The observation of social class stratification is also important for Lululemon Athletica Inc. Offering luxury products at premium prices to a market where the high-end market is considerably small in number will require Lululemon Athletica Inc. to adopt the niche marketing strategies. Louis Vuitton is known globally and has a strong image in Singapore, China, Hong Kong and Japan which are leading financial hubs and individuals with high net worth. Nike PESTLE Analysis.pdf. Before entering new markets or starting a new business in existing market the firm should carefully evaluate the environmental standards that are required to operate in those markets. Lululemon operates at wide range of market. This will help in better predicting the environment policy of the country. Fern Fort University. Level of corruption - especially levels of regulation in Consumer Goods sector. WebImportance of PESTEL Analysis in Strategy Management & Planning Process Strategy planning process often requires five steps 1. Operating in countries with high corruption level and weak law enforcement makes the business environment increasingly unpredictable for Lululemon Athletica Inc. due to jeopardized public trust on business organizations and overall political and economic structure. (2008, December). University of San Carlos - Main Campus. Ignorance in this regard can cause undesired circumstances for Lululemon Athletica Inc., such as- hurting competitive advantage as a result of intellectual property rights violation and harmed organizational image due to violation of consumer/employee/environment protection standards. Political activity in the external environment influences Lululemon's ability to operate efficiently. Lululemon Athletica can leverage this trend to expand the market beyond its traditional customers by employing a differentiated marketing campaign. - Paris Climate Agreement and Commitment of National Government under the Agreement What are the commitments of the country under the Paris Agreement and what is the general level of consensus regarding Paris Climate Agreement in the country. Analyze the Lululemon Athletica external competitive environment to identify opportunities and threats. Managers at Lululemon Athletica need to examine three inter-related environments in order to come up with an effective strategy. Posted by Zander Henry on Some examples of environmental factors that Lululemon Athletica Inc. need to consider are given below. Competition Levels Following economic factors need to be considered by Lululemon Athletica Inc. to make informed decisions: The economic development of a country directly influences organizational performance. - Adherence to Common Law Is the country following common law which is uniform for all parties whether domestic or international. Research and development activities are highly important in an environment characterized by creative disruption. Scope of the Report of Sports Bra and Underwear - Nature of Social Contract between Government & Society Before entering into a market Lululemon Athletica needs to understand the nature of social contract between government and society. Lululemon sell premium products and they customer are more brand loyal and will stick. Moreover, the business performance of Lululemon Athletica Inc. is also influenced by the extent to which the host country government has spent on core infrastructure development. Porter Five Forces WebPestel Analysis is a strategic method/ tool used by marketers to analyse and evaluate the organisation's external marketing environment factors that directly impact the Lululemon Athletica Inc. must study and predict the labor market conditions to understand how it can attract talented workers and leverage their skills to improve business performance. The economic and regulatory environment in a monopolistic or oligopolistic structure will be different from the monopolistic competition and perfect competition. A firm should not only do technological analysis of the industry but also the speed at which technology disrupts that industry. Published: 2nd Nov 2020. They can impact individual firms competitive advantage or overall profitability levels of the Consumer Goods industry. Provide a rationale for why, analysis of the Canadian company "Alimentation Couche-Tard (Mac's) " using Porter's Five Forces. It is important for Lululemon Athletica Inc. to study the current trends in the country's political scenario as changes in government may alter the government's priorities towards the development of different industries. are considered rare or which species are endangered whose excessive consumption can cause trouble for the organization. Lululemon Athletica Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. Proposal, Assignment Writing Warning! Moreover, there are laws to set the maximum price, ensure a certain quality standard and protect consumers from fraudulent marketing claims. Despite Lululemon's best efforts to uphold the regulatory expectations of countries it conducts business in, similar legal actions could emerge if the company were to violate labour practices unintentionally or experience preventable injuries on work premises (Lululemon, 2017). - Laws regarding Monopoly and Restrictive Trade Practices As a new player Lululemon Athletica shouldnt be worried about the monopoly and restrictive trade practices law. WebThe PESTEL analysis is one of the management assessment methods from various points of view of political , economic , social , technological , environmental , and legal . - Inequality Index / Ranking on Gini Index Gini Index and level of inequality are a great barometer for harmony and development of a society. Published by HBR Publications. Lululemon Athletica should be aware of presence of such practices in a country. It is important for Lululemon Athletica Inc. to understand the peoples general attitude towards migration as it can influence firms ability to bring international managers to host country. The WebLululemon Athletica Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. Similarly a lot of European countries give healthy tax breaks to companies that operate in the renewable sector. Stricter tax laws against foreign enterprises in the United States will likely have an adverse impact on Lululemon since it operates most of its stores there or in Canada. Culture is considered an important variable by international marketing managers. In some societies, consuming the offered product is considered a status symbol, while, some people use the same products for functional aspects. Most recent surveys suggest that around 76 % students try professional Nordstrom can closely analyze. Skill level of workforce in Textile - Apparel Clothing industry. Industrial safety regulations in the Consumer Goods sector. Some countries offer subsidies for encouraging investment in renewable technologies. (adsbygoogle = window.adsbygoogle || []).push({}); The Macro environment factors such as inflation rate, savings rate, interest rate, foreign exchange rate and economic cycle determine the aggregate demand and aggregate investment in an economy. - Focus & Spending on Renewable Technologies How much of the budget is spend on renewable energy sources and how Lululemon Athletica can make this investment as part of its competitive strategy. Buy Professional PPT templates to impress your boss. WebThe Pestle Analysis Of Lululemon 966 Words | 4 Pages. Political: There are some political factors that are important to know while considering the performance of food chains like Arbys. Abercrombie & Fitch is an American fashion retailing company headed by president and CEO Michael Jeffries. Help, Academic In such an environment, Lululemon Athletica Inc. should invest in disruptive technologies to maximize the profits and re-invest the profits for future disruptive technologies. Nordstrom is operating in apparel stores in more than dozen countries and exposes itself to different types of political environment and political system risks. 4. For example it has been extremely difficult for US companies to enter UK health market as UK health system is a nationalized system and everything goes through contracts at national level. Today, new products are developed quickly, and supply chain partners have also gained more power. (2015). David T. Abercrombie founded the company in 1892, A&T managers promoted it as: The Finest Sporting Goods Store in the world. Some of the environmental factors that a firm should consider beforehand are -, In number of countries, the legal framework and institutions are not robust enough to protect the intellectual property rights of an organization. Such changes can also influence the consumers' spending patterns, causing the organization to revise its product and marketing strategies. submission, reproduction, or any other misuse in any manner. Entering in countries with high taxation level will directly influence the profitability of Lululemon Athletica Inc. High taxation affects international trade and prevents exports. - Attitude towards Health & Safety The attitude towards health and safety is often reflected in the quality of the products and cost structures of manufacturing processes. - Independence of Judiciary and Relative Influence of Government The judiciary independence often reflect both strength and credibility of the institutions in the country. WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. Disclaimer: This work was produced by one of our academic writers to help university students with their studies. The report also includes a PORTER and PESTEL analysis with the potential impact of micro-economic factors by region on the market. Use research as, 1. ), Recent technological developments by Lululemon Athletica Inc. competitors, Impact on cost structure in Textile - Apparel Clothing industry, Impact on value chain structure in Consumer Goods sector, Air and water pollution regulations in Textile - Apparel Clothing industry, Waste management in Consumer Goods sector, Attitudes toward green or ecological products, Attitudes toward and support for renewable energy. A close eye should be kept on analyzing the 5G and determining its potential to deliver positive business outcomes through enhanced user experience, increased speed and expanded access. Car industry is fast moving toward automation led by technology firm such as Google & manufacturing is disrupted by Tesla, which has stated an electronic car revolution. Lululemon Athletica should consider the fact that at deficit levels of United States in an emerging economy can lead to rampant inflation and serious risks of currency depreciation. As mentioned, the snowboarding industry is becoming increasingly competitive and requires constant innovation and management to retain market share. This was due to a desire to work with leading fabric suppliers and increased investments. It must look at regulations and law in each of countries that they operate in. (2014). Amazing Business Data Maps. The consumers spending patterns are influenced by their purchasing power of money. Lululemon Athletica has stringent norms for health and safety norms so in emerging economies it may have to compete with players who dont have high cost structures that of Lululemon Athletica. Patents are very important in Lululemon operation to have advantage of their competitor. Lululemon Athletica Inc. must adjust its business management practices while entering in markets with high or low power distance. By association, should these companies engage in unethical business practices Is the "Yoga Bod" the new skinny? Company originally is from Canada and when they are entering to the new markets they might encounter Strict tax laws against foreign enterprises. - Level of Consumer Activism Regarding Environmental Concerns Lululemon Athletica needs to know the level of consumer activism regarding environmental concerns is. The Essay Writing ExpertsUS Essay Experts. and they got success as well but they continue with their same design so after some time all people avoid the brand product because there is a huge competition in the market because lots of company 's available to compete for example Nike, Adidas, puma ,Reebok ,etc these are the company 's they always change their product with the fashion. Because of Dollaramas mix of alluring prices and exceptional product quality, it remains Canadas leading discount store despite. . Moreover, a well-developed governance system with a democratic political environment makes the business environment more comfortable for international business organizations like Lululemon Athletica Inc. Solution, Assignment Writing If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. Exploring strategy. Government policies supporting active and healthy lifestyle can have effect on Lululemon. At its early beginnings, A&F had been an outfitter of sporting goods and rugged apparel, but also a place where individuals could learn skills and get involved in the community. The high fluctuation on local currency can be a cause of serious concern for Lululemon Athletica Inc. Natural disasters in South East Asia and South Asia especially a concern because 82% of the Lululemon products come from manufacturing in these regions (Lululemon, 2017). With growing market, there will be opportunity to grow. The growing environmental consciousness and changing climatic conditions have made environmental analysis an important part of the PESTEL analysis. Currently, Lululemon Athletica Inc. is present in different countries, each having own political tensions. As such the impact of the external business environment factors on Huaweis marketing strategy are explained by the PESTEL Model as follows: PESTLE analysis It is important for Lululemon Athletica Inc. to understand economic factors such as foreign exchange/interest rate, labor market conditions, inflation and saving rates etc. 2. Changes in macro environment forces can impact the Porter Five Forces & industry attractiveness. Finally, the exchange rate fluctuation can also influence the profitability and international trade. WebAccording to an estimate, the annual revenue of lululemon in April 2022 was 7.468 billion dollars, and it has increased by 27.5%. Lululemon Athletica Inc. should consider the following legal factors when exploring a new market. academic writing services at least once in their lifetime! Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. - Health & Safety Laws What are the health and safety laws in the country and what Lululemon Athletica needs to do to comply with them. Webb, J. WebThe Lululemon athletica in 2005 PESTEL Analysis will look at the external factors political, economic, social, technological, environmental, and legal. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Furthermore, A&F currently operates four other brands, which are: A&F, Abercrombie Kids, Hollister Company, and RUEHL. Bertels, H. M., Koen, P. A, & Elsum, I. Lululemon SWOT Analysis: Final Thoughts After completing this analysis, here is a collection of what we feel Lululemon is currently doing right and wrong. Each society has distinctive norms and values that play an important role in shaping consumer behavior. - Consumer Protection Laws Lululemon Athletica needs to know what are the consumer laws, what is the rate of enforcement, what is the attitude of authorities towards consumer protection laws, and what is the role activist groups in enforcement of consumer protection laws. Spanish oil giant Repsol had to face a similar instance. Class structure, hierarchy and power structure in the society. Lululemon Athletica Inc. must study the specific environmental regulations of the country under consideration to understand which resources (like water, electricity etc.) Taxi industry is now dominated by players like Uber and Lyft. The use of foreign labour and manufacturing resources among multinational enterprises can become complicated, where firms that violate principles of corporate social responsibility experience backlash from consumers often (Nam et al., 2017). Growing economies offer wide-ranging growth opportunities to the Lululemon Athletica Inc. To achieve such aims, data were collected, reviewed and analyzed within the industry. Many countries have placed strict norms to protect their urban areas through effective waste management. Anti-trust law in Textile - Apparel Clothing industry and overall in the country. Lululemon PESTLE Analysis: 6 External Factors Affecting its Business Strategy Under Armour is another example of Lululemon competitors, more similar in size to Lululemon than mega-brands Nike or Adidas. Moreover, considering the development and maturity level of technology in the respective market is also important. International Journal of Applied Engineering and Management Letters (IJAEML), 1(2), 78-97. Legal factors often govern conditions to enter the market, laws to operate in the market, and procedure to resolve any dispute with other stakeholders. 24-27). Lululemon Athletica Inc. needs to understand the online shopping behavior by considering the generational differences as younger consumers are more inclined to shop online than older customers. Even after restorations are made to repair breaches of this nature, data breaches require in-depth examinations to determine how to prevent future attacks. PESTLE analysis Political Lululemon operates at wide range of market. It must look at regulations and law in each of countries that they operate in. Lululemon is fast growing company that open stores or franchise in market such as America, Japan, Australia and Europe. Some of the legal factors that Lululemon Athletica Inc. leadership should consider while entering a new market are -, Order custom Harvard Business Case Study Analysis & Solution. IEEE. Integrity, Essay Writing WebThe Lululemon A Sheer Debacle in Risk Management has global operations and a global presence As such, the company has high exposure to global cultures and different Also Dollarama is in competition with Walmart but Walmart is not as similar as Dollar tree in terms of prices. Slow speed will give more time while fast speed of technological disruption may give a firm little time to cope and be profitable. Should nations where Lululemon operates enact disadvantageous tariffs, embargoes, or trade restrictions, the models Lululemon depended on for its expansion strategy could become obsolete (Lululemon, 2017). Growing tensions and instabilities in the global political environment can affect the Gold industry growth and limit the growth opportunities available to Lululemon Athletica Inc. Alternatively, Lululemon's business activities abroad are also subject to the rule-making of local political leaders (Bertels, Koen, & Elsum, 2015). The business and marketing strategies are also influenced by migration. WebLululemon Athletica Inc. case study PESTEL analysis includes macro environment factors that impact the overall business environment Political, Economic, Social, Technological, Soon, trusts became a new form limiting competition. Similarly, anti-discrimination laws (like equal employment opportunity) also need to be carefully studied when developing human resource practices as discriminatory suits against employer harm the organizational image and affect organizations ability to attract and retain the talent. The organization may also study the industry specific taxation policies to understand the host government's priorities and interest in developing industries. A., & Gomez, o. - Price Fluctuations in both Local and International Markets Compare to the level of quantitative easing in last decade the prices of Lululemon Athletica products and prices of overall products have remained sticky in the US market. WebPESTEL Analysis of Lululemon Athletica s Product Employee and Public Relations Issues Model was proposed by Michael E. Porter in 1979. If you need help with something similar, Shared beliefs and attitudes of the population play a great role in how marketers at Lululemon Athletica Inc. will understand the customers of a given market and how they design the marketing message for Textile - Apparel Clothing industry consumers. 3. Strategy planning process often requires five steps Lululemon Athletica Inc. can take it as an opportunity and adopt green business practices to win the trust of stakeholders. International business. Springer Berlin Heidelberg. The organization should also carefully consider the interest rate and its influence on borrowing ability and attitude towards investment. 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Some examples of environmental factors that are important to know while considering development... Activities and groups that impact and limit companies and individuals in a country lululemon pestel analysis % try... Chains like Arbys submission, reproduction, or any other misuse in any manner analysis with the potential of! Lululemon Athletica external competitive environment to identify opportunities and threats of technological disruption may a... Are entering to the new markets they might encounter Strict tax laws against foreign enterprises all parties domestic... Power structure in the society an environment characterized by creative disruption effective.! 966 Words | 4 Pages slow speed will give more time while fast speed of technological disruption may give firm... And attitude towards investment 's Five Forces and political system risks: this work was produced by one of academic... Analysis with the potential impact of micro-economic factors by region on the market Zander. From Canada and when they are entering to the new markets they might encounter Strict tax laws foreign. Can impact the Porter Five Forces & industry attractiveness especially levels of regulation in Goods! Power of money in markets with high or low power distance for the organization revise. Three inter-related environments in order to come up with an effective Strategy was due to a desire to work leading! Increased investments services at least once in their lifetime and threats groups that impact and limit companies individuals... Practices is the `` Yoga Bod '' the new markets they might encounter tax... Journal of Applied Engineering and management Letters ( IJAEML ), 78-97, remains! Issues Model was proposed by Michael E. Porter in 1979 environments in order to up! And overall in the renewable sector environment policy of the institutions in the society factors...