Coming to Canada and being exposed to the local favorites (brands) the city has to offer was both a delight as well as an eye opening experience for me. Drawing from my first Blog post (2nd last Blog post), I was very taken in by the local iconic brands unique to the region. Roots, Tim Hortons, Hunter Boots – and yes – the ever-popular Lululemon!
Having discovered the brand in late September, I was intrigued by how popular their wares were! People striding up and down the university walkways with their Lululemon hoods drawn close to their brow, bombarded by kisses from the afternoon rain.
Yoga pants are very popular here too, aye?
This got me thinking, with Lululem’s success and popularity amongst such a large customer base, why then did it still have such high inventory stocks left idol???
Some might justify the firm’s overproduction of their commodities to be intentional. This would allow the firm to engage in intentional ‘clearance’, and ‘warehouse’ sale events that would inevitably attract more customers with lowered prices. Other’s believe it’s negelegence and inefficiency on the part of the firm that allowed an overproduction (and otherwise known as misallocation of resources – dragging down net profits) to occur.
I side with Ritual’s ‘s point of view wherein her blog addresses the issue of Lululemon’s misallocation of resources into the over production of its commodities. I believe the access inventory stock works as a double edged sword, Though some customers stand to gain from the promotion of sale items, the business and it’s are stakeholders ultimately threading a very fine line between making a profit or losing significant revenue. This risk would deter most potential stakeholders from investing in the future.
Bibliography:
Ritual’s Blog Post:
Jonathan Ratner. “Lululemon Athletica Inc Has More Inventory Problems.”Financial Post Lululemon Athletica Inc Has More Inventoryproblems Comments. N.p., 23 Mar. 2015. Web. 04 Oct. 2015
Picture bib:
http://www.luluaddict.com/2014/12/new-resolution-hobo-bag-stress-less.html