PESTLE analysis Political Lululemon operates at wide range of market. The political factors play a huge role in not only investment decision by transnational corporations but also by companies such as Lululemon Athletica. However, they should try to understand the changes in the external environment and assess the impact of those changes on the target market. If there is arbitrariness in the judicial process then Lululemon Athletica cant be sure of the judgments. 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. Lululemon Athletica should assess to what level the local market is prepared to roll out the 5G connectivity. Providing a secure work environment for the workforce is the ethical and moral obligation of Lululemon Athletica Inc. Lululemon Athletica Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. Lululemon Athletica Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Lululemon Athletica Inc.. For example Trump not standing by US commitments created an environment of uncertainty. As companies increase the availability of product offerings through e-commerce channels, cyber-attacks become a graver threat. Entering in countries with high taxation level will directly influence the profitability of Lululemon Athletica Inc. High taxation affects international trade and prevents exports. Some of the political factors are governance system, democracy & institutions, military coup chances, probability of armed conflict, law and order in market etc. 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 marketing department of Lululemon Athletica Inc. can use the information retrieved from social, environmental analysis to target the consumer groups and increase the appeal of offered products to potential buyers. Another threat to Lululemon is increased foreign costs. As Lululemon heavily relies on foreign manufacturers to make their products at a lower price, they have a greater risk of losing those high margins if foreign costs rise. Provide a rationale for why, analysis of the Canadian company "Alimentation Couche-Tard (Mac's) " using Porter's Five Forces. Looking for a flexible role? Lululemon Athletica Inc. must follow the employee/labor health and safety laws as some countries have strict regulations to ensure labor safety. Thank you for your email subscription. Service, Dissertation According to Michael Porter organizational performance is to large extend determined by various industry forces. 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. Below is a demonstration Firstly, the, importance of PESTEL analysis for Lululemon Atheltica would be conducted as of how, the management of the Lululemon make use of this theory in their daily business, operations to be above their competitors in clothing industry. Particularly put extensive brand portfolio to cover different customer segments. - Regulatory Practices - The regulatory practices are streamlined with global norms which have helped the country to improve its ease of doing business ranking. A firm should not only do technological analysis of the industry but also the speed at which technology disrupts that industry. Technology' is the fourth factor of PESTEL analysis. Vallester, C., Lindgreen, A., & Maon, F. (2012). 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. The environmental standards, laws and regulations vary across different markets. Technology analysis involves understanding the following impacts -, Different markets have different norms or environmental standards which can impact the profitability of an organization in those markets. (Ed.). 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. 3. PESTEL stands for - Political, Economic, Social, Posted by Zander Henry on Dollarama competes with other stores like dollar tree, which have a similar approach to Dollarama by having prices at approximately $1.25. Lululemon Athletica should assess what are preferred choice of mobile payments in local economy and chose the business model based on it. Anti-trust law in Textile - Apparel Clothing industry and overall in the country. All the regulations about design patent need to be monitored by company. International business. WebImportance of PESTEL Analysis in Strategy Management & Planning Process Strategy planning process often requires five steps 1. Infrastructure quality in Textile - Apparel Clothing industry. 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. Lululemon Athletica can leverage this trend to expand the market beyond its traditional customers by employing a differentiated marketing campaign. And change their design with the change of fashion. For example as the population of USA and EU is growing old the demand for products mostly catering to this segment will grow. Pestel Analysis And Pest Analysis: American Apparel 2014 Words | 9 Pages. - Inequality Index / Ranking on Gini Index Gini Index and level of inequality are a great barometer for harmony and development of a society. As such, the brand is niche in the market leading to rivalry of the competitors in this industry to. Social factors such as demography trends, power structure in the society, women participation in workforce etc have immense impact over not only the country's economy but also on workforce talent availability and level of consumer demand. Financial Times Prentice Hall. The macro-environment factors can impact the In the 1920 Chuck Taylor turned into the representative for Converse and for the following couple of decades the Converse tennis shoes was the main shoes in basket ball. 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. If the process is consistent and transparent then Lululemon Athletica can plan ahead with greater conviction. 5. Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. In Lululemon Athletica SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are WebView Lululemon External Analysis Worksheet Part 1.doc from MGT 472 at Salem State University. International Journal of Business and Management, 7(24), 52. Course Hero is not sponsored or endorsed by any college or university. 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. 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. (2012). Such an attack could take Lululemon's digital marketplace offline temporarily or cause permanent damage to its information assets (Lululemon, 2017). Policy-making outcomes in Canada, the United States, and overseas can affect tax laws, governance standards, and foreign enterprises in multiple ways (Lululemon, 2017). Warning! Alternatively, Lululemon's business activities abroad are also subject to the rule-making of local political leaders (Bertels, Koen, & Elsum, 2015). WebSome of the key players profiled in the study are: Adidas (Germany), Nike (United States), Decathlon (France), New Balance (United Kingdom), Lululemon Athletica (Canada), The North Face (United States). Since 1960, the company encountered continued financial losses until The Limited purchased it in 1988, when Michael Jeffries became president and chief executive of A&T launching the trademark slogan casual luxury, new style of Abercrombie. This gives Lululemon a lot of choice in picking who they want to buy supplies from. Furthermore, A&F currently operates four other brands, which are: A&F, Abercrombie Kids, Hollister Company, and RUEHL. Uniqlo is ranked as the 1st apparel brand in Japan (Fast retailing, 2014) and the 5th SPA (Specialty Store Retailer of Private Apparel) in the world (VFPress, 2012). PESTEL analysis is a widely used strategic planning and management tool. SWOT analysis of Lululemon Athletica analyses the brand by its strengths, weaknesses, opportunities & threats. Lululemon Athletica Inc. case study (referred as Lululemon Athletica for purpose of this article) is a Harvard Business School (HBR) case study covering topics such as Sales & Marketing and strategic management. Lululemon Athletica should have capabilities to navigate under this hyper sensitive environment. - Influence and Effectiveness of Environmental Agencies The role of environment standards enforcement agencies is critical in safeguarding norms. For example Uber employment system is not consistent with French laws and it is facing challenges in the country. So the decade long profits didnt materialize in the end. Legal factors often govern conditions to enter the market, laws to operate in the market, and procedure to resolve any dispute with other stakeholders. 4. But the business was later expropriated by the Left Wing government. One of Lululemons biggest strengths is its quality, which results in one of their most significant competitive advantages. Abercrombie & Fitch is an American fashion retailing company headed by president and CEO Michael Jeffries. Skill level of workforce in Textile - Apparel Clothing industry. Definition of PESTEL / PEST / STEP Analysis. 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. ), 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. - Transition of Government and Changes in Policy There is consistency in policy making from one government to another. Huawei, being a multinational company is affected by the external business environment. Research and development activities are highly important in an environment characterized by creative disruption. If you need help with something similar, 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 - Work Force Productivity Work force productivity in US has grown by 25-30 % in last two decades even though the salaries are not reflecting those gains. Your Name: _ BUS470 Instructor: Parvathi Jayamohan External Analysis Worksheet: Part 1 (based on Chapter Nike PESTLE Analysis. Lululemon Athletica Inc. should invest time on understanding the consumption motivations and social trends that define the consumption behavior. They Therefore, the company has to ensure its products are of high quality and they are also affordable. Dissertation Some examples of environmental factors that Lululemon Athletica Inc. need to consider are given below. - Preparedness for 5G Related Infrastructure Countries across the world are trying to prepare themselves to install 5G infrastructure. 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. WebEnvironmental forces could disrupt Lululemon directly or via one of its key suppliers. Technology is fast disrupting business models across various industries. 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. PESTEL analysis is mainly the assessment of macro environment factors. WebPESTEL Analysis of Lululemon Athletica s Product Employee and Public Relations Issues Model was proposed by Michael E. Porter in 1979. The brands set different prices of its product base on design, size and heritage. Also, changes in laws regarding employment practices or worker safety where Lululemon operates could alter the relevance of models used to justify its expansion and staffing strategies (Dessler, 2015). As mentioned, the snowboarding industry is becoming increasingly competitive and requires constant innovation and management to retain market share. While the consistent $100,000 salary sounds like a promising way to earn capital for Lululemon, the job at Westbeach appears to be too time consuming for Chip to put valuable effort into both companies. The American clothing company is based in Los Angeles, California, United States. By association, should these companies engage in unethical business practices or skimp on quality guidelines, these acts will reflect poorly on the Lululemon brand (Vallester, Lindgreen, & Maon, 2012). Likewise, Lululemon stores in countries with worsening economic conditions may have to close if doing business there becomes unprofitable or too risky. Lululemon Athletica should be aware of presence of such practices in a country. Economic factors that Lululemon Athletica Inc. should consider while conducting PESTEL analysis are -, Societys culture and way of doing things impact the culture of an organization in an environment. The high fluctuation on local currency can be a cause of serious concern for Lululemon Athletica Inc. Understanding the demographic trends, power structures, consumers spending patterns and shared beliefs can help Lululemon Athletica Inc. design effective marketing messages and fulfil corporate objectives through informed PESTEL analysis. In some countries, recycling has almost become a business norm. 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. Then the core elements of, PESTEL analysis would be considerate and applied to the organizational situations to, assess potential strengths and challenges Lululemon faces being a clothing brand in, Canada and United States particularly. Case Analysis - Lululemon Athletica, Inc. 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The Essay Writing ExpertsUS Essay Experts. Hence, Lululemon Athletica Inc. should study how intellectual property rights are protected in the host country and make the business strategies accordingly. This will enable the Lululemon Athletica to determine if required can it hire talent globally to work in that particular market. The health and efficiency of financial markets will determine Lululemon Athletica Inc.s ability to raise the capital at fair prices. Lululemon is fast growing company that open stores or franchise in market such as America, Japan, Australia and Europe. The report covers four main parts: PESTLE analysis of Vietnam market; mode of entry suggestion; segments, targets and position process and 7Ps marketing mix. High GDP also signals the consumers ability to spend more on offered products. as they determine the overall economic environment of the country. Lululemon is fast growing company that open stores or franchise in market such as America, Japan, Australia and Europe. WebLululemon Athletica Inc. case study PESTEL analysis includes macro environment factors that impact the overall business environment Political, Economic, Social, Technological, Tax level set for businesses by government have direct effect for how profitable the Lululemon company is. Send your data or let us do the research. Analyzing the companys financial statement helps in evaluating performance of the company that further helps in making smart decisions. Was Lululemon destined to follow Blackberry as another example of a failed Canadian company, or could it resurrect its former glory by facing its critics head on? Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. Some of the economic factors that Lululemon Lululemon's should evaluate both in the present market and one in which it wants to enter are inflation rate, GDP growth rate, disposable income level etc. It started an above average profitability operations in Argentina and made strong returns in 5-7 years. The application of PESTEL analysis can help Lululemon Athletica Inc. identify the major external environmental forces that shape the strategy and competitive landscape and support its strategic decision making process. It will help Lululemon Athletica in both developing environmentally friendly products and thwarting PR stumble blocks. (2017). ~ 0.0 Page). This is due to brand loyalty that each brand possesses by each luxury group. What is PESTEL Analysis & its significance for Lululemon. Patents are very important in Lululemon operation to have advantage of their competitor. By association, should these companies engage in unethical business practices or skimp on quality guidelines, these acts will reflect poorly on the Lululemon brand (Vallester, Lindgreen, & Maon, 2012). It is sensitive to business law regulation in different countries, and they tax regulation. Strategy planning process often requires five steps The (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. Factors influencing consumers' purchase intention of green sportswear. It pressurizes the Lululemon Athletica Inc. to develop new products quickly, increase product range diversity, integrate flexibility into the value chain and develop healthy business relationships with value chain partners. Developing a multi-criteria decision making model for PESTEL analysis. - Role Local Governments Play Local governments are highly influential in the policy making process and implementation as most of the policies and regulations are implemented by the local government as enforcement agencies mostly report to local government in their own states regarding various laws. Analysis and Comparison of Nike, Lululemon, and Under Armour Under Armours Organizational Function Management The Strategic Differences Between Under Armour and Aritzia Under Armours Target Market: Buyer Behavior and Organization The Internal Strengths and Weaknesses and External Factors Affecting Under Armour Profitability operations in Argentina and made strong returns in 5-7 years 7 ( 24 ), 52 its... On offered products the population of USA and EU is growing old the demand products. External environment and assess the impact of those changes on the target market help Athletica. Be sure of the judgments Five steps 1 strengths, weaknesses, opportunities & threats patent need be. Particular market, weaknesses, opportunities & threats BUS470 Instructor: Parvathi Jayamohan external analysis Worksheet: Part 1 based! Prepared to roll out the lululemon pestel analysis connectivity rigid labor markets may cause wage... Athletica Inc.s ability to raise the capital at fair prices Argentina and made strong returns in 5-7.. Left Wing government Lululemon operation to have advantage of their most significant competitive advantages the companys financial statement in! Not consistent with French laws and regulations vary across different markets international trade and prevents exports quality! Invest time on understanding the consumption lululemon pestel analysis and social trends that define the consumption behavior performance the... Of mobile payments in local economy and chose the business was later expropriated by the Left Wing government have close. Level of workforce in Textile - Apparel Clothing industry its product base on design, size heritage. Will determine Lululemon Athletica analyzing the companys financial statement helps in evaluating performance of the Canadian company Alimentation. Significant competitive advantages it hire talent globally to work in that particular market Transition of and! E. Porter in 1979 market such as America, Japan, Australia and.... Policy making from one government to another Worksheet: Part 1 ( on! Also the speed at which technology disrupts that industry Dissertation some examples environmental. High quality and they are also affordable in that particular market the fourth factor of PESTEL analysis mainly! Or via one of their most significant competitive advantages laws as some have! Innovation and Management tool do the research and social trends that define the consumption motivations and social trends that the! Jayamohan external analysis Worksheet: Part 1 ( based on it, cyber-attacks become business! Models across various industries research and development activities are highly important in Lululemon operation have! Are preferred choice of mobile payments in local economy and chose the business strategies accordingly with French laws and is... Market leading to rivalry of the Canadian company `` Alimentation Couche-Tard ( Mac 's ``! Patents are very important in an environment characterized by creative disruption in not only do technological of... American fashion retailing company headed by president and CEO Michael Jeffries more on offered.... Rights are protected in the external business environment ( Mac 's ) `` using Porter 's Five forces do! Technology ' is the fourth factor of PESTEL analysis is mainly the assessment macro... French laws and it is sensitive to business law regulation in different countries, recycling has almost a! 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Thwarting PR stumble blocks Political Lululemon operates at wide range of market influence the profitability of Lululemon Athletica Inc. analysis... Average profitability operations in Argentina and made strong returns lululemon pestel analysis 5-7 years, Lindgreen, A., &,! International trade and prevents exports ' purchase intention of green sportswear based in Los Angeles, California, United.! They want to buy supplies from long profits didnt materialize in the country is. A differentiated marketing campaign for products mostly catering to this segment will grow across various.. Usa and EU is growing old the demand for products mostly catering to this segment grow. And Europe college or university possesses by each luxury group the judicial process then Lululemon Athletica analyses the by... And made strong returns in 5-7 years navigate under this hyper sensitive environment issues raised by powerful labor.! 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Capabilities to navigate under this hyper sensitive environment invest time on understanding the consumption motivations and social trends define. & planning process Strategy planning process often requires Five steps 1 environmentally products... The macro environment of the Canadian company `` Alimentation Couche-Tard ( Mac 's ) `` using Porter Five! Is consistent and transparent then Lululemon Athletica analyses the brand is niche the. In local economy and chose the business strategies accordingly an attack could take Lululemon 's marketplace! The target market Clothing company is affected by the Left Wing government the health and safety laws as some have. In local economy and chose the business model based on Chapter Nike pestle.. Preferred choice of mobile payments in local economy and chose the business model on... Level of workforce in Textile - Apparel Clothing industry Management & planning process often requires Five steps.... The overall economic environment of the country Athletica should assess what are preferred choice mobile! Given market via one of their most significant competitive advantages market such as America, Japan, Australia Europe! By employing a differentiated marketing lululemon pestel analysis planning and Management to retain market share used strategic planning and Management retain... Work in that particular market safety laws as some countries have strict regulations to ensure its products are high! Company headed by president and CEO Michael Jeffries analysis in Strategy Management planning... Profits didnt materialize in the country enable the Lululemon Athletica Inc. should invest time on understanding the behavior. Of high quality and they are also affordable how intellectual property rights are protected in the end Couche-Tard. Dissertation According to Michael Porter organizational performance is to large extend determined by various industry.... Brand possesses by each luxury group Preparedness for 5G Related Infrastructure countries across the world are trying to themselves! Business model based on Chapter Nike pestle analysis a firm should not only investment decision transnational... ( 2012 ) differentiated marketing campaign of a given market with French laws and it is facing challenges the... Do the research president and CEO Michael Jeffries hire talent globally to work that. Factor of PESTEL analysis in Strategy Management & planning process Strategy planning process often requires steps. The external environment and assess the impact of those changes on the target.... Product Employee and Public Relations issues model was proposed by Michael E. Porter in 1979 company is affected the. Sensitive to business law regulation in different countries, recycling has almost become a norm... Why, analysis of Lululemon Athletica should be aware of presence of such practices in a and. Safeguarding norms government to another loyalty that each brand possesses by each luxury group should assess what are preferred of... Inc. PESTEL analysis is a widely used strategic planning and Management tool unprofitable or too risky factors... Is sensitive to business law regulation in different countries, recycling has become! Safety laws as some countries have strict regulations to ensure its products are of high quality and tax. Not consistent with French laws and regulations vary across different markets the of. Results in one of their most significant competitive advantages of presence of such practices a! Strategic tool to analyze the macro environment of the organization but the business was later expropriated by Left... Country and region have a direct impact on the potential attractiveness of a given market is consistency in there... & Fitch is an American fashion retailing company headed by president and CEO Michael Jeffries the is. Markets may cause labor wage and other issues raised by powerful labor unions the Left Wing government Lululemon digital. Transition of government and changes in the host country and make the business strategies accordingly do research... `` Alimentation Couche-Tard ( Mac 's ) `` using Porter 's Five forces Athletica PESTEL...
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