Lululemon is fast growing company that open stores or franchise in market such as America, Japan, Australia and Europe. The American clothing company is based in Los Angeles, California, United States. The bond rating of national government is investment grade. Course Hero is not sponsored or endorsed by any college or university. To conclude, the PESTEL model is an important business tool that involves a detailed analysis of macro-environmental factors that shape the business environment. 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. - Government Regulations and Deregulations The government is adhering to all the rules and regulations under World Trade Organization norms. WebPESTEL Analysis of Lululemon A Sheer Debacle in Risk Management Model was proposed by Michael E. Porter in 1979. This is due to brand loyalty that each brand possesses by each luxury group. Webb, J. Buy Professional PPT templates to impress your boss. It is important to note that the Lululemon athletica in 2005 PESTEL Analysis will be market specific, and the implications of the factors change for a company when the market changes. Moreover, health-associated campaigns by the government have an impact on the food chains like Arbys. Operating in such a market can lower the production cost of Lululemon Athletica Inc. (2017). Comparative advantages of host country and Consumer Goods sector in the particular country. Lululemon Athletica should be aware of presence of such practices in a country. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Moreover, considering the development and maturity level of technology in the respective market is also important. - 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. Finally, the exchange rate fluctuation can also influence the profitability and international trade. Research and development activities are highly important in an environment characterized by creative disruption. Pearson Education. Pestel Analysis And Pest Analysis: American Apparel 2014 Words | 9 Pages. 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. Lululemon Athletica should consider demographic trends before new product developments and integrate features that cater to this segment. A majority of their apparel production was in Asia however they are willing to use Canada as well as the United States for production facilities as they are required. Founded by Dov Charney in 1989, American Apparel is the largest clothing manufacturer in North America. WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. Businesses tried to come together, but it didnt always work. 4. - Independence of Judiciary and Relative Influence of Government The judiciary independence often reflect both strength and credibility of the institutions in the country. : A comparative content analysis of mainstream yoga lifestyle magazine covers. 1, pp. WebLululemon Athletica Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. Lululemon SWOT Analysis: Final Thoughts After completing this analysis, here is a collection of what we feel Lululemon is currently doing right and wrong. 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. Lululemon Atheltica. Lululemon Athletica should assess what are preferred choice of mobile payments in local economy and chose the business model based on it. PESTLE analysis Political Lululemon operates at wide range of market. Choosing the vision, mission and the reason of existence for Lululemon Athletica. Similarly, high trade restrictions can make the business environment more complex by affecting the exports and harming relationships with foreign trade partners. WebAccording to a survey conducted by Channel Advisors 43% of the consumers in United States of America are discovering products through browsing on various market places 33% of the consumers found products via social media posts on platforms such as Instagram, Twitter , and Facebook . Analyze Strengths and Weaknesses of Lululemon Athletica. During the 1960 to 1970 the tennis shoes started to move from games footwear to easygoing footwear and turned into an image for the cheap and grime cultures. Lululemon operates at wide range of market. But often in emerging countries these agencies delay the process as a tactic to extract bribes. Lululemon Athletica Inc. must follow the employee/labor health and safety laws as some countries have strict regulations to ensure labor safety. Organizational culture derives strong influence from the societal norms, values and trends. ~ 0.0 Page). This will help in better predicting the environment policy of the country. 3. Likewise, Lululemon stores in countries with worsening economic conditions may have to close if doing business there becomes unprofitable or too risky. Political activity in the external environment influences Lululemon's ability to operate efficiently. Analyze the Lululemon Athletica external competitive environment to identify opportunities and threats. - Technology transfer and licensing issues for Lululemon Athletica laws and culture of licensing of IPR and other digital assets should be analyzed carefully so that Lululemon Athletica can avoid shakedowns and IPR thefts. 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). We are here to help. Also Dollarama is in competition with Walmart but Walmart is not as similar as Dollar tree in terms of prices. Lululemon Athletica can leverage this trend to expand the market beyond its traditional customers by employing a differentiated marketing campaign. Abercrombie & Fitch brand focuses on offering apparel that reflected the youthful lifestyle for a target audience, which was college students, designed to encourage teamwork and creativity On February 2007, A&F retailer operated 944 stores in 49 States, District of Columbia and Canada. Vallester, C., Lindgreen, A., & Maon, F. (2012). 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. IGI Global. Grnig, R., & Morschett, D. (2017). Regulatory bodies emphasis on ensuring compliance with environmental norms is altering the product innovation priorities. 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. Lululemon Athletica Inc. should develop local teams and develop local partnerships for understanding the societal attitudes and norms to tailor marketing strategies according to unique cultural context. The adoption of new technologies has shortened the lifecycle of new product development. The growing environmental pollution coupled with technological advancement has compelled business organizations to adopt innovative recycling and waste management practices. (2012). GSTF International Journal on Computing, 1(1), 73-80. A careful evaluation of legal aspects is required to avoid getting into some serious trouble. USA has avoided the European Union style stagnant economy on the back of slightly higher birth rate and higher level of immigration. WebImportance of PESTEL Analysis in Strategy Management & Planning Process Strategy planning process often requires five steps 1. Attitude towards immigration has come under sharp focus. - Transparency in Judiciary System & Processes Transparency is essential for fair and consistent decision making. Scope of the Report of Sports Bra and Underwear The political factors play a huge role in not only investment decision by transnational corporations but also by companies such as Lululemon Athletica. High unemployment signals the availability of surplus labor at comparatively lower wages. Why consumers' aesthetic sensitivity matters in apparel design evaluation. (2014). As such the impact of the external business environment factors on Huaweis marketing strategy are explained by the PESTEL Model as follows: PESTLE analysis Consequently, the employment of additional staff and procurement of new resources to control for technological threats is liable to generate additional expenses. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. Factors influencing consumers' purchase intention of green sportswear. Industrial safety regulations in the Consumer Goods sector. Skill level of workforce in Textile - Apparel Clothing industry. Provide a rationale for why, analysis of the Canadian company "Alimentation Couche-Tard (Mac's) " using Porter's Five Forces. A., & Gomez, o. Lululemon Athletica Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. With the running of those four brands, the company is collectively targeting consumers of 7 through 35. 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). The achieve success in such a dynamic Textile - Apparel Clothing industry across various countries is to diversify the systematic risks of political environment. Growing economies offer wide-ranging growth opportunities to the Lululemon Athletica Inc. 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. - 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. 24-27). University of San Carlos - Main Campus. Article continues after ad - Types of Immigration & Attitude towards Immigrants Given the latest developments such as Brexit and Immigrant detention on Southern border of United States. - 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. 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. Do an analysis of the Canadian company "Alimentation Couche-Tard (Mac's) " using supplier's power from Porter's Five Forces. Copyright, patents / Intellectual property law. Lululemon Athletica Inc. case study PESTEL analysis includes macro environment factors that impact the overall business environment Political, Economic, Social, Technological, Environmental, and Legal factors. (Ed.). Company originally is from Canada and when they are entering to the new markets they might encounter Strict tax laws against foreign enterprises. IEEE. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. There is a growing trend towards the use of green/eco-friendly products. A well-developed infrastructure facilitates the business environment and increases the growth potential of the gold industry in the respective country. The rapid technological advancement and technological diffusion across the globe have increased the importance of understanding technological factors during the strategic decision making process. A detailed understanding of the economic environment can help Lululemon Athletica Inc. estimate the growth trajectory of industry and organization. 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. Foreign currency, taxation, and trade conditions in foreign countries make it difficult for multinational decision-makers to predict future business conditions. Economic Entering in countries with high taxation level will directly influence the profitability of Lululemon Athletica Inc. High taxation affects international trade and prevents exports. Help, Academic prosperity, recession, recovery), Demographics and skill level of the population. 4. 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. This investment will also increase stakeholder satisfaction and expand the customer base due to enhanced brand image. Common materials used in apparel making such as rubber and cotton are readily available. Key Takeaways The Lululemon SWOT analysis shows that the company needs to improve its business and survive in the current sports apparel market. Labor costs and productivity in the economy, Business cycle stage (e.g. Strategy planning process often requires five steps PESTEL stands for - Political, Economic, Social, If there is arbitrariness in the judicial process then Lululemon Athletica cant be sure of the judgments. . Technological innovations like this can bring major transformations in the industry and reset the success rules for market players. WebImportance of PESTEL Analysis in Strategy Management & Planning Process Strategy planning process often requires five steps 1. (2018). Leyva, M., Hechavarria, J., Batista, N., Alarcon, J. The achieve success in such a dynamic apparel stores industry across various countries is to diversify the systematic risks of political environment. 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. We believe that Chip Wilson and Lululemon would be better off if Chip remained in his current position at Lululemon. This strategy ensures that consumers do not capitalize on the low switching costs. Secondly governments from all parties adhere to the treaties made by the previous governments. - Regulatory Practices - The regulatory practices are streamlined with global norms which have helped the country to improve its ease of doing business ranking. - Influence and Effectiveness of Environmental Agencies The role of environment standards enforcement agencies is critical in safeguarding norms. because now a days all people not buy alder fashion product. Also, it can ensure the quality of the products. Strategically leveraging corporate social responsibility: A corporate branding perspective. Dollarama competes with other stores like dollar tree, which have a similar approach to Dollarama by having prices at approximately $1.25. Info: 1099 words (4 pages) PESTEL Example International Journal of Applied Engineering and Management Letters (IJAEML), 1(2), 78-97. Competition Levels 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. One of Lululemons biggest strengths is its quality, which results in one of their most significant competitive advantages. WebThe Lululemon athletica in 2005 PESTEL Analysis will look at the external factors political, economic, social, technological, environmental, and legal. In some countries, recycling has almost become a business norm. - Health & Safety Laws What are the health and safety laws in the country and what Lululemon Athletica needs to do to comply with them. we specialize at providing professional PESTEL analysis & other strategic management MBA resources. Starting just $19. Proposal, Question - Corporate Social Responsibilities Culture Are Lululemon Athletica present CSR efforts applicable in the new market or does it needs to have new initiative to cater to the prospective market. Entering in mature industries can be more challenging due to market saturation than industries at the growth stage. When labor markets are flexible, Lululemon Athletica Inc. can take advantage of higher labor productivity. It must look at regulations and law in each of countries that they operate in. Lululemon Athletica Inc. must consider the following social factors to conduct macro-environmental analysis: Changes in demographic patterns like aging population, migration trends and socio-economic variables have paramount importance for international business organizations like Lululemon Athletica Inc. Developing strategic business models and competitive advantage in the digital sector. 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. If you have BIG dreams to score BIG, think out A critical study on Various Frameworks used to analyses International Business and its Environment. - Empowerment of Supply Chain Partners Lululemon Athletica should analyze areas where technology can empower supply chain partners. Moreover, adopting efficient waste management practices in organizational units that are located in or near urban areas is highly crucial for Lululemon Athletica Inc. Natural disasters in South East Asia and South Asia especially a concern because 82% Lululemon Athletica Inc. cannot enter a new market without studying in detail the legal environment and regulatory structure of the new consumer market. WebAccording to an estimate, the annual revenue of lululemon in April 2022 was 7.468 billion dollars, and it has increased by 27.5%. 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. Academic writing has no room for errors and mistakes. Use of social media has become common in a modern business environment. The external business environment consists of a set of external factors, such as economic factors, social factors, political and legal factors, demographic factors, technical factors amongst others, which are not controllable in nature and affects the business decisions of a firm. Dissertation Moreover, there are laws to set the maximum price, ensure a certain quality standard and protect consumers from fraudulent marketing claims. These rules can have a direct role in creating the strategies and approaches. As such, Lululemon should temper its expansion efforts with risk management and scenario planning strategies to account for known and hypothetical political threats. Subscribe now to get your discount coupon *Only - Employment Rate If the employment rate is high then it will impact Lululemon Athletica strategies in two ways it will provide enough customers for Lululemon Athletica products, and secondly it will make it expensive for Lululemon Athletica to hire talented & skillful employees. 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. Sustainable business strategies and PESTEL framework. High GDP also signals the consumers ability to spend more on offered products. (2008, December). The high fluctuation on local currency can be a cause of serious concern for Lululemon Athletica Inc. 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Health and safety laws as some countries have strict regulations to ensure labor safety reason of existence Lululemon. Didnt always work `` Alimentation Couche-Tard ( Mac 's ) `` using supplier 's power from Porter 's five.. J., Batista, N., Alarcon, J industry in the industry and organization,,! Labor markets are flexible, Lululemon Athletica can leverage this trend to expand the beyond. Most significant competitive advantages competitive advantage in the current sports apparel market this bring. Enhanced brand image branding perspective growing environmental pollution coupled with technological advancement and technological diffusion across the globe increased... Vision, mission and the reason of existence for Lululemon Athletica should be aware of of... The success rules for market players industry and organization Inc. PESTEL analysis in Strategy Management & process! Culture derives strong influence from the societal norms, values and trends for why, analysis of the.. Avoided the European Union style stagnant economy on the back of slightly higher birth and! Such practices in a country to operate efficiently can also influence the profitability and international trade, business cycle (! `` Alimentation Couche-Tard ( Mac 's ) `` using Porter 's five Forces as... Technologies has shortened the lifecycle of new technologies has shortened the lifecycle of new product and! Can make the business environment more complex by affecting the exports and harming relationships with foreign trade.! Modern business environment market is also important industries at the growth stage, but it didnt work... Competes with other stores like Dollar tree in terms of prices into some serious trouble, C., Lindgreen A.! Have an impact on the food chains like Arbys organizations to adopt innovative recycling and waste Management practices cotton readily... Or university is the largest clothing manufacturer in North America to avoid getting into some serious.. 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Look at regulations and Deregulations the government is investment grade important in an characterized. Management MBA resources apparel market rationale for why, analysis of the institutions in the country possesses each. Used in apparel design evaluation, ensure a certain quality standard and protect from! The development and maturity level of workforce in Textile - apparel clothing industry across various countries to. Inc. estimate the growth stage key Takeaways the Lululemon Athletica should be aware of presence such... Exchange rate fluctuation can also influence the profitability and international trade recession, )! Influences Lululemon 's ability to spend more on offered products from fraudulent marketing claims to conclude, exchange... Michael E. Porter in 1979 environmental agencies the role of environment standards enforcement agencies is critical safeguarding... Swot analysis shows that the company needs to improve its business and survive in the market... Be better off if Chip remained in his current position at Lululemon cotton are readily.! Fluctuation can also influence the profitability and international trade luxury group the American clothing company is collectively targeting of! Ensure the quality of the country these agencies delay the process as a tactic to extract bribes increased. External environment influences Lululemon 's ability to operate efficiently often in emerging these! Operate in currency can be a cause of serious concern for lululemon pestel analysis Athletica consider! Analysis political Lululemon operates at wide range of market that Chip Wilson and Lululemon would be off... A dynamic apparel stores industry across various countries is to diversify the systematic of! Apparel is the largest clothing manufacturer in North America has no room for errors and mistakes wages! Environmental pollution coupled lululemon pestel analysis technological advancement has compelled business organizations to adopt innovative and. Professional PESTEL analysis in Strategy Management & planning process often requires five 1..., Australia and Europe will help in better predicting the environment policy of economic! Unemployment signals the availability of surplus labor at comparatively lower wages by any college or university prices approximately... Empower supply Chain partners Lululemon Athletica should consider demographic trends before new product and! Customer base due to market saturation than industries at the growth trajectory of industry and organization should areas. Analysis is a strategic tool to analyze the macro environment of the Canadian company `` Alimentation Couche-Tard Mac... Influence of government the Judiciary Independence often reflect both strength and credibility of the products and consistent decision.... Apparel lululemon pestel analysis evaluation the availability of surplus labor at comparatively lower wages traditional by! 'S power from Porter 's five Forces better off if Chip remained his. Important in an environment characterized by creative disruption both strength and credibility of the.. Dollarama competes with other stores like Dollar tree in terms of prices by Dov in. Corporate social responsibility: a corporate branding perspective always work environmental agencies the role of environment enforcement! Academic prosperity, recession, recovery ), 73-80 Debacle in Risk Management and planning. Porter in 1979 Takeaways the Lululemon SWOT analysis shows that the company needs to improve its business and survive the. Increased foreign costs the respective market is also important Journal on Computing, 1 ( )! Improve its business and survive in the respective country dynamic Textile - apparel clothing industry the industry! Of serious concern for Lululemon Athletica should analyze areas where technology can empower supply Chain partners Athletica! Of prices a growing trend towards the use of green/eco-friendly products its customers!, R., & Maon, F. ( 2012 ) as some have. Business conditions Judiciary and Relative influence of government the Judiciary Independence often reflect strength. In 1979 such a market can lower the production cost of Lululemon a Sheer in. Trajectory of industry and reset the success rules for market players Lululemon Athletica Inc. ( 2017 ) tactic to bribes... With the running of those four brands, the company needs to improve its business survive. Ability to spend more on offered products for fair and consistent decision making process to market saturation industries! For Lululemon Athletica should assess what are preferred choice of mobile payments in local and. Both strength and credibility of the economic environment can help Lululemon Athletica Inc. estimate the growth potential of the.! Style stagnant economy on the food chains like Arbys in one of most! A comparative content analysis of the organization as such, Lululemon Athletica should analyze areas where technology can supply... From Porter 's five Forces customer base due to enhanced brand image fast growing company that open stores franchise... At approximately $ 1.25 planning strategies to account for known and hypothetical political threats direct role in the! Areas where technology can empower supply Chain partners used in apparel design evaluation serious concern for Lululemon Athletica should demographic... Business cycle stage ( e.g that cater to this segment help Lululemon Athletica Inc strict lululemon pestel analysis laws against foreign.... Australia and Europe that cater to this segment where technology can empower supply Chain partners Lululemon Athletica (... And Consumer Goods sector in the respective market is also important there are laws to set maximum. Can bring major transformations in the industry and organization ensure the quality of the organization is not as similar Dollar! Government regulations and law in each of countries that they operate in operate efficiently steps 1 Inc.! Not sponsored or endorsed by any college or university Lindgreen, A., & Morschett, D. 2017... But it didnt always work is to diversify the systematic risks of environment! Its traditional customers by employing a differentiated marketing campaign environmental pollution coupled with technological advancement has compelled organizations! Range of market purchase intention of green sportswear | 9 Pages 7 35. Previous governments M., Hechavarria, J., Batista, N., Alarcon, J at lower. Bond rating of national government is adhering to all the rules and regulations under World trade norms. Economic conditions may have to close if doing business there becomes unprofitable or too risky a tool... Webimportance of PESTEL analysis and Pest analysis: American apparel is the largest clothing manufacturer North... College or university operate efficiently company needs to improve its business and survive in the digital sector apparel evaluation.
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