Also, it can ensure the quality of the products. Choosing the vision, mission and the - 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. Legal is the sixth factor of PESTEL analysis. 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. (2016). International business. Help, Academic (2014). The presence at international stage increases the companys sensitivity to changes in political environments of different countries. WebPESTEL ANALYSIS PRESENTATION University Canada West ETHICS, CSR & BUSINESS ENVIRONMENT (BUSI 601) Lululemon Athletica Inc. WebThe PESTEL analysis is one of the management assessment methods from various points of view of political , economic , social , technological , environmental , and legal . Choosing the vision, mission and the reason of existence for Lululemon Athletica. 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. 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. WebLululemon Athletica Inc PESTEL Analysis Posted by Zander Henry on Aug-22-2018 PESTEL analysis is a widely used strategic planning and management tool. With growing market, there will be opportunity to grow. Industrial safety regulations in the Consumer Goods sector. In addition, the company's chief executive officer had stepped down. Moreover, considering the development and maturity level of technology in the respective market is also important. Lululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. Similarly, if environmental hazards damage raw material sources manufacturers depend on for making Lululemon athletic apparel, the company may not be able to meet product demand levels. - Government Spending As mentioned in the political factors, government of the country is running deficit budgets. Pestel Analysis And Pest Analysis: American Apparel 2014 Words | 9 Pages. Check your email If there is huge income inequality in the society then the likelihood of conflict and crime increases. 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). One of Lululemons biggest strengths is its quality, which results in one of their most significant competitive advantages. 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. (B1): Malcolm Gefter case study solution, The Allstate Corporation case study solution, Planned Parenthood Federation of America (A) case study solution, Liberty TripAdvisor Holdings, Inc. PESTEL & Environment Analysis, Long Island Iced Tea Corp. PESTEL & Environment Analysis, Landec Corporation PESTEL & Environment Analysis, Snyder's-Lance, Inc. PESTEL & Environment Analysis, Limoneira Company PESTEL & Environment Analysis, Lamb Weston Holdings, Inc. PESTEL & Environment Analysis, Lifeway Foods, Inc. PESTEL & Environment Analysis, La-Z-Boy Incorporated PESTEL & Environment Analysis, Mattel, Inc. PESTEL & Environment Analysis, Malibu Boats, Inc. PESTEL & Environment Analysis. It can enable Lululemon Athletica to hire skilled workforce at competitive salaries. Entrepreneurial spirit and broader nature of the society. Bureaucracy and interference in Textile - Apparel Clothing industry by government. WebImportance of PESTEL Analysis in Strategy Management & Planning Process Strategy planning process often requires five steps 1. Below is a demonstration 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). 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). 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 written by Dante Pirouz, Kelly Huang Arman and shed light on critical areas in field of Sales & Marketing, that the protagonist in the case study is facing. - Consumer Protection Laws Lululemon Athletica needs to know what are the consumer laws, what is the rate of enforcement, what is the attitude of authorities towards consumer protection laws, and what is the role activist groups in enforcement of consumer protection laws. Developing strategic business models and competitive advantage in the digital sector. 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. WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. We are here to help. The macro-environment factors can impact the please submit your details here. Therefore, the company has to ensure its products are of high quality and they are also affordable. A detailed understanding of the economic environment can help Lululemon Athletica Inc. estimate the growth trajectory of industry and organization. Desai, K. J. - Inequality Index / Ranking on Gini Index Gini Index and level of inequality are a great barometer for harmony and development of a society. Supply chain risk management framework: A fishbone analysis approach. : A comparative content analysis of mainstream yoga lifestyle magazine covers. Integrity, Marketing strategy of Lululemon Athletica Inc, Lululemon Athletica Inc Case Analysis and Case Solution, Lululemon Athletica Inc Case Study Solution. A strategic framework for technology evaluation. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. Lululemon Athletica can leverage this trend to expand the market beyond its traditional customers by employing a differentiated marketing campaign. Academic writing has no room for errors and mistakes. - Role Local Governments Play Local governments are highly influential in the policy making process and implementation as most of the policies and regulations are implemented by the local government as enforcement agencies mostly report to local government in their own states regarding various laws. academic writing services at least once in their lifetime! so there is a big opportunities for converse from these companies. Nobody get fired for buying our Business Reports Templates. and cannot be used for research or reference purposes. Choosing the vision, mission and the 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. . According to Michael Porter organizational performance is to large extend determined by various industry forces. Political factors also comprise of laws, activities and groups that impact and limit companies and individuals in a certain culture and society. We believe that Chip Wilson and Lululemon would be better off if Chip remained in his current position at Lululemon. The three inter-related environments are industry environment in which the company operates in, the geographic market or country in which company operates, and wider socio economic / macro environment. The organization should also carefully consider the interest rate and its influence on borrowing ability and attitude towards investment. Explain and justify your rating. It is sensitive to business law regulation in different countries, and they tax regulation. Technology' is the fourth factor of PESTEL analysis. DCLL PESTLE analysis Political Lululemon operates at wide range of market. It must look at regulations and law in each of countries that they operate in. Lululemon is fast growing company that open stores or franchise in market such as America, Japan, Australia and Europe. Moreover, adopting efficient waste management practices in organizational units that are located in or near urban areas is highly crucial for Lululemon Athletica Inc. European Journal of Innovation Management, 16(3), 285-300. Lululemon Athletica should have capabilities to navigate under this hyper sensitive environment. 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. (2018). 1, pp. Daidj, N. 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. - Birth Rate Birth rate is also a good indicator of future demand. If the process is consistent and transparent then Lululemon Athletica can plan ahead with greater conviction. 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). Lululemon Athletica should assess what are preferred choice of mobile payments in local economy and chose the business model based on it. Because of Dollaramas mix of alluring prices and exceptional product quality, it remains Canadas leading discount store despite. that shape strategy and competitive landscape. (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. 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. It will help Lululemon Athletica in both developing environmentally friendly products and thwarting PR stumble blocks. Seifert, C. & Chattaraman, V. (2017). PESTEL analysis is critical to understand the external threats & opportunities arising because of the macro environment developments. 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. High GDP also signals the consumers ability to spend more on offered products. This will help in better predicting the environment policy of the country. 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. should carefully consider the on-going technological innovations to stay ahead of the competition. They can impact individual firms competitive advantage or overall profitability levels of the Consumer Goods industry. WebPESTEL Analysis is a strategic management tool that Lululemon Athletica management can use to make better decisions. The company found itself facing its worst quality control problem to date, with a recall of 17 per cent of its Luon pants due to issues with sheerness. Lululemon Athletica Inc. can enter in low taxation markets and benefit from high profits that can be invested in research and development activities. In highly hierarchical societies the power of decision making often reside at the top. Natural disasters in South East Asia and South Asia especially a concern because 82% Following economic factors need to be considered by Lululemon Athletica Inc. to make informed decisions: The economic development of a country directly influences organizational performance. Studying and forecasting the consumers purchasing power based on relevant economic indicators is important to analyze the customers interests and spending patterns. - 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. Business models outside the core: Lessons learned from success and failure. Studying the demographic characteristics can help Lululemon Athletica Inc. in choosing the right market segment/segments with high growth potential. Providing a secure work environment for the workforce is the ethical and moral obligation of Lululemon Athletica Inc. Copyright 2023 IPL.org All rights reserved. Different countries have different attitude towards health and safety so it is better for Lululemon Athletica to conduct a thorough research before entering the market. This investment will also increase stakeholder satisfaction and expand the customer base due to enhanced brand image. Technological innovations like this can bring major transformations in the industry and reset the success rules for market players. Nike PESTLE Analysis.pdf. Like all businesses they are sensitive to economic situation on global and local markets. To conclude, the PESTEL model is an important business tool that involves a detailed analysis of macro-environmental factors that shape the business environment. 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. Businesses tried to come together, but it didnt always work. IGI Global. Course Hero is not sponsored or endorsed by any college or university. Out of which, the net income of the sportswear Lululemon Athletica Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. The Essay Writing ExpertsUS Essay Experts. As population is ageing it will require less tech intensive products. - Transparency in Judiciary System & Processes Transparency is essential for fair and consistent decision making. No plagiarism, guaranteed! Some societies encourage entrepreneurship while some dont. Strategically leveraging corporate social responsibility: A corporate branding perspective. If you need help with something similar, Transportation industry is a good case to illustrate this point. Canadian government introducing Workplace Fitness Program Policy, and many other countries that Lululemon operate have also such policies. Number of factories increased throughout the nation, it became one of the leading industrial nations in the world. This article is only an example Explain. The business and marketing strategies are also influenced by migration. Key Takeaways The Lululemon SWOT analysis shows that the company needs to improve its business and survive in the current sports apparel market. SWOT analysis of Lululemon Athletica analyses the brand by its strengths, weaknesses, opportunities & threats. All the regulations about design patent need to be monitored by company. Vallester, C., Lindgreen, A., & Maon, F. (2012). Do you have a 2:1 degree or higher? - 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. The political environment of a country comprises multifaceted factors. This critique is a reflection of Strategic Industry Analysis of clothing Industry in United Kingdom, Italy and France. 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. The report also includes a PORTER and PESTEL analysis with the potential impact of micro-economic factors by region on the market. 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. Leading industrial nations in the society then the likelihood of conflict and crime increases depends third-parties. Of existence for Lululemon Athletica Inc. in choosing the right market segment/segments with high growth potential societies! Athletica analyses the brand by its strengths, weaknesses, opportunities & threats such as America, Japan, and! This can bring major transformations in the political environment of a country and region have a direct impact on market... Improve its business and survive in the digital sector PR stumble blocks is. Least once in their lifetime our business Reports Templates Birth lululemon pestel analysis is important... 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