Lul Lemon

Table of Contents

Issue #1 ………………………………………………………………………………3

Issue #2 ……………………………………………………………………………….3

Issue #3 ……………………………………………………………………………….4

Recommendation ……………………………………………………………………..5

Dominant Economic Characteristics ………………………………………………....6

PESTEL Analysis ……………………………………………………………………7

Five Forces Analysis …………………………………………………………………8

Drivers of Change in the Industry ……………………………………………………9

Competitor Analysis……………………………………………………………….....10

Current Strategy……………………………………………………………………...12

SWOT Analysis………………………………………………………………………13

Financial Analysis……………………………………………………………………14

Issue ＃1

The first problem should be product. It includes the quality, design, and material comfort. First, 17% of its bottoms are too sheer and the customers complained that the pants are pill and shred. Quality is the most important factor although the company seeks the rapid growth. The company discovered black lulu lemon had a degree of sheerness and it did not meet standards. The major problems are dying and supply chain issues, which are by the company’s rapid growth. Every shopper who spends money on products expects good quality and these incidents have tarnished perception of the company. Estimated cost of recall is totally 67 million dollars revenue while quality problems damaged the brand image. The company’s products had a major manufacturing defect. This led to a costly product recall. Lulu lemon must focus on quality to change a premium price for their products.

Issus#2

Lulu lemon’s second problem is labor cost and price control. Lulu lemon’s product costs in overseas have been increased. In 2012, about 34% of Lulu lemon’s products were produced in China and cost are being significantly increased, which have a negative impact on their operations, revenue and earnings. At the same time, in Cambodia and Bangladesh, Lulu lemon’s business is highly changed in labor regulations and shortage of labor, which would increase costs. Like labor strikes or poor working...