Question

lululemon athletica, Inc. in 2020: How to Respond to the COVID-19 Pandemic?

It is April 17, 2020, and the Board of Directors of lululemon athletica, Inc. has employed you as a crisis consultant to assess the company’s overall situation during the COVID-19 Pandemic and recommend a set of specific, measurable and rapid actions for the company to take to quickly restore the company to health and outstanding performance. Please prepare a report to lululemon’s board of directors that makes a list of action recommendations that the company needs to follow into order to put the company back on track in Fiscal 2021.

As of April 17, 2020, the Chief Financial Officer for lululemon has just resigned, and is leaving the company on May 8, 2020. Further, the company’s physical stores in North America, Europe, Australia, New Zealand and Malaysia are currently closed. Writing to the company’s stakeholders worldwide, Chief Executive Officer Calvin McDonald had the following to say:

The impact of Covid-19 is difficult to process as we navigate the uncertainty of the situation on a daily basis. People are the heart of lululemon, and through this period, we are committed to doing right by our teams, guests, and global communities.

Your assignment as the company’s crisis consultant is to make recommendations to ensure the success of lululemon through the crisis and to restore the company to physical and financial soundness in Fiscal 2021.
Question:
Your report should be prepared as a three page Executive Summary of Recommendations. Your recommendations should be specific and be clearly supported by your analysis of the company’s financial situation. You may supplement your 3-page summary with an appendix that contains (a) an analysis of the company’s financial statements and/or pro-forma financial projections and (b) other appendices that you consider appropriate. You may also include a table of References to sources that you use in your Executive Summary.

Notes:

• Three pages MAXIMUM for your Executive Summary of Recommendations. This three-page maximum does not include any Appendices or the Reference list.

• It is required that you cite your sources in your recommendations and provide a reference list in your appendices.

• Please use the Executive Summary template that is provided to make your report.

(Example of how to do):

Company Name> Executive Summary

Recommendations:

1.

2.

3.

Appendix

Appendix

References:

Answer 1

Answer-

Executive Summary

Lululemon has been engaging individuals to arrive at their maximum capacity through giving the correct instruments and assets since being established in 1998. Since 1998, Lululemon have made extraordinary walks in the games attire world extending from ladies' yoga jeans to men's footwear. With the development of innovation in regular day to day existence, Lululemon is breaking into the wellness innovation advertise.

Our group has chosen to create and convey a remote wellness tracker, called the "Luup". The Luup is intended to be worn around the foot and use Bluetooth innovation to combine with all major cell phones to tally steps and track calorie maintenance, yet in addition screen the pulse of the shopper. The Luup varies from current items in the market through its strength and battery life. The worth got from this item will be certainly justified regardless of the cost, as it will incorporate the Lululemon lifetime guarantee.

Our objective market incorporates people between the ages of 16 and 45 who are truly dynamic. With our demonstrated reputation of value and significance, we hope to complete our development methodology and advance wellness in regular day to day existence.

Company Overview

Lululemon is a notable athletic attire company. Chip Wilson, the author of Lululemon, initially began in the surf and snowboard dress industry and held onto the second and moved into the yoga pattern at the perfect time.

In 1998 in Vancouver, Canada Lululemon was created and characterized as a yoga-roused, specialized athletic attire company for ladies just as men. The main structures that brought the company name into the market were made for ladies to wear during yoga. November of 2000 the first independent store opened which was only the start of the development Lululemon would take on.

The base camp and plan and assembling offices are situated in Vancouver, British Columbia inside Canada. Assembling offices are additionally found somewhere else inside Canada, the United States, China, India, Israel, Indonesia, just as Taiwan. Appropriation places for Lululemon can be found in Vancouver (Canada), Sumner (Washington), Melbourne (Australia), and Columbus (Ohio). Having accomplices situated far and wide make it conceivable to create and make lovely, various items.

Deals are made through Lululemon's own system of company-possessed retail locations just as on the web and through spring up shops. Items arrive at clients through three principle channels including corporate-claimed retail locations, direct to shopper deals, just as discount, and littler channels including establishment, and a couple of different ways.

In mid 2005 Lululemon had extended to 15 stores inside Canada just as 3 inside the United States. The company had likewise opened their first station in Australia and a store in Tokyo. With this development deals soar to 60 million USD in 2005 and had more than 300 employees.All the extension Lululemon was taking on had lead them to sell 48 percent of the company in December of 2005 to two capital endeavor firms so as to help subsidize the extension. By selling this segment of the company deals raised to almost 108 million USD, enabling Lululemon to extend to more stores at a quickened rate.

Lululemon has since extended its item width with the assistance of criticism from clients, diplomats, and first class competitors. There are currently plans for yoga, running, cycling, preparing, swim, to and from, just as numerous other sweat-soaked interests for people.

Differentiation

Lululemon endeavors to separate themselves from contenders through the utilization and usage of various techniques and systems. The company's vital deals techniques sets with nearby business visionaries just as competitors who have an energy for their networks and bettering both themselves and the encompassing networks.

The objective is to concentrate on quality over amount all through all parts of their business. Inside the vital deals area of the company there are three projects executed, those being discount, yoga hard merchandise, and group programs. Lululemon's group program is actualized to grow enduring associations with athletic groups, wellness offices, and yoga studios that are improving their networks by being a stand apart model for wellbeing and wellness.

The company accomplices with groups who value perspiring all day every day while deciding to utilize Lululemon items to prepare in just as contend in. Qualification is dependent on enthusiasm to hoist your locale from normal to extraordinary, if the group can meet a base request of twelve pieces for each style and shading, just as if the group requires athletic attire for rivalries and preparing. The program acknowledges just a set number of utilizations so as to guarantee that the company can completely bolster groups who share comparable dreams.

Upper hand

Just as separating themselves from contenders, Lululemon additionally has a few upper hands contrasted with contenders. Those including item quality, client unwaveringness, licensed material, productivity, advancement, and responsiveness to clients.

With regards to protected materials Lululemon possesses 45 licenses on its sports equipment. These licenses take into account Lululemon to possess the privilege or title for a set timeframe to reject different contenders for making, utilizing, or selling an item.

A plan patent is normally conceded for a long time from the date the structure patent is allowed to the company. Licenses can't be reestablished once they are lapsed, by then the structure is accessible to all. In spite of the fact that Lululemon's licenses won't keep going forever the licenses will keep going for quite a while permitting the company to have a serious edge over contenders.

These licenses will stop contenders for a long enough timeframe to where contenders won't have the option to structure comparative items and customers will go to Lululemon. When the licenses are lapsed the odds of the plan being outdated are high so it won't be useful to contenders when it turns out to be uninhibitedly accessible.

Organizational Structure

The accomplishment of Lululemon can be connected back to their organizational structure that they include actualized inside the company. Lululemon has decided to go with an utilitarian organizational methodology. A useful organizational procedure is one of the most widely recognized organization systems.

This kind of system takes into account the organization to aggregate representatives dependent on particular, comparative arrangements of jobs or undertakings. Lululemon separates its organization into six diverse specific classes. These classes incorporate system, network and brand, inventive, human relations and culture, retail in Americas, and visual promoting. Inside those particular classifications there are additionally classes inside them including charge and web based business. Applying particular classifications inside Lululemon representatives are allowed the chance to use their insight with specialized skill just as work on various undertakings.

Every single one of these divisions have supervisors that report to somebody with more significant position authority inside the office and afterward they are to answer to the ones better than them, the CEO, chiefs, and co-chairman's. A top managerial staff is set up to keep up the benefit of the company. These executives were chosen by investors to decide on significant choices for the company. Setting personal circumstance aside the chiefs, CEO, and co-executives are required to do what will make the best advantage for the company.

Lululemon uses their organizational structure to get criticism from various offices at a quicker pace. The company means to have the structure be as level as could be expected under the circumstances. By doing so it is accepted that the company all in all is profiting, permitting critical cross correspondence to develop and separate the items offered by Lululemon.

The board endeavors to have data stream from the structure procedure to the racks in retail locations in a brief time of 45 days. Using this structure takes into account Lululemon to conjecture all the more precisely and capacity at a higher proficiency rate, working inside spending plan and utilizing vital arranging.

Since January of 2014 Lululemon has been working under the authority of Laurent Potdevin. Laurent Potdevin is the retailer's third CEO since the company began. The principal CEO and originator of Lululemon, Chip Wilson, ventured down from CEO in 2005 in the wake of selling 48% of investor stake in Lululemon.

In the wake of causing negative exposure for the company and hurting the notoriety Chip Wilson had chosen to leave totally in 2013. Following Chip Wilson came the second CEO Christine Day who had declared her abdication in 2013 in light of the fact that her vision didn't coordinate that of the author Chip Wilson's. Lululemon executives are certain about Laurent Potdevin's capacities to enable the company to develop to its most prominent potential.

CEO and Director-Laurent Potdevin

Co-Chairmen-David Marks Mussafer ,Glenn K. Murphy

Top managerial staff:

Jonathan McNeill,Kathryn Henry

Michael Casey,Robert Bensoussan

Tricia Patrick,Emily White

Martha A.M. (Marti) Morfitt

The COVID-19 pandemic is presently a worldwide wellbeing emergency and requires every one of us to have any kind of effect. During this remarkable time, the security of all lululemon colleagues, customers, and accomplices keep on staying a top need.

Our spotlight right presently is on ensuring we're doing all that we can to decrease the danger of the infection spreading inside while working remotely with our customers to assist them with overseeing through this difficult period and this incorporates every single careful step to guarantee our colleagues, temporary workers, accomplices and customers remain safe.

We accept that our quick development to move work to remote status, with our exceptional arrangement of remote empowering advancements, alongside our re-appropriating ability, will situate us fantastically well to step forward to join forces with our customers to keep up efficiency levels, while decreasing their general expenses. When the underlying negative effect and work interferences of our customers from COVID-19 has been ingested, we may really observe an expansion in the open doors where lululemon can develop its associations with its customers. Europe is severely affected with covid-19. WHO progressively engaged in Spain after Italy. In spite of the fact that following quite a while of solid lock down in Italy, the circumstance isn't leveled out. All the stores are shut in this pandemic circumstance. Further great advancement is being seen in Austria, the Natherlands, and Switzerland. Around there, our stores can be opened with the prudent steps. Be that as it may, a few nations are still in a terrible shape currently like Turkey, Ukraine, Belgium and Norway.

Absolutely, Sweden is additionally affected. Preparing and setting up the workforce so they can give protected and suitable data and care to individuals and the networks. We are observing intimately with the rules from Government.

Here are the significant move must be made consideration:

- All the worker of corporate workplaces ought to be telecommuting.

- Team individuals must have the option to do similar obligations, assignments and other work commitments as they do when working at a lululemon or customer office area.

- The colleague and chief will team up by means of Microsoft Teams all the time to assess the transitory remote work course of action required to help the two gatherings in taking care of the one of a kind obligations intrinsic to working remotely.

- This impermanent game plan doesn't change your all out number of work hours out of every day and week or some other terms and states of your business.

- Employees taking an interest in the impermanent remote work course of action must stick to all lululemon and customer rules, approaches and strategies.

- Maintaining pertinent security methods to guarantee privacy and to defend organization and customer information, licensed innovation, records and data in their ownership or got to while taking an interest in this impermanent game plan.

- All division records, records and archives must be shielded from unapproved divulgence or harm and agree to arrangements and techniques.

- Highly delicate information may not be expelled from the organization or customer area without composed assent of the chief and the customer.

Conclusion

In conclusion, the organization has chosen to push ahead with The Luup. Lululemon has a high notoriety related with its image name and has demonstrated to be effective with the organization's creative items in past years. Bringing The Luup into the organization's item blend will enter the organization into an entirely different market.

The organization's advertising systems will take into consideration Lululemon to acquire a generous percent of the piece of the overall industry. The organization will re-appropriate the item and utilizing existing store network courses previously being utilized to convey different items offered by the organization. Considering the organization's NPV of 121,943,303.44 and WACC of 10.00%, The Luup will be a money related achievement and will be useful to Lululemon. In this manner, the organization trusts The Luup will be a positive expansion to the Lululemon item blend and the organization is sure about pushing ahead with the creation of Lululemon's new item, The Luup.

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