Part one

1.Threat

Lululemon Athletica’s CEO blamed women's fat thighs for making his yoga pants see-

through

Meida

Social Media

StockInternal Communication

Customers

0

5

10Scale

2.Magnitude

We have chance

From Helio Fred Garcia

45 m

in

6 hou

rs

3 day

s

2 wee

ks after

451. CEO does nothing. This interview clip

would be spread and reach more audience. Lululemon’s reputation would suffer.

2. CEO apologizes for his inappropriate words. He would not resign and the news would stop spreading.

3. CEO apologizes and promises to improve the quality of his company’s pants. He would not resign and the news would stop spreading. Also, the number of customers would not decrease. People might think this is just his personal unintended mistake.

min

6hours

1. CEO does nothing. The stock starts to fall. The number of customers gradually decreases because of the spreading of the news.

2. CEO issues apology statement. Lululemon would suffer a little because the news has reached a part of their audience. The CEO would not resign.

3. CEO apologizes and promises to improve the quality of his company’s pants. He would not resign. The stock would fluctuate. Most of the customers would accept his sincere apology and believe his promise.

31. CEO does nothing. The stock would fall.

Stakeholders feel worried about the company and customers’ attitudes would be negatively influenced. The CEO probably doesn’t have the capability to reverse the situation.

2. CEO issues apology statement. The CEO may not resign if he shows sincerity in this apology statement. The company loses some customers.

3. CEO apologizes and promises to improve the quality of his company’s pants. He would not resign. The stock would fluctuate. Customers’ attitudes have been negatively influenced by media but the company still has the chance to reconnect with them.

days

21. CEO does nothing. The stock would fall dramatically. Stakeholders feel angry about the company. The CEO has to resign. The company has no capability to direct public opinion.

weeks

2. CEO issues apology statement. The company has lost some customers. The CEO has to resign. People expect the new CEO of Lululemon Athletic to give them better service or higher quality of product.

3. CEO apologizes and promises to improve the quality of his company’s pants, and then he resigns and introduces the new CEO. Loyal customers will probably stay with the company. The stock would fall. Media keeps focus on lululemon and its reputation would be damaged.

After 1. CEO does nothing. He must resign. Stakeholders and customers have been negatively influenced a lot. The company’s reputation has been damaged. The sales would go down.

2. CEO issues apology statement. He must resign. The effect of this apology statement is limited because it is so late. It would stop the critics to some degree. The company’s reputation has been damaged.

3. CEO apologizes and promises to improve the quality of his company’s pants, and then he resigns and introduces the new CEO. The company’s reputation has been damaged. The company has difficulty getting customers back. But the new CEO might bring some fresh air to the company.

2weeks

4. Affected Stakeholders

• Customers

• Employees

• Shareholders

• Suppliers

5. Additional Information Required

innovative products;

loyal customers;

inspires people to be healthy

expensive;

only one manufacturer

media focus;

insistence on quality;

expanding business beyond yoga

past quality issues;

CEO’s unpredictable behavior

competitors;

Part two

Communication Plan

1. Business objectives

Prevent loss of sales.

Stabilize stock price.

2. Communication objectives

• Preserve reputation.

• Maintain customer loyalty.

• Maintain shareholder confidence in management.

• Generate confidence in Lululemon.

3. Communication strategies

Apologize as soon as possible.

Demonstrate that Lululemon cherishes customers.

Show that Lululemon takes full responsibility.

Engage people via online CSR activity.

4. Audience

Loyal customers

Potential customers

Media

5. Messages

Responsibility

Lululemon will not only apologize for the mistake made by the CEO, but also will improve the quality of the product.

Confidence

Stakeholders and customers can be confident in Lululemon and trust that the company will fix the problem and do something better.

Reputation

Maintain long-terms relationships with customers by fulfilling customers’ needs and expectations.

6. Tactics1. Offer return service for the problematic yoga pants in exchange for an equal price gift card, other apparel, or a cash refund.

2. CEO releases a video and issues statement to apologize and then resigns with one week.

3. Designate a new CEO who will give a speech publicly as soon as possible. The speech includes what she/he will do to make Lululemon’s products more customized and high-quality.

4. #ITrustLululemon on social media. Lululemon donates one dollar for each person who posts #ITrustLululemon from 10 Nov. to 31 Dec, 2013 to charities.

5. People receive a “Thank you” card when they purchase apparel in store. The “Thank you” card includes $5 dollar for next purchase and different sweet words to encourage people, for example: You are beautiful; Thank you for being with us.

6. Pitch stories to media to follow how much money lululemon has donated to charities.

7. Implementation

1. New return and exchange policy.

2. CEO Chip Wilson’s apology and statement of resignation.

3. New CEO’s onboard statement with emphasis the quality of Lululemon’s products.

7. Implementation

4. Social media account executives manage and promote #ITrustLululemon

5. Design and print “Thank you” cards.

6. Financial documents to track charity donations.

8. Assessment

• Media presence – how many positive stories in media and how many negative stories in media

• Stock price.• Participants in #ITrustLululemon• Volume of sales.• Customers’ feedback.