Chapter 9 delves into collusive strategies, illegal ways in
which “several firms in an industry cooperate to reduce industry competitiveness
and raise prices above the fully competitive level” (Barney 246).
While Lululemon has not been accused of this, Nike’s takeover
of Umbro, a rival athletic apparel supplier, in 2007 was questioned as possible
collusion. Despite the large market
share that resulted from the transaction, the merger was ruled legal (http://www.wired-gov.net/wg/wg-news-1.nsf/0/1FEB32C065494417802573D20053FEFD?OpenDocument).
There are a large number of firms in the active wear apparel
industry. Because there is such a
product and cost heterogeneity amongst the brands (i.e. Lulu vs. Reebok), the
industry doesn't necessarily foster collusive transactions (Barney 260).
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