Why is Lululemon interested in competing in the women's athletic apparel market?

The I/O Model of Above-Average Returns

In the I/O (Industrial-Organizational) model of above-average returns, companies seek to achieve competitive advantage by focusing on external factors such as industry characteristics, rather than internal capabilities. This model suggests that a company's performance is heavily influenced by the industry in which it operates, and firms should strive to align their strategies with industry trends and opportunities.

Reasons for Lululemon's Interest

Lululemon would be interested in competing in the women's athletic apparel market due to several key factors:

• a. The company has capabilities in the production of women's athletic apparel.
• b. The leadership is well-positioned to appeal to female customers' needs.
• c. The company is using its expertise in apparel production to transfer to a new market.
• d. Industry trends suggest above-average growth.

Final Answer

Lululemon would be interested in competing in the women's athletic apparel market due to their capabilities in apparel production, well-positioned leadership, and industry trends indicating above-average growth.

Explanation

Lululemon would be interested in competing in the women's athletic apparel market for a few reasons. Firstly, the company has capabilities in the production of women's athletic apparel, which means they have the necessary expertise and resources to enter the market. Secondly, the leadership of Lululemon is well-positioned to appeal to female customers' needs, as they understand the target market and can design products that cater to their preferences. Lastly, industry trends suggest above-average growth in the women's athletic apparel market, making it an attractive and profitable market for Lululemon to enter.