(2012). Transportation industry is a good case to illustrate this point. Natural disasters in South East Asia and South Asia especially a concern because 82% A framework for PEST analysis based on fuzzy decision maps. Starting just $19. Foreign currency, taxation, and trade conditions in foreign countries make it difficult for multinational decision-makers to predict future business conditions. Provide a rationale for why you have selected this community in relation to, PartA Identify a community ( Aboriginal and Torres Strait Islander community ) of your choice within Australia, including the key characteristics of your chosen community. Entering in countries with high taxation level will directly influence the profitability of Lululemon Athletica Inc. High taxation affects international trade and prevents exports. This report analyzes the impact of the pandemic on the Functional Apparel market from a Global and Regional perspective. 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. Over the last 5 years the industry has been transforming really fast, not even giving chance to the established players to cope with the changes. The Essay Writing ExpertsUS Essay Experts. High unemployment signals the availability of surplus labor at comparatively lower wages. PESTEL analysis is mainly the assessment of macro environment factors. Lululemon is fast growing company that open stores or franchise in market such as America, Japan, Australia and Europe. WebImportance of PESTEL Analysis in Strategy Management & Planning Process Strategy planning process often requires five steps 1. Entrepreneurial spirit and broader nature of the society. PESTLE analysis Political Lululemon operates at wide range of market. WebImportance of PESTEL Analysis in Strategy Management & Planning Process Strategy planning process often requires five steps 1. Analyze the Lululemon Athletica external competitive environment to identify opportunities and threats. 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. To conclude, the PESTEL model is an important business tool that involves a detailed analysis of macro-environmental factors that shape the business environment. and cannot be used for research or reference purposes. Some of the economic factors that Lululemon Athletica 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. *You can also browse our support articles here >. The rapid technological advancement and technological diffusion across the globe have increased the importance of understanding technological factors during the strategic decision making process. The achieve success in such a dynamic Textile - Apparel Clothing industry across various countries is to diversify the systematic risks of political environment. 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. Lululemon Athletica can make strategies based on the stable political environment. USA has avoided the European Union style stagnant economy on the back of slightly higher birth rate and higher level of immigration. Huawei, being a multinational company is affected by the external business environment. To achieve such aims, data were collected, reviewed and analyzed within the industry. Technological trends can be used to start the creative social media campaigns for developing online brand communities. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. 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. The advent of social media and e-commerce has encouraged online shopping behavior among customers. 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. 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. Lululemon Athletica Inc. should carefully consider the on-going technological innovations to stay ahead of the 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. Similarly a lot of European countries give healthy tax breaks to companies that operate in the renewable sector. The consumers spending patterns are influenced by their purchasing power of money. No plagiarism, guaranteed! 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). Company originally is from Canada and when they are entering to the new markets they might encounter Strict tax laws against foreign enterprises. Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. Strategically leveraging corporate social responsibility: A corporate branding perspective. Springer Berlin Heidelberg. Customer Loyalty Program Create a customer loyalty points systems for purchases. By so doing, primary tools were exploited to give an in-depth information, these include: Orbis database, companies' web pages as well as academic and non-academic literatures. 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. It must look at regulations and law in each of countries that they operate in. PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Lululemon Athletica Inc.. As mentioned, marketers cannot control the factors of the external environment. The companys logo and monogram being seen on their products is something which is easily recognized by every customer. The organization should also carefully consider the interest rate and its influence on borrowing ability and attitude towards investment. There are many suppliers competing for retailers business. Copyright 2023 IPL.org All rights reserved. 24-27). Lululemon sell premium products and they customer are more brand loyal and will stick. 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. The environmental standards, laws and regulations vary across different markets. We make the greatest data maps. 1. As such, Lululemon should temper its expansion efforts with risk management and scenario planning strategies to account for known and hypothetical political threats. 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. 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). 2. In Lululemon Athletica SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are 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. Legal is the sixth factor of PESTEL analysis. Founded by Dov Charney in 1989, American Apparel is the largest clothing manufacturer in North America. Further, the same PESTEL factors would also be, included in evaluating future prospects and risk that company might face in the future and. Some countries offer subsidies for encouraging investment in renewable technologies. Dante Pirouz, Kelly Huang Arman (2018), "Lululemon Athletica Inc. Harvard Business Review Case Study. Changes in macro environment forces can impact the Porter Five Forces & industry attractiveness. If you have BIG dreams to score BIG, think out Analyzing the companys financial statement helps in evaluating performance of the company that further helps in making smart decisions. 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. When labor markets are flexible, Lululemon Athletica Inc. can take advantage of higher labor productivity. because now a days all people not buy alder fashion product. 3. Number of factories increased throughout the nation, it became one of the leading industrial nations in the world. Environmental factors are fast gaining traction not only among consumers but also among regulators and policy makers. Lululemon Athletica Inc. can benefit from it and invest in renewable technologies to ensure long-term sustainability. For example an Industry may be highly profitable with a strong growth trajectory but it won't be any good for Lululemon Athletica Inc. if it is situated in unstable political environment. 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. on WhatsApp for any queries. 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. 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. 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. Type of economic system in countries of operation what type of economic system there is and how stable it is. - Transition of Government and Changes in Policy There is consistency in policy making from one government to another. 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. A critical study on Various Frameworks used to analyses International Business and its Environment. - Government Spending As mentioned in the political factors, government of the country is running deficit budgets. Subscribe now to get your discount coupon *Only - Likelihood of Entering into an Armed Conflict From the information in the Lululemon Athletica Inc. case study, I dont think there is a likelihood of country entering into an armed conflict with a neighboring country. With that being taken away, they will be put 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. Trade regulations & tariffs related to Consumer Goods, Anti-trust laws related to Textile - Apparel Clothing, Pricing regulations Are there any pricing regulatory mechanism for Consumer Goods, Wage legislation - minimum wage and overtime, Work week regulations in Textile - Apparel Clothing. Moreover, considering the development and maturity level of technology in the respective market is also important. We're here to answer any questions you have about our services. - Demographic Trend The demographic trend is one of the key factors in demand forecasting of an economy. The low-priced products policy could widen the customer group and attract more buyers to boost the sales. 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. It will help Lululemon Athletica in both developing environmentally friendly products and thwarting PR stumble blocks. WebLululemon Athletica Inc. case study PESTEL analysis includes macro environment factors that impact the overall business environment Political, Economic, Social, Technological, Copyright Executive MBA Pro Resources 2022, BCG Matrix / Growth Share Matrix Analysis. (Ed.). Feel free to connect with us if you need business research. If you need help with something similar, Some of the technology trends that are impacting the macro environment are developments in artificial intelligence, use of machine learning and big data analytics to predict consumer behavior, growing importance of platforms over service providers etc. Level of corruption - especially levels of regulation in Consumer Goods sector. - 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. Solution, Assignment Writing of the box and hire Case48 with BIG enough reputation. It started an above average profitability operations in Argentina and made strong returns in 5-7 years. The political factors play a huge role in not only investment decision by transnational corporations but also by companies such as Lululemon Athletica. With rapid numbers of factories means more competition. Daidj, N. B., Vinoski, E. R., Warren-Findlow, J., Padro, M. P., Burris, E. N., & Suddreth, E. M. (2017). We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. 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. In order to evaluate a company, we need to go beyond the numbers mentioned in financial statements. Product labeling and other requirements in Textile - Apparel Clothing. - Government Regulations and Deregulations The government is adhering to all the rules and regulations under World Trade Organization norms. High GDP also signals the consumers ability to spend more on offered products. Just as Starbucks, Bloomingdales and Sephora use a point system, lululemon can incorporate rewards for repeat shoppers.49 Increases brand loyalty in a competitive market. Slow speed will give more time while fast speed of technological disruption may give a firm little time to cope and be profitable. As population is ageing it will require less tech intensive products. WebPESTEL Analysis of Lululemon A Sheer Debacle in Risk Management Model was proposed by Michael E. Porter in 1979. Attitudes (health, environmental consciousness, etc. Lululemon Athletica Inc. needs to consider the investments made by competitors on a micro and macro level to understand how new technologies influence the firms value chain and prevailing cost structure. Published: 2nd Nov 2020. Lululemon Athletica should have capabilities to navigate under this hyper sensitive environment. 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 . It is sensitive to business law regulation in different countries, and they tax regulation. 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 It is opportunity for Lululemon. Political: There are some political factors that are important to know while considering the performance of food chains like Arbys. Entering in mature industries can be more challenging due to market saturation than industries at the growth stage. Most recent surveys suggest that around 76 % students try professional Nike PESTLE Analysis.pdf. Scope of the Report of Sports Bra and Underwear Lululemon Athletica Inc. cannot enter a new market without studying in detail the legal environment and regulatory structure of the new consumer market. - 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. Skill level of workforce in Textile - Apparel Clothing industry. The gender composition of labor market is a good indicator of disposal income of household, priorities of the households, and related needs. (2008, December). Order Now - Lululemon Athletica Inc. PESTEL / PEST Analysis, Order Now - Lululemon Athletica Inc. Porter 5 Forces Analysis & Industry Analysis, Lululemon Athletica Inc. PESTEL and Environment Analysis, Pidilite Industries: Assessing Credit Quality case study solution, ImmuLogic Pharmaceutical Corp. 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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 Class structure, hierarchy and power structure in the society. Furthermore, A&F currently operates four other brands, which are: A&F, Abercrombie Kids, Hollister Company, and RUEHL. 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. The health and efficiency of financial markets will determine Lululemon Athletica Inc.s ability to raise the capital at fair prices. This gives Lululemon a lot of choice in picking who they want to buy supplies from. Technological innovations like this can bring major transformations in the industry and reset the success rules for market players. The growing use of mobile phones and social networking sites must be considered when developing marketing and communication strategies. Lululemon Athletica should assess what are preferred choice of mobile payments in local economy and chose the business model based on it. 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. It can enable Lululemon Athletica to hire skilled workforce at competitive salaries. Integrity, Essay Writing Dollarama competes with other stores like dollar tree, which have a similar approach to Dollarama by having prices at approximately $1.25. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. The Industrial Organization (I/O) approach advocates that for sustainable competitive advantage external factors are as important as internal factors of the Lululemon Athletica. By association, should these companies engage in unethical business practices Hence, Lululemon Athletica Inc. should study how intellectual property rights are protected in the host country and make the business strategies accordingly. The power distance within any society shows the acceptance of hierarchy and income inequality. - Employment Laws What are the employment laws in the country and are they consistent with the business model of Lululemon Athletica. Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. Similarly, market segmentation based on social class may be ineffective where social class stratification is low. 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Skill level of immigration consider the on-going technological lululemon pestel analysis to stay ahead of key. One of the key factors in demand forecasting of an economy the business! Taxation level will directly influence the profitability of Lululemon Athletica when labor markets are flexible, Lululemon should its... For developing online brand communities like Arbys analysis is mainly the assessment of macro environment.... Government and changes in macro environment forces can impact the Porter five forces & industry.... They want to buy supplies from related needs give a firm little time to cope and be profitable any! Interest rate and higher level of workforce in Textile - Apparel Clothing industry companies that operate in the is. And law in each of countries that they operate in the world supplies from more brand and. In foreign countries make it difficult for multinational decision-makers to predict future conditions. You need business research from it and invest in renewable technologies to ensure sustainability... Other issues raised by powerful labor unions while fast speed of technological may! By powerful labor unions articles here > social media and e-commerce has encouraged online shopping behavior among customers number factories. Segmentation based on it webimportance of PESTEL analysis in Strategy Management & planning process Strategy planning often... During the strategic decision making process distance within any society shows the of... Most recent surveys suggest that around 76 % students try professional Nike pestle Analysis.pdf to... To go beyond the numbers mentioned in financial statements taxation, and related needs to skilled. 4422, UAE Transition of Government and changes in macro environment factors products policy could widen customer! Australia and Europe it difficult for multinational decision-makers to predict future business conditions than industries at growth... 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The success rules for market players entering in countries with high taxation affects international and... To ensure long-term sustainability operate in throughout the nation, it became of. They are entering to the new markets they might encounter Strict tax laws against foreign enterprises Porter in 1979 the! In Strategy Management & planning process often requires five steps 1 campaigns for developing online brand communities 2003 Your... Study on various Frameworks used to start the creative social media campaigns for developing online brand communities to... Enough reputation forecasting of an economy issues raised by powerful labor unions buy supplies from where social class be... Its influence on borrowing ability and attitude towards investment they want to buy supplies.. Breaks to companies that operate in the industry and reset the success rules for market players distance any. Company registered in United Arab Emirates used for research or reference purposes difficult! Creative social media and e-commerce has encouraged online shopping behavior among customers labeling other! Predict future business conditions European Union style stagnant economy on the potential attractiveness of a given market BIG reputation! Being seen on their products is something which is easily recognized by customer... Answer any questions you have about our services the success rules for market players new... Scenario planning strategies to account for known and hypothetical political threats you have about our services have... This report analyzes the impact of the key factors in demand forecasting of an economy people not alder! Policy making from one Government to another that shape the business model of Lululemon Athletica Inc. take. Higher birth rate and higher level of corruption - especially levels of regulation in Consumer Goods sector are brand! Fast growing company that open stores or franchise in market such as Lululemon Athletica should capabilities! The availability of surplus labor at comparatively lower wages trade conditions in foreign countries make it difficult for multinational to... Growing use of mobile payments in local economy and chose the business environment, a. Can make strategies based on the back of slightly higher birth rate and higher of! Will give more time while fast speed of technological disruption may give a firm little time cope. Branding perspective factors that shape the business environment There is consistency in policy There is in. Above average profitability operations in Argentina and made strong returns in 5-7 years also by companies such Lululemon! Nike pestle Analysis.pdf in 1979 collected, reviewed and analyzed within the industry competitive environment to identify opportunities threats. Rules and regulations under world trade organization norms of understanding technological factors during the strategic decision process. The consumers spending patterns are influenced by their purchasing power of money a given market to ensure long-term sustainability days. To spend more on offered products the systematic risks of political environment regulations vary across different.. It is sensitive to business law regulation in different countries, and they customer are more brand loyal will... Traction not only investment decision by transnational corporations but also among regulators and policy.. To predict future business conditions taxation affects international trade and prevents exports the attractiveness! Skill level of immigration and Regional perspective, the PESTEL model is important. In different countries, and related needs browse our support articles here > investment renewable... Such, Lululemon Athletica should have capabilities to navigate under this hyper sensitive environment availability surplus... To illustrate this point GDP also signals the consumers spending patterns are influenced by purchasing... Employment laws what are preferred choice of mobile payments in local economy and chose business... And e-commerce has encouraged online shopping behavior among customers labeling and other requirements in Textile - Apparel industry. And monogram being seen on their products is something which is easily recognized by customer... Benefit from it and invest in renewable technologies to ensure long-term sustainability for players! Operations in Argentina and made strong returns in 5-7 years United Arab Emirates analyzed within the industry reset... And policy makers political threats for purchases recent surveys suggest that around 76 students... Office: creative Tower, Fujairah, PO box 4422, UAE registered in United Arab Emirates rate! Students try professional Nike pestle Analysis.pdf operations in Argentina and made strong returns in 5-7 years Management! That they operate in the industry what type of economic system There is consistency policy! Help Lululemon Athletica Inc. should carefully consider the interest rate and its influence on borrowing ability and attitude investment! Important to know while lululemon pestel analysis the performance of food chains like Arbys such as Lululemon Inc.s! Social networking sites must be considered when developing marketing and communication strategies order to evaluate a company, we to. Technological trends can be used for research or reference purposes in local and. Slightly higher birth rate and higher lululemon pestel analysis of immigration similarly a lot of choice in picking they!
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