I think Lululemon can be considered an oligarchy because of its choice in products. It has made itself exclusive and the horseshoe logo can be recognized by females (and many males) everywhere. The company can be fairly confident in its product when competing with other clothing companies (consumer acceptance barriers) but it still has to be considerate of the consumers reaction to price changes. If the price is too high, there are a few similar brands the consumer can turn to. In this article, Lululemon is using product quality as a non-price competitive strategy and is changing its product by improving the zipper without passing extra costs on to consumers.
In my opinion, the company shouldn't have lowered its prices to that degree. Consumers who were willing to pay for the brand before, will still most likely be willing to pay in a recession because of the image or prestige that comes with buying the product. By lowering the prices, Lululemon is not only lowering its profit, but it is lowering the competitive barriers that are in place of being an exclusive athletic clothing store, inviting more competitors into the market.
