In 2005, Chip Wilson, the founder of lululemon athletica is thinking about selling a 48 per cent stake in his firm. With $90 million in sales in 2005, lululemon athletica has a bright future ahead. In addition to U.S. expansion plans, the firm is expanding international operations. This case is the seventh in a series of seven lululemon athletica cases that focus on decision-making using real-options analysis. Other case in the series are: 9B06M036, 9B06M037, 9B06M038, 9B06M039, 9B06M040 and 9B06M041.

The chairman and chief product designer of lululemon athletica is preparing to address an audience at an investor's conference. He describes lululemon's great success from 1998 to 2006 and analyses the growth opportunities it faces. This case helps students understand the concept of competitive advantage in relation to the functional and emotion marketing drivers. In addition, it underlines the importance of preserving brand equity and prioritizing strategic growth options.