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. It is opportunity for Lululemon. It can lead to uncertainty and suppression of consumption in both short term and long term. Analyzing the companys financial statement helps in evaluating performance of the company that further helps in making smart decisions. In certain countries where Lululemon operates, political corruption could become a problem since there are fewer opportunities for recourse in the regions. According to Michael Porter organizational performance is to large extend determined by various industry forces. This report analyzes the impact of the pandemic on the Functional Apparel market from a Global and Regional perspective. As mentioned, marketers cannot control the factors of the external environment. WebPESTEL ANALYSIS PRESENTATION University Canada West ETHICS, CSR & BUSINESS ENVIRONMENT (BUSI 601) Lululemon Athletica Inc. Skill level of workforce in Textile - Apparel Clothing industry. If data breaches occur and experts determine Lululemon violated confidentiality or privacy laws through flaws in its information security protocols, it could face serious litigation and financial penalties. as they determine the overall economic environment of the country. International Journal of Applied Engineering and Management Letters (IJAEML), 1(2), 78-97. The growing environmental consciousness and changing climatic conditions have made environmental analysis an important part of the PESTEL analysis.
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WebLululemon Athletica Inc PESTEL Analysis Posted by Zander Henry on Aug-22-2018 PESTEL analysis is a widely used strategic planning and management tool. Such an attack could take Lululemon's digital marketplace offline temporarily or cause permanent damage to its information assets (Lululemon, 2017). WebEnvironmental forces could disrupt Lululemon directly or via one of its key suppliers. Moreover, there are laws to set the maximum price, ensure a certain quality standard and protect consumers from fraudulent marketing claims. Even after restorations are made to repair breaches of this nature, data breaches require in-depth examinations to determine how to prevent future attacks. IGI Global. Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. - Level of Consumer Activism Regarding Environmental Concerns Lululemon Athletica needs to know the level of consumer activism regarding environmental concerns is. Pestel Analysis And Pest Analysis: American Apparel 2014 Words | 9 Pages. Natural disasters in South East Asia and South Asia especially a concern because 82% of the Lululemon products come from manufacturing in these regions (Lululemon, 2017). To conclude, the PESTEL model is an important business tool that involves a detailed analysis of macro-environmental factors that shape the business environment. Service, Dissertation There are many suppliers competing for retailers business. Lululemon Athletica Inc. should carefully consider the on-going technological innovations to stay ahead of the competition. Entering in mature industries can be more challenging due to market saturation than industries at the growth stage. Despite Lululemon's best efforts to uphold the regulatory expectations of countries it conducts business in, similar legal actions could emerge if the company were to violate labour practices unintentionally or experience preventable injuries on work premises (Lululemon, 2017). There is consistency in both policy making and implementations of those policies. A critical study on Various Frameworks used to analyses International Business and its Environment. Social factors that leadership of Lululemon Athletica Inc. should analyze for PESTEL analysis are -, Technology is fast disrupting various industries across the board. so converse have to change their policy to stable in the current market. USA has avoided the European Union style stagnant economy on the back of slightly higher birth rate and higher level of immigration. (2016). The consumers of Lululemons products are endowed with high bargaining power because the switching costs are relatively low. 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. The first Converse All Star shoes was made in the middle 1900 as a shoes for basket ball players. Nike PESTLE Analysis.pdf. Transportation industry is a good case to illustrate this point. 4. The adoption of new technologies has shortened the lifecycle of new product development. 3. Lululemon Athletica Inc. can leverage the opportunities offered by social media marketing to improve business performance. Solution, Assignment Writing Patents are very important in Lululemon operation to have advantage of their competitor. Lululemon Atheltica. Exploring strategy. Some countries offer subsidies for encouraging investment in renewable technologies.
Thus significantly impacting the ability of Lululemon Athletica to build sustainable competitive advantage
Andr Cavalcante, S. (2013). Webb, J. - 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. 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. 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. 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. 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. 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. so there is a big opportunities for converse from these companies. Understanding the impact of technology on firms business models. Most recent surveys suggest that around 76 % students try professional Dissertation In order to evaluate a company, we need to go beyond the numbers mentioned in financial statements. BusinessTeacher.org provide free business resources and online learning tools, perfect for helping students and professionals to develop their knowledge and gain a better understanding of different aspects of business. We make beautiful, dynamic charts, heatmaps, co-relation plots, 3D plots & more. Number of factories increased throughout the nation, it became one of the leading industrial nations in the world. PESTEL stands for - Political, Economic, Social, Developing strategic business models and competitive advantage in the digital sector. IEEE. 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. Dante Pirouz, Kelly Huang Arman (2018), "Lululemon Athletica Inc. Harvard Business Review Case Study. WebPESTEL Analysis of Lululemon Athletica s Product Employee and Public Relations Issues Model was proposed by Michael E. Porter in 1979. Alternatively, Lululemon's business activities abroad are also subject to the rule-making of local political leaders (Bertels, Koen, & Elsum, 2015). Near the end of November 2013, Lululemon Athletica (Lululemon) became the subject of a viral firestorm after a series of negative events seriously ruptured the company's reputation. WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. As Lululemon Athletica Inc. looks to expand and leverage its competencies and core capabilities, conducting the PESTEL analysis is imperative for developing effective strategies and achieving long-term growth objectives. Ranging from political factors to environmental factors, each factor comprises various variables that influence the strategic decision making process of business organizations like Lululemon Athletica Inc. Aithal, P. S. (2017). - Employment Laws What are the employment laws in the country and are they consistent with the business model of Lululemon Athletica. - Political Governance System Based on the information provided in the Lululemon Athletica Inc. case study, it seems that the country have a stable political system. Common materials used in apparel making such as rubber and cotton are readily available. If the legal system is not strong then Lululemon Athletica can face numerous challenges from consumer petitions to shakedowns from authorities. Lululemon operates at wide range of market. Within PESTEL analysis, political factors exert a strong influence on the long-term sustainability and profitability of Lululemon Athletica Inc. - Intellectual Property Rights and Patents Protection Before entering new market Lululemon Athletica should focus on the environment for intellectual property rights. With growing market, there will be opportunity to grow. Course Hero is not sponsored or endorsed by any college or university. If you have BIG dreams to score BIG, think out Thank you for your email subscription. Nevertheless, Dollaramas main competition all strive to reduce prices and maintain exceptional quality, which can be stressful for these companies because when you lower the prices you also lower the profit. 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. The achieve success in such a dynamic apparel stores industry across various countries is to diversify the systematic risks of political environment. Financial Times Prentice Hall. - 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. As population is ageing it will require less tech intensive products. Lululemon Athletica can leverage such a situation to hire the best people in business. Political environment and other factors not only impact the cost of doing business but also long term sustainability. High unemployment signals the availability of surplus labor at comparatively lower wages. 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. 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. - Acceptance of Mobile Payments and Fintech Services One of the areas where US are lacking behind China is Mobile Payments. In fact, a proper understanding of these factors helps organizations to identify potential business opportunities and threats in the international market (Baines et al., 2011). Info: 1099 words (4 pages) PESTEL Example Legal is the sixth factor of PESTEL analysis. 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. 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. 2. WebLululemon Athletica Inc PESTEL & Environment Analysis Posted by Freddie Murphy on May-12-2018 PESTEL Analysis & Environment Analysis The PESTEL analysis is a tool 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. Explain. Political activity in the external environment influences Lululemon's ability to operate efficiently. There is a growing trend towards the use of green/eco-friendly products. 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). Choosing the vision, mission and the Revista ESPACIOS, 39(16). Spanish oil giant Repsol had to face a similar instance. International business. With growing market, there will be opportunity to grow. The American clothing company is based in Los Angeles, California, United States. 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. Finally, the exchange rate fluctuation can also influence the profitability and international trade. Attitudes (health, environmental consciousness, etc. Political factors play a significant role in determining the factors that can impact Lululemon Athletica Inc.'s long term profitability in a certain country or market. 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). Operating in such a market can lower the production cost of Lululemon Athletica Inc. - 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. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. The data protection has become an important issue due to consumers privacy and security concerns. Lululemon Athletica Inc. can enter in low taxation markets and benefit from high profits that can be invested in research and development activities. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. - Waste Management What is the policy of waste management in the prospective market and how Lululemon Athletica can adhere to the waste management requirements in that market. after sometime converse launch the denim ,t-shirts cap and everything related to sports. 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). Bureaucracy and corruption negatively influence the business environment. The GDP growth rate will determine the Lululemon Athletica Inc.s ability to pursue its long-term growth strategies. 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). 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. Sustainable business strategies and PESTEL framework. 24-27). Inability to protect intellectual property rights can result in losing competitive advantage, which may weaken the positioning of Lululemon Athletica Inc. against other market players. Frequent changes in government policies harm business performance by increasing environmental uncertainty. - Size of Government Budgets both Local Governments and National Government The government at both national level and local levels are running deficit budgets which is boosting growth in the short term but may lead to increase in inflation over medium term. Warning! Lululemon Athletica Inc. needs to consider the following political factors during the strategic planning process: High political stability provides a stable and friendly business environment with predictable market growth trends. Efficiency of financial markets Does Lululemon Athletica Inc. needs to raise capital in local market? 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. Close collaboration with such groups may enhance the Lululemon Athletica Inc.s ability to collaborate with community and achieve long-term corporate goals. For example in United States Texas and Florida have different liability clauses in case of mishaps or environmental disaster. Today, new products are developed quickly, and supply chain partners have also gained more power. Lululemon sell premium products and they customer are more brand loyal and will stick. Customer Loyalty Program Create a customer loyalty points systems for purchases. 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. This will help in better predicting the environment policy of the country. 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. The health and efficiency of financial markets will determine Lululemon Athletica Inc.s ability to raise the capital at fair prices. Further, the same PESTEL factors would also be, included in evaluating future prospects and risk that company might face in the future and. In this situation, the suppliers have a low level of bargaining power. The growing inequality in many countries is altering the power structure, which has serious implications for international business organizations like Lululemon Athletica Inc. Lululemon Athletica Inc. need to study the traditionally assigned gender roles to align its marketing and communication practices accordingly. Strategy planning process often requires five steps
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. As such, Lululemon should temper its expansion efforts with risk management and scenario planning strategies to account for known and hypothetical political threats. The achieve success in such a dynamic Textile - Apparel Clothing industry across various countries is to diversify the systematic risks of political environment. Academic writing has no room for errors and mistakes. Lowers prices for faithful customers. For quite a few multinational corporations, these issues are controllable, although this is not the case for Lululemon since it is far-removed from its suppliers and has few supplier alternatives. University of San Carlos - Main Campus. Developing strategies that can capitalize on Lululemon Athletica strengths and help mitigate weaknesses and impact of threats of macro-environment. Desai, K. J. 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. The strength of high price product strategy is that Nike can earn more on each single item. 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 With rapid numbers of factories means more competition. Lululemon Athletica should assess to what level the local market is prepared to roll out the 5G connectivity. Definition of PESTEL / PEST / STEP Analysis. 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). 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