If the legal system is not strong then Lululemon Athletica can face numerous challenges from consumer petitions to shakedowns from authorities. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. The 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. However, when there is political chaos, it deters the investors and harms the stakeholders' trust in economic and consequent organizational performance. Currently, Lululemon Athletica Inc. is present in different countries, each having own political tensions. Use research as, 1. WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. PESTEL analysis is critical to understand the external threats & opportunities arising because of the macro environment developments. WebPESTLE analysis : Is a shortcut of six words which is political , Economic , Social , Technological , Legal and Environmental .Usually this concept used in marketing .Also it - Demographic Trend The demographic trend is one of the key factors in demand forecasting of an economy. They can impact individual firms competitive advantage or overall profitability levels of the Consumer Goods industry. 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). With rapid numbers of factories means more competition. 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. 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. - Paris Climate Agreement and Commitment of National Government under the Agreement What are the commitments of the country under the Paris Agreement and what is the general level of consensus regarding Paris Climate Agreement in the country. after sometime converse launch the denim ,t-shirts cap and everything related to sports. Close collaboration with such groups may enhance the Lululemon Athletica Inc.s ability to collaborate with community and achieve long-term corporate goals. 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. Organizational culture derives strong influence from the societal norms, values and trends. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. (2017). - Intellectual Property Rights and Patents Protection Before entering new market Lululemon Athletica should focus on the environment for intellectual property rights. Desai, K. J. 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). of the box and hire Case48 with BIG enough reputation. We make beautiful, dynamic charts, heatmaps, co-relation plots, 3D plots & more. A detailed understanding of the economic environment can help Lululemon Athletica Inc. estimate the growth trajectory of industry and organization. International business. 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. Common materials used in apparel making such as rubber and cotton are readily available. Analyze the Lululemon Athletica external competitive environment to identify opportunities and threats. 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. As population is ageing it will require less tech intensive products. They are just awesome. 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. We make the greatest data maps. For instance, extreme weather conditions can increase the cost of operations and compel the Lululemon Athletica Inc. to make the value chain more flexible. Analyze Strengths and Weaknesses of Lululemon Athletica. Education level as well as education standard in the Lululemon Athletica Inc. s industry, Culture (gender roles, social conventions etc.). WebSociological Analysis Of Lululemon 191 Words | 1 Pages. Lululemon Athletica Inc. cannot enter a new market without studying in detail the legal environment and regulatory structure of the new consumer market. In this situation, the suppliers have a low level of bargaining power. Study for free with our range of university lectures! Lululemon is fast growing company that open stores or franchise in market such as America, Japan, Australia and Europe. - 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. Likewise, Lululemon stores in countries with worsening economic conditions may have to close if doing business there becomes unprofitable or too risky. PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Lululemon Athletica Inc.. WebImportance of PESTEL Analysis in Strategy Management & Planning Process Strategy planning process often requires five steps 1. 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. Issa, T., Chang, V., & Issa, T. (2010). 3. 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 Athletica should be aware of presence of such practices in a country. With growing market, there will be opportunity to grow. Social factors that leadership of Lululemon Athletica Inc. should analyze for PESTEL analysis are -, Technology is fast disrupting various industries across the board. 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). However, it started off WebView Lululemon External Analysis Worksheet Part 1.doc from MGT 472 at Salem State University. 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. The companys logo and monogram being seen on their products is something which is easily recognized by every customer. Factors influencing consumers' purchase intention of green sportswear. The local business that has been selected to conduct PESTEL analysis is one of the most, renowned clothing brand in North America i.e. A critical study on Various Frameworks used to analyses International Business and its Environment. 1, pp. - 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. 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. DCLL (2014). 5. (2018). WebThe PESTEL analysis is one of the management assessment methods from various points of view of political , economic , social , technological , environmental , and legal . Warning! 4. These rules can have a direct role in creating the strategies and approaches. 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. 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). Level of corruption - especially levels of regulation in Consumer Goods sector. Choosing the vision, mission and the ~ 0.0 Page). Developing strategic business models and competitive advantage in the digital sector. 1. A., & Gomez, o. Political Integrity, Essay Writing Dante Pirouz, Kelly Huang Arman (2018), "Lululemon Athletica Inc. Harvard Business Review Case Study. Case Analysis - Lululemon Athletica, Inc. 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Lastly, Lululemon Athletica Inc. should study the consumers leisure interests and should focus more on enhancing the customer experience if customers prefer experiential products over traditional product offerings. Lululemon 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. 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. A framework for PEST analysis based on fuzzy decision maps. By association, should these companies engage in unethical business practices 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. prosperity, recession, recovery), Demographics and skill level of the population. academic writing services at least once in their lifetime! - Gender Composition in Labor Market Lululemon Athletica can use gender composition of labor market to understand the level of liberal nature of the society, women rights, and womens say in matter of societal issues and consumption decisions. This will enable the Lululemon Athletica to determine if required can it hire talent globally to work in that particular market. Definition of PESTEL / PEST / STEP Analysis. One of Lululemons biggest strengths is its quality, which results in one of their most significant competitive advantages. Within PESTEL analysis, political factors exert a strong influence on the long-term sustainability and profitability of Lululemon Athletica Inc. - Government Spending As mentioned in the political factors, government of the country is running deficit budgets. PES ANALYSIS.docx. The growing use of mobile phones and social networking sites must be considered when developing marketing and communication strategies. This gives Lululemon a lot of choice in picking who they want to buy supplies from. Climate change and changing ecosystem is leading to the extinction of more than 20% of species on the planet by the turn of this century. However, they should try to understand the changes in the external environment and assess the impact of those changes on the target market. This critique is a reflection of Strategic Industry Analysis of clothing Industry in United Kingdom, Italy and France. 2. Studying the demographic characteristics can help Lululemon Athletica Inc. in choosing the right market segment/segments with high growth potential. - Birth Rate Birth rate is also a good indicator of future demand. As mentioned, the snowboarding industry is becoming increasingly competitive and requires constant innovation and management to retain market share. Academic writing has no room for errors and mistakes. Patents are very important in Lululemon operation to have advantage of their competitor. Proposal, Assignment Writing WebLululemon Athletica Inc PESTEL Analysis Posted by Zander Henry on Aug-22-2018 PESTEL analysis is a widely used strategic planning and management tool. Disclaimer: This work was produced by one of our academic writers to help university students with their studies. Analyzing the companys financial statement helps in evaluating performance of the company that further helps in making smart decisions. Similarly, it is important to understand the industry lifecycle stage. Lululemon Athletica Inc. must adjust its business management practices while entering in markets with high or low power distance. - Transparency in Judiciary System & Processes Transparency is essential for fair and consistent decision making. Managers at Lululemon Athletica need to examine three inter-related environments in order to come up with an effective strategy. Lululemon operates at wide range of market. - Acceptance of Mobile Payments and Fintech Services One of the areas where US are lacking behind China is Mobile Payments. - 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. 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 GDP growth rate will determine the Lululemon Athletica Inc.s ability to pursue its long-term growth strategies. Below is a demonstration The Industrial Organization (I/O) approach advocates that for sustainable competitive advantage external factors are as important as internal factors of the Lululemon Athletica. Such changes can also influence the consumers' spending patterns, causing the organization to revise its product and marketing strategies. The bond rating of national government is investment grade. Each society has distinctive norms and values that play an important role in shaping consumer behavior. The political environment of a country comprises multifaceted factors. Entrepreneurial spirit and broader nature of the society. Efficiency of financial markets Does Lululemon Athletica Inc. needs to raise capital in local market? Wall, S., Minocha, S., & Rees, B. But often in emerging countries these agencies delay the process as a tactic to extract bribes. Many countries have placed strict norms to protect their urban areas through effective waste management. Lululemon Athletica Inc. should also attempt to understand the degree of consumer ethnocentrism and consider the country of origin effect to determine local consumers evaluation of foreign products. 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. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. University of San Carlos - Main Campus. Grnig, R., & Morschett, D. (2017). The late 1800s was an important time for America in business and industry. Technology' is the fourth factor of PESTEL analysis. SWOT analysis of Lululemon Athletica analyses the brand by its strengths, weaknesses, opportunities & threats. 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