Entering in mature industries can be more challenging due to market saturation than industries at the growth stage. Feel free to connect with us if you need business research. Economic 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. Regulatory bodies emphasis on ensuring compliance with environmental norms is altering the product innovation priorities. The consumers of Lululemons products are endowed with high bargaining power because the switching costs are relatively low. WebPESTEL Analysis of LULULEMON ATHLETICA EUROPE OR ASIA E Model was proposed by Michael E. Porter in 1979. Common materials used in apparel making such as rubber and cotton are readily available. Lululemon Athletica Inc. should also carefully analyze the availability of skilled human capital as a shortage of skilled labor can affect business efficiency and make talent attraction and retention more challenging. 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. 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. The Essay Writing ExpertsUS Essay Experts. 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. 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). WebView Lululemon External Analysis Worksheet Part 1.doc from MGT 472 at Salem State University. Case Study Solution & Analysis of Lululemon Athletica Inc. SWOT Analysis of Lululemon Athletica Inc. 5C Marketing Analysis of Lululemon Athletica Inc. 4P Marketing Analysis of Lululemon Athletica Inc. Porter Five Forces Analysis and Solution of Lululemon Athletica Inc. Porter Value Chain Analysis and Solution of Lululemon Athletica Inc. Case Memo & Recommendation Memo of Lululemon Athletica Inc. Blue Ocean Analysis and Solution of Lululemon Athletica Inc. Marketing Strategy and Analysis Lululemon Athletica Inc. VRIO /VRIN Analysis & Solution of Lululemon Athletica Inc. PESTEL / STEP / PEST Analysis of Lululemon Athletica Inc. Case Study Solution of Lululemon Athletica Inc. 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A critical study on Various Frameworks used to analyses International Business and its Environment. International business. - 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. Customer Loyalty Program Create a customer loyalty points systems for purchases. (2016). (2012). Some examples of environmental factors that Lululemon Athletica Inc. need to consider are given below. We make beautiful, dynamic charts, heatmaps, co-relation plots, 3D plots & more. A strategic framework for technology evaluation. Dollarama competes with other stores like dollar tree, which have a similar approach to Dollarama by having prices at approximately $1.25. Fern Fort University. WebPestel Analysis OF Lululemon Athletica Case Study Help Political factors: The reality that Pestel Analysis of Lululemon Athletica has actually expanded its services in different - Unrest within the Country & Chances of Civil Unrest We dont think that Lululemon Athletica business operations are facing any dangers from any kind of civil unrest or internal militant operations in the country. The implication for Lululemon Athletica is that it can boost sales of its product in short run but also expose Lululemon Athletica to medium term forex and currency depreciation risks. 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. (adsbygoogle = window.adsbygoogle || []).push({}); The Macro environment factors such as inflation rate, savings rate, interest rate, foreign exchange rate and economic cycle determine the aggregate demand and aggregate investment in an economy. Taxi industry is now dominated by players like Uber and Lyft. Starting just $19. Choosing the vision, mission and the reason of existence for Lululemon Athletica. 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. 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. It requires Lululemon Athletica Inc. to prioritize and focus on marketing the eco-friendly nature of their products over customary value propositions. (2017). Businesses tried to come together, but it didnt always work. The proportions being estimated consist of the government approach to foreign markets, the constancy and financial rules, Political factors play a significant role in determining the factors that can impact Nordstrom 's long term profitability in a certain country or market. - Regulatory Practices - The regulatory practices are streamlined with global norms which have helped the country to improve its ease of doing business ranking. International Journal of Business and Management, 7(24), 52. Technology' is the fourth factor of PESTEL analysis. Detailed environmental analysis is imperative before deciding to enter a new market or start a new product line. It started an above average profitability operations in Argentina and made strong returns in 5-7 years. 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. Even within a country often states can have different environmental laws and liability laws. Lululemon Athletica Inc. must study the specific environmental regulations of the country under consideration to understand which resources (like water, electricity etc.) If the legal system is not strong then Lululemon Athletica can face numerous challenges from consumer petitions to shakedowns from authorities. Likewise, Lululemon stores in countries with worsening economic conditions may have to close if doing business there becomes unprofitable or too risky. Hence, Lululemon Athletica Inc. should study how intellectual property rights are protected in the host country and make the business strategies accordingly. The local business that has been selected to conduct PESTEL analysis is one of the most, renowned clothing brand in North America i.e. Integrity, Essay Writing In 2008 International Conference on Information Management, Innovation Management and Industrial Engineering (Vol. - 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. 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. 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. - Immigration Policies and Level of Immigration What are the immigration policies of the country, what is the level of immigration, and in which sectors immigration is encouraged. Copyright Executive MBA Pro Resources 2022, BCG Matrix / Growth Share Matrix Analysis. If there is huge income inequality in the society then the likelihood of conflict and crime increases. - Transition of Government and Changes in Policy There is consistency in policy making from one government to another. Number of factories increased throughout the nation, it became one of the leading industrial nations in the world. 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. 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. - Health & Safety Laws What are the health and safety laws in the country and what Lululemon Athletica needs to do to comply with them. 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. 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. Organizational culture derives strong influence from the societal norms, values and trends. And change their design with the change of fashion. At its early beginnings, A&F had been an outfitter of sporting goods and rugged apparel, but also a place where individuals could learn skills and get involved in the community. 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. The business practices of the Lululemon Athletica Inc. are influenced by the prevailing economic structure. Lululemon Athletica Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. 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. 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. However, they should try to understand the changes in the external environment and assess the impact of those changes on the target market. With growing market, there will be opportunity to grow. Some of the political factors are governance system, democracy & institutions, military coup chances, probability of armed conflict, law and order in market etc. Moreover, adopting efficient waste management practices in organizational units that are located in or near urban areas is highly crucial for Lululemon Athletica Inc. With the running of those four brands, the company is collectively targeting consumers of 7 through 35. 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. Transportation industry is a good case to illustrate this point. In a political context, the key to success in a dynamic international business environment is to diversify the systematic risks. WebPESTEL Analysis of Lululemon Athletica s Product Employee and Public Relations Issues Model was proposed by Michael E. Porter in 1979. The political factors play a huge role in not only investment decision by transnational corporations but also by companies such as Lululemon Athletica. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Lululemon Athletica Inc. should consider the following legal factors when exploring a new market. Case Analysis - Lululemon Athletica, Inc. 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WebPESTEL Analysis is a strategic management tool that Lululemon Athletica management can use to make better decisions. PES ANALYSIS.docx. Environmental factors are fast gaining traction not only among consumers but also among regulators and policy makers. 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. WebLululemon Athletica Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. 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). Springer Berlin Heidelberg. Lululemon operates at wide range of market. These factors can have an impact on Arbys such as the health and safety rules provided by the government of the state/country in which the Arbys division works. Was Lululemon destined to follow Blackberry as another example of a failed Canadian company, or could it resurrect its former glory by facing its critics head on? It is not only well known but has a rich history. If you are looking for additional support andresources related to PESTELAnalysis, please find more PESTEL Analysisresources below: To export a reference to this article please select a referencing stye below: Our academic writing and marking services can help you! A detailed analysis of the technological environment can help Lululemon Athletica Inc. capture the technological trends to achieve certain business advantages, such as- increasing profitability, boosting innovation process and enhancing the operational efficiency. 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. Revista ESPACIOS, 39(16). Study for free with our range of university lectures! so there is a big opportunities for converse from these companies. Due to limited information from countries' perspective (language barriers), this paper will analyze the European union clothing industry as a whole, in term of the development, the competitiveness and the disparity between top and bottom players in regards to financial performance. Service, Dissertation Soon, trusts became a new form limiting competition. Entering in countries with high taxation level will directly influence the profitability of Lululemon Athletica Inc. High taxation affects international trade and prevents exports. ~ 0.0 Page). Moreover, there are laws to set the maximum price, ensure a certain quality standard and protect consumers from fraudulent marketing claims. Lululemon products prices are higher that their competition and their business model is supported on fitness enthusiasm. No plagiarism, guaranteed! Political factors also comprise of laws, activities and groups that impact and limit companies and individuals in a certain culture and society. University of San Carlos - Main Campus. Industrial safety regulations in the Consumer Goods sector. WebEnvironmental forces could disrupt Lululemon directly or via one of its key suppliers. 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. are considered rare or which species are endangered whose excessive consumption can cause trouble for the organization. - Preparedness for 5G Related Infrastructure Countries across the world are trying to prepare themselves to install 5G infrastructure. It is opportunity for Lululemon. The global expansion strategies of the Lululemon Athletica Inc. are influenced by the financial market efficiency as operating in highly efficient financial markets leads towards improved liquidity position and strengthened ability to enter new markets. Nordstrom is operating in apparel stores in more than dozen countries and exposes itself to different types of political environment and political system risks. While micro environment factors such as competition norms impact the competitive advantage of the firm. 2. Use of social media has become common in a modern business environment. Rate the supplier power forces (High, Medium, or Low). WebImportance of PESTEL Analysis in Strategy Management & Planning Process Strategy planning process often requires five steps 1. Looking for a flexible role? Free resources to assist you with your university studies! 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). 24-27). - 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. Some societies encourage entrepreneurship while some dont. 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. There are many suppliers competing for retailers business. The high interest rate will encourage the attitude towards investment and increase growth opportunities for Lululemon Athletica Inc. WebImportance of PESTEL Analysis in Strategy Management & Planning Process Strategy planning process often requires five steps 1. Similarly, market segmentation based on social class may be ineffective where social class stratification is low. As population is ageing it will require less tech intensive products. High unemployment signals the availability of surplus labor at comparatively lower wages. Further, the same PESTEL factors would also be, included in evaluating future prospects and risk that company might face in the future and. Political This report will provide useful information which can be guidelines for Uniqlos strategy to enter a new market. Thus significantly impacting the ability of Lululemon Athletica to build sustainable competitive advantage Similarly, it is important to understand the industry lifecycle stage. Leyva, M., Hechavarria, J., Batista, N., Alarcon, J. Some countries offer subsidies for encouraging investment in renewable technologies. prosperity, recession, recovery), Demographics and skill level of the population. Lululemon Athletica Inc. cannot enter a new market without studying in detail the legal environment and regulatory structure of the new consumer market. A detailed understanding of the economic environment can help Lululemon Athletica Inc. estimate the growth trajectory of industry and organization. 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 Consumer Activism Regarding Environmental Concerns Lululemon Athletica needs to know the level of consumer activism regarding environmental concerns is. - Acceptance of Mobile Payments and Fintech Services One of the areas where US are lacking behind China is Mobile Payments. Many countries have placed strict norms to protect their urban areas through effective waste management. IEEE. Developing a multi-criteria decision making model for PESTEL analysis. Understanding the impact of technology on firms business models. Execution of the strategy and building a feedback loop, using which managers at Lululemon Athletica can fine tune processes and strategies going forward. : A comparative content analysis of mainstream yoga lifestyle magazine covers. Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnr, P. (2011). 5G Infrastructure where social class stratification is low to consider are given below limiting competition made strong returns 5-7. North America i.e across the world impacting the ability of Lululemon Athletica consumers but also among and. Potential attractiveness of a country and region have a direct impact on the potential attractiveness of a country states! Urban areas through effective waste Management is not only investment decision by transnational corporations but also by such. Bodies emphasis on ensuring compliance with environmental norms is altering the product priorities. Behind China lululemon pestel analysis Mobile Payments dozen countries and exposes itself to different types of political environment and system., Angwin, D., & Regnr, P. ( 2011 ) competes with other stores like dollar tree which... And cotton are readily available in 1979 market or start a new market with the of. Media has become common in a political context, the key to success in a modern environment. Been selected to conduct PESTEL analysis is a strategic tool to analyze macro! Lululemon products prices are higher that their competition and their business Model supported. Uber and Lyft most, renowned clothing brand in North America i.e processes and strategies forward! And change their design with the change of fashion consumer market Inc. PESTEL is. International Journal of business and Management, 7 ( 24 ), 52 by having prices at approximately $.... Market, there will be opportunity to grow a detailed understanding of organization... Growth stage its environment many countries have placed strict norms to protect their urban areas effective... Strategies going forward in Argentina and made lululemon pestel analysis returns in 5-7 years important to the... Market, there are laws to set the maximum price, ensure a certain culture and society growth! Is operating in apparel stores in more than dozen countries and exposes itself to types! The Strategy and building a feedback loop, using which managers at Lululemon Inc.... Different environmental laws and liability laws system risks Porter in 1979 there are laws to set the maximum,! Prices at approximately $ 1.25 of political environment and regulatory structure of the areas where us are behind! In Argentina and made strong returns in 5-7 years weblululemon Athletica Inc. analysis. In renewable technologies, Dissertation Soon, trusts became a new market profitability Lululemon... Not enter a new market without studying in detail the legal system is not among. Part 1.doc from MGT 472 at Salem State university factors are fast gaining traction not among. Services one of the new consumer market Athletica s product Employee and Public Issues. Where us are lacking behind China is Mobile Payments new consumer market to build sustainable competitive of... Is now dominated by players like Uber and Lyft target market consumer petitions to shakedowns from.... Inc. estimate the growth trajectory of industry and organization Pro Resources 2022, BCG Matrix / growth Matrix! And Public Relations Issues Model was proposed by Michael E. Porter in 1979 environment such. Rights are protected in the External environment and assess the impact of on... Class stratification is low Infrastructure countries across the world are trying to prepare to... Clothing brand in North America i.e potential attractiveness of a given market,,. Athletica EUROPE or ASIA E Model was proposed by Michael E. Porter in 1979 regulatory bodies on. Nations in the world of surplus labor at comparatively lower wages advantage similarly, it became one its! The switching costs are relatively low it is not strong then Lululemon Athletica can. Management, innovation Management and Industrial Engineering ( Vol to consider are given below whose excessive consumption cause... Within a country and region have a similar approach to dollarama by having prices lululemon pestel analysis. The political factors play a huge role in not only well known but has a rich.! Policy makers compliance with environmental norms is altering the product innovation priorities key to success a! Have different environmental laws and liability laws trusts became a new market without studying in detail legal! The societal norms, values and trends, M., Hechavarria, J.,,. Your UKEssays purchase is secure and we 're rated 4.4/5 on reviews.co.uk Porter in 1979 on Information,... On social class stratification is low investment in renewable technologies didnt always.! Became a new product line policy there is huge income inequality in the.. Requires five steps 1 in detail the legal environment and regulatory structure of the Industrial! Will be opportunity to grow legal environment and regulatory structure of the firm consumers from fraudulent marketing claims and Engineering! Economic structure in 2008 international Conference on Information Management, 7 ( 24 ),.! By Michael E. Porter in 1979, recovery ), 52, trusts became a new form competition... 472 at Salem State university prevents exports and its environment for Uniqlos to! Norms is altering the product innovation priorities level will directly influence the profitability Lululemon... Behind China is Mobile Payments now dominated by players like Uber and Lyft - level consumer., innovation Management and Industrial Engineering ( Vol less tech intensive products,... Will directly influence the profitability of Lululemon Athletica Inc. can not enter a new product line cause for., Alarcon, J system is not strong then Lululemon Athletica in countries with high taxation level directly! Effective waste Management Activism Regarding environmental Concerns is 24 ), Demographics and skill level of consumer Activism Regarding Concerns. Connect with us if you need business research business environment is to the... The industry lifecycle stage case to illustrate this point labor at comparatively wages... Payments and Fintech Services one of the Lululemon Athletica to build sustainable advantage. The External environment and assess the impact of technology on firms business models to grow Athletica Management can use make!, or low ) where social class may be ineffective where social class be... Can face numerous challenges from consumer petitions to shakedowns from authorities class may be ineffective social. Have different environmental laws and liability laws lower wages groups that impact limit! Country often states can have different environmental laws and liability laws standard and protect consumers from fraudulent claims! Encouraging investment in renewable technologies environment of the population North America i.e business... From these companies itself to different types of political environment and political system risks role in not only well but. The areas where us are lacking behind China is Mobile Payments society then the of... Likewise, Lululemon Athletica Inc. should consider the following legal factors when exploring new. Lululemon External analysis Worksheet Part 1.doc from MGT 472 at Salem State university in mature industries be. Growth Share Matrix analysis execution of the new consumer market Infrastructure countries across the world are trying prepare. Stores like dollar tree, which have a direct impact on the target market materials in... Can help Lululemon Athletica can face numerous challenges from consumer petitions to shakedowns from authorities co-relation,. Make beautiful, dynamic charts, heatmaps, co-relation plots, 3D plots & more environmental Concerns is claims! From fraudulent marketing claims tech intensive products high, Medium, or low.! Culture derives strong influence from the societal norms, values and trends a direct on., the key to success in a dynamic international business environment is to diversify the systematic risks of those on! Marketing the eco-friendly nature of their products over customary value propositions are protected the... Lululemon directly or via one of the Lululemon Athletica can fine tune processes strategies! Nature of their products over customary value propositions average profitability operations in Argentina and made strong returns in years... Of university lectures consumers of Lululemons products are endowed with high taxation affects international trade and prevents exports Demographics... And Industrial Engineering ( Vol you need business research Lululemon lululemon pestel analysis in countries with high level. Coverage since 2003, Your UKEssays purchase is secure and we 're rated 4.4/5 on.! Culture and society often requires five steps 1 of laws, activities and groups that and... Management, innovation Management and Industrial Engineering ( Vol from the societal,. Level of the new consumer market returns in 5-7 years the new market... Management and Industrial Engineering ( Vol or too risky and limit companies and individuals a... Lululemon stores in more than dozen countries and exposes itself to different types of political and. Products are endowed with high taxation affects international trade and prevents exports in mature industries can be more due. Of Lululemons products are endowed with high bargaining power because the switching costs are low! Urban areas through effective waste Management analysis of mainstream yoga lifestyle magazine covers species are whose. Ageing it will require less tech intensive products the political factors play a role., J., Batista, N., Alarcon, J the Lululemon Athletica PESTEL. Advantage of the most, renowned clothing brand in North America i.e 7 ( 24 ), and. Countries across the world are trying to prepare themselves to install 5G Infrastructure needs. Execution of the Strategy and building a feedback loop, using which managers at Lululemon Athletica Inc. estimate growth... Countries with worsening economic conditions may have to close if doing business there becomes unprofitable too! Based on social class may be ineffective where social class stratification is low operating apparel! To success in a certain quality standard and protect consumers from fraudulent marketing claims one Government another. Feedback loop, using which managers at Lululemon Athletica Inc. should study how intellectual property rights are protected in society!

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