim over the exponentially rising prices of land and rent both downtown and in major suburbs. However, many new immigrant Chinese, who used to live in huge urban Chinese cities such as Hong Kong, Beijing or Shanghai, are just as amazed by how slowly the prices of land are rising here. For example, an average-sized apartment that my parents own in a fairly good location in downtown Beijing has experienced an eight-fold growth in price in the last couple of years. Prices doubling in a year is commonplace all over China.

In “What a Collapse of the Chinese Real Estate Bubble will mean for the World“, featured in Time Magazine, Ken Miller explains that the housing price bubble created in China has been just as important to its economy as cheap labor.

The Chinese government is currently focused on directing its economy towards domestic services and less towards exports, manufacturing and construction. If the Chinese economic bubble ever bursts, the consequences will be felt greatly both within the country and around the world as China is currently one of Europe and the US’s major importers and investors.

In Comm292, we learned about the importance of clearly defined, specific and non-conflicting roles in a business. Roles in a business should have clear expectations to combat role ambiguity. One of the most common mistakes that businesses make is to not define roles, tasks and goals for employees from the start. A good example of this mistake is illustrated in this article by The New York Times, “Confused, a Family Business Turns to a Coach“.

One of the sisters in the family business felt like she was taking on too much by playing both the roles of finance and production, which is called role overload. Additionally, the lack of clarity caused major confusion in the business. For example, they didn’t know whether to include each other in meetings or not. Not only did the role ambiguity affect their company, but it also affected their personal relationships. Eventually, the situation become so severe, the sisters hired a business coach to help them define their roles and consequently facilitate better communication.

Above is an example of some of the characteristics of roles in a business and how they integrate with each other.

For a business to be effective and productive, roles must be clearly defined, specific and all employees must understand their roles – even if that means hiring a business coach.

When Apple released the newest iPhone, many people were extremely disappointed by the iPhone 4s, which looks generally the same as the previous version, the iPhone 4. Although the outward appearance did not change, the newest iPhone features a faster processor, longer battery time and voice recognition.

While most tech writers are complaining about the disappointing new iPhone, one writer in this article from The New York Times, “Why the New iPhone Looks the Same“, depicts a different angle on the issue. He asserts that the new iPhone is simply following the Apple trend, where Apple nearly always chooses to make only minute differences to their products’ appearances.

For example, from 2004, the iMac switched to a minimalist white panel, which is shown on the left. In 2006, the aluminum based iMac, shown on the right, was released. This design is still used today.

The author of the article explains that Apple’s lack of new design for the newest iPhone, shown below, fits in with Apple’s strategy.

This article reminded me of the Comm101 class on strategy and tactics. If Apple’s strategy for its products is differentiation, then to maintain market share and brand recognition, its tactic is to keep design changes to a minimum.

Once Apple hits a design that they are happy with and attracts consumers, I believe that they will apply it so long as there is no reason for change. Why fix what isn’t broken?

In a recent article by The Economist, “Self-Induced Recession”, the constant battle between economics and politics on issues such as recessions are highlighted. According to the speaker, financial markets react predominantly to political development as opposed to economic ones. “A global economy with decent cyclical fuel and no obvious imbalances is being betrayed by politics” (G.I., 2011).

When most economists were warning of inflation, policy makers didn’t listen and when economists were predicting recessions, policy makers ignored them. Additionally, the article states that Europe’s recession, which is completely unnecessary, stems from an “erroneous diagnosis of the cause of the crisis” (G.I., 2011).

I found this article to be particularly interesting because we had recently discussed the European, and more specificly the Greek, recession in a COMM101 class.

The discussion was based on the fact that, despite the vast majority of economists agreeing on an issue, such as in this case the recession in Europe, politicians and policy makers are considering and then ignoring their advice. Why? This is simply because politicians care about the opinions of the general public and voters, most of whom don’t have any general understanding of the nature of economics.

Another example was the governmental regulation of apartment rent prices, which economists generally agreed was a bad idea. However, these regulations sparked a lot of debate in Vancouver, due to the exponentially rising prices and eventually, the government implemented rent price restrictions in select areas because voters were concerned with prices, not the economy itself.

Quite recently, at about late July 2011, the Advertising Standards Authority in the United Kingdom banned two advertisements by L’Oreal due to the over-exaggeration of its images. The photos were allegedly retouched to the point where they did not clearly represent the results that the serums could produce. L’Oreal admitted that they had in fact done retouches to “lighten the skin, clean up make-up, reduce dark shadows and shading around the eyes, smooth the lips and darken the eyebrows” on the advertisement featuring Christy Turlington.

Is it ethical for these makeup companies to use retouching to exaggerate or even misrepresent their products? Retouching is hardly an obscure issue any longer but are consumers truly taking these advertisements with a grain of salt? Could these photos depicting unattainable perfection in the features pose as a source of insecurity for young women reading these beauty magazines in which they are advertised? These large makeup companies assert that any supposed adverse effects produced are false. Certainly light retouching is not illegal by any means however it is still unethical to use technology to exaggerate the effects of a product and therefore inciting the consumer to be more inclined to purchase the product.