oikosPublicationsCasesLululemon’s commitment to the environment: A tangle of seaweed, suppliers, and social responsibility

Lululemon’s commitment to the environment: A tangle of seaweed, suppliers, and social responsibility

30 June 2010 | Cases | Marketing, Supply Chain

Case Abstract

This case introduces Lululemon, an athletic and yoga wear retailer, and their commitment to the environment. The company was founded on its Corporate Social Responsibility (CSR) initiative, and took pride in its innovative approach towards the environment. The company trusted the suppliers with which it had relationships, and believed the products it was buying were as the suppliers described. Lululemon, faced with pressure to expand and maximise profits while maintaining its CSR pledge to the environment and innovation, found itself in a difficult position when an environmentally-friendly fiber it used for a clothing product was determined to be marketed falsely.

Globalisation is an inevitable facet of today’s business world. Many companies rely on manufacturers and suppliers from around the world in order to manage businesses and generate profits. The connection between a corporate headquarters and its many suppliers illustrates, in some cases, exciting, new opportunities, and in others, ill-conceived relationships destined for failure. Companies that expand rapidly require more trust in the growing number of suppliers they rely on, and can experience growing pains more frequently or to a greater degree than those experienced by well-established companies with moderate expansion strategies.

Many businesses incorporate sustainability efforts as part of their strategic plan and corporate social responsibility initiative. Businesses are attempting to find a balance between responsibility toward the environment while maximising profits. Companies that incorporate sustainability as part of their strategic plan are often viewed as innovative and responsible; elevating their status as a socially responsible organisation.

This case introduces Lululemon, an athletic and yoga wear retailer, and their commitment to the environment. The company was founded on its Corporate Social Responsibility (CSR) initiative, and took pride in its innovative approach towards the environment. The company trusted the suppliers with which it had relationships, and believed the products it was buying were as the suppliers described. Lululemon, faced with pressure to expand and maximise profits while maintaining its CSR pledge to the environment and innovation, found itself in a difficult position when an environmentally-friendly fiber it used for a clothing product was determined to be marketed falsely.

This case has been developed for academics and professionals alike interested in the effects of rapid expansion, and the role CSR can play in a sustainability strategy when profit maximisation is pursued. It also deals with the trust needed between supplier and buyer, and the effects of ineffective due diligence. The case aids in analysing sustainability as a foundation for both strategic and CSR plans, as well as detailing how a company can be directly held responsible for its suppliers’ actions.

Authors: Andrea Erin Bass
Institution: University of Nebraska-Omaha, USA
Competition Year 2010
Place 2nd place
Track Corporate Sustainability
Key Words Globalisation, Growth Strategy, Corporate Social Responsibility, Retailer, Yoga, Clothing, Suppliers, Due Diligence, Fabric
Courses Marketing, Ethics and Social Responsibility, Operations Management, Business Administration
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