The report analyzes both external and internal factors that are expected to affect the business positively or negatively, providing decision-makers with a clear futuristic view of the industry. Research and development activities are highly important in an environment characterized by creative disruption. 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 should have capabilities to navigate under this hyper sensitive environment. However, when there is political chaos, it deters the investors and harms the stakeholders' trust in economic and consequent organizational performance. Many countries have placed strict norms to protect their urban areas through effective waste management. Porter Five Forces - Per Capita and National Carbon Emission What is the per capita carbon emission of the country and what is the overall level of carbon emissions of the country. Currently, Lululemon Athletica Inc. is present in different countries, each having own political tensions. Pestel Analysis And Pest Analysis: American Apparel 2014 Words | 9 Pages. - Employment Laws What are the employment laws in the country and are they consistent with the business model of Lululemon Athletica. Anti-trust law in Textile - Apparel Clothing industry and overall in the country. - Societal Norms and Hierarchy What sort of hierarchy and norms are acceptable in society also influence the types and level of consumption in a society. 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). Industrial safety regulations in the Consumer Goods sector. Infrastructure quality in Textile - Apparel Clothing industry. In some societies, consuming the offered product is considered a status symbol, while, some people use the same products for functional aspects. We are here to help. Businesses tried to come together, but it didnt always work. A framework for PEST analysis based on fuzzy decision maps. - 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. WebEnvironmental forces could disrupt Lululemon directly or via one of its key suppliers. WebThe PESTEL Analysis of Lululemon Athletica Inc - Moving Forward With Humility will take into account the most important aspects of the external environment that impact the business. Type of economic system in countries of operation what type of economic system there is and how stable it is. Technological innovations like this can bring major transformations in the industry and reset the success rules for market players. The late 1800s was an important time for America in business and industry. Social factors that leadership of Lululemon Athletica Inc. should analyze for PESTEL analysis are -, Technology is fast disrupting various industries across the board. Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. Changes in macro environment forces can impact the Porter Five Forces & industry attractiveness. Entering in markets where technological advancement has not reached the maturity means Lululemon Athletica Inc. can increase the market share by focusing on emerging technological innovations. Article continues after ad If the process is consistent and transparent then Lululemon Athletica can plan ahead with greater conviction. Level of corruption - especially levels of regulation in Consumer Goods sector. Political WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. 1. 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. 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. (2015). that shape strategy and competitive landscape. 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. Dissertation Political stability and importance of Textile - Apparel Clothing sector in the country's economy. (2017). Growing economies offer wide-ranging growth opportunities to the Lululemon Athletica Inc. But the business was later expropriated by the Left Wing government. 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. It must look at regulations and law in each of countries that they operate in. Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnr, P. (2011). The high fluctuation on local currency can be a cause of serious concern for Lululemon Athletica Inc. All the regulations about design patent need to be monitored by company. 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 Essay Writing ExpertsUS Essay Experts. Secondly governments from all parties adhere to the treaties made by the previous governments. Abercrombie & Fitch is an American fashion retailing company headed by president and CEO Michael Jeffries. The business practices of the Lululemon Athletica Inc. are influenced by the prevailing economic structure. Hou, J., Lu, Q., & Han, Y. Similarly, it is important to understand the industry lifecycle stage. Moreover, there are laws to set the maximum price, ensure a certain quality standard and protect consumers from fraudulent marketing claims. 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. For instance, extreme weather conditions can increase the cost of operations and compel the Lululemon Athletica Inc. to make the value chain more flexible. Dollarama realises that consumers will stand for higher prices on their items so Dollarama has been steadily increasing its prices to keep profits high and as of now this isnt a concern for Dollarama but if they raise the prices of their items too high then it will detract consumers from the product because they can vote with their feet and choose to shop at Dollaramas competitors instead. - Acceptance of Mobile Payments and Fintech Services One of the areas where US are lacking behind China is Mobile Payments. IGI Global. - Level of Consumer Activism Regarding Environmental Concerns Lululemon Athletica needs to know the level of consumer activism regarding environmental concerns is. Out of which, the net income of the sportswear The demand and supply of labor determine the wage rates and supply of skilled workforce. 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. Check your email Further, the same PESTEL factors would also be, included in evaluating future prospects and risk that company might face in the future and. MarketLine. Lastly, Lululemon Athletica Inc. should study the consumers leisure interests and should focus more on enhancing the customer experience if customers prefer experiential products over traditional product offerings. Lululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. Frequent changes in government policies harm business performance by increasing environmental uncertainty. - 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. Amazing Business Data Maps. Lululemon Athletica Inc. should also carefully analyze the availability of skilled human capital as a shortage of skilled labor can affect business efficiency and make talent attraction and retention more challenging. Seifert, C. & Chattaraman, V. (2017). We make beautiful, dynamic charts, heatmaps, co-relation plots, 3D plots & more. It can lead to uncertainty and suppression of consumption in both short term and long term. Changes in the macro-environment factors can have a direct impact on not only the Lululemon Athletica Inc. but also can impact other players in the Textile - Apparel Clothing. It is sensitive to business law regulation in different countries, and they tax regulation. Dollarama competes with other stores like dollar tree, which have a similar approach to Dollarama by having prices at approximately $1.25. 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. USA has avoided the European Union style stagnant economy on the back of slightly higher birth rate and higher level of immigration. Political environment and other factors not only impact the cost of doing business but also long term sustainability. 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. Government intervention in the free market and related Consumer Goods. The presence at international stage increases the companys sensitivity to changes in political environments of different countries. High GDP also signals the consumers ability to spend more on offered products. Bertels, H. M., Koen, P. A, & Elsum, I. WebPESTLE analysis : Is a shortcut of six words which is political , Economic , Social , Technological , Legal and Environmental .Usually this concept used in marketing .Also it The organization may also study the industry specific taxation policies to understand the host government's priorities and interest in developing industries. If Lululemon Athletica Inc. decides to enter in markets with the corrupt economic, political system, it will threaten the organization's sustainable development by destabilizing the society, harming justice system and endangering the rule of law. PESTLE analysis Political Lululemon operates at wide range of market. Following technological factors can influence the business performance of Lululemon Athletica Inc.: The development of information and communication technologies has led towards the adoption of innovative marketing techniques to enhance collaboration with customers. Economic The PESTEL analysis model supports strategic management by identifying the external factors that present opportunities or threats, based on the remote or macro-environment of the fast-food business, pertaining to the political, economic, sociocultural, technological, legal, and ecological factors (the PESTLE factors). If the legal system is not strong then Lululemon Athletica can face numerous challenges from consumer petitions to shakedowns from authorities. WebSociological Analysis Of Lululemon 191 Words | 1 Pages. 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. The consumers of Lululemons products are endowed with high bargaining power because the switching costs are relatively low. 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. This is due to brand loyalty that each brand possesses by each luxury group. Furthermore, A&F currently operates four other brands, which are: A&F, Abercrombie Kids, Hollister Company, and RUEHL. The business and marketing strategies are also influenced by migration. A critical study on Various Frameworks used to analyses International Business and its Environment. The organization should also carefully consider the interest rate and its influence on borrowing ability and attitude towards investment. A., & Gomez, o. This strategy ensures that consumers do not capitalize on the low switching costs. Academic writing has no room for errors and mistakes. We're here to answer any questions you have about our services. 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. - Government Spending As mentioned in the political factors, government of the country is running deficit budgets. Each society has distinctive norms and values that play an important role in shaping consumer behavior. (adsbygoogle = window.adsbygoogle || []).push({}); PESTEL analysis provides great detail about operating challenges Lululemon Athletica Inc. will face in prevalent macro environment other than competitive forces. - 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. Copyright 2023 IPL.org All rights reserved. Info: 1099 words (4 pages) PESTEL Example WebIntroduction to PESTEL Analysis PESTEL Analysis / PEST / STEP Analysis for Lululemon Athletica (United States) At Oak Spring University we have updated the Lululemon Athletica PESTEL Analysis is light of emerging geo strategic and geo-political factors such as Russia Ukraine war, tensions between China & Taiwan, chances of : A comparative content analysis of mainstream yoga lifestyle magazine covers. . Lululemon Athletica Inc. need to study data protection regulations to protect the customer data. Also, it can ensure the quality of the products. - Gender Composition in Labor Market Lululemon Athletica can use gender composition of labor market to understand the level of liberal nature of the society, women rights, and womens say in matter of societal issues and consumption decisions. - Adherence to Common Law Is the country following common law which is uniform for all parties whether domestic or international. Taxi industry is now dominated by players like Uber and Lyft. Investors, managers, creditors and others need to analyze various aspects of financial statements so they can invest, manage and do business more effectively with the particular company. (2009). As such, the brand is niche in the market leading to rivalry of the competitors in this industry to. 4. 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. Finally, the exchange rate fluctuation can also influence the profitability and international trade. The data protection has become an important issue due to consumers privacy and security concerns. The brands set different prices of its product base on design, size and heritage. The high interest rate will encourage the attitude towards investment and increase growth opportunities for Lululemon Athletica Inc. It can enable Lululemon Athletica to hire skilled workforce at competitive salaries. (2008, December). - Birth Rate Birth rate is also a good indicator of future demand. Organizational culture derives strong influence from the societal norms, values and trends. Lululemon Athletica Inc. cannot enter a new market without studying in detail the legal environment and regulatory structure of the new consumer market. Slow speed will give more time while fast speed of technological disruption may give a firm little time to cope and be profitable. - 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. 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 achieve success in such a dynamic apparel stores industry across various countries is to diversify the systematic risks of political environment. Technological trends can be used to start the creative social media campaigns for developing online brand communities. we specialize at providing professional PESTEL analysis & other strategic management MBA resources. In some countries, recycling has almost become a business norm. Changes in weather and climatic conditions can influence business efficiency. Disclaimer: This work was produced by one of our academic writers to help university students with their studies. WebPESTEL Analysis Resources BusinessTeacher.org provide free business resources and online learning tools, perfect for helping students and professionals to develop their Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. - Unrest within the Country & Chances of Civil Unrest We dont think that Lululemon Athletica business operations are facing any dangers from any kind of civil unrest or internal militant operations in the country. Lululemon Athletica Inc. should consider the following legal factors when exploring a new market. Canadian government introducing Workplace Fitness Program Policy, and many other countries that Lululemon operate have also such policies. Feel free to connect with us if you need business research. 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