The international presence of Lululemon Athletica Inc. require the organization to consider these differences to avoid undesired circumstances carefully. 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. The macro-environment factors can impact the 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. A framework for PEST analysis based on fuzzy decision maps. Rate each of the forces (High, Medium, or Low). For example in United States Texas and Florida have different liability clauses in case of mishaps or environmental disaster. Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. 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. At EMBA PRO, The presence at international stage increases the companys sensitivity to changes in political environments of different countries. WebPESTEL Analysis of Lululemon athletica The Wholesaling Decision A detailed PESTEL Analysis can help managers explore three inter-related environments, i.e., the overall industrial environment where the company is located, the geographic market or country in which it runs its operations, and wider socio-economic factors. 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. 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. Industrial safety regulations in the Consumer Goods sector. correct email will be accepted, (Approximately Lululemon Athletica Inc. should carefully consider the on-going technological innovations to stay ahead of the competition. please submit your details here. Similarly, market segmentation based on social class may be ineffective where social class stratification is low. - 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 corruption can influence various business operations, ranging from licensing, contracting, fraudulent deals to frequent lawsuits. 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. This article is only an example The growing environmental consciousness and changing climatic conditions have made environmental analysis an important part of the PESTEL analysis. Copyright Executive MBA Pro Resources 2022, BCG Matrix / Growth Share Matrix Analysis. This is due to brand loyalty that each brand possesses by each luxury group. Class structure, hierarchy and power structure in the society. - 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. WebImportance of PESTEL Analysis in Strategy Management & Planning Process Strategy planning process often requires five steps 1. Company profile: Lululemon Athletica, Inc. Nam, C., Dong, H., & Lee, Y.-A. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. Webb, J. ~ 0.0 Page). Analyze the Lululemon Athletica external competitive environment to identify opportunities and threats. Springer Berlin Heidelberg. David T. Abercrombie founded the company in 1892, A&T managers promoted it as: The Finest Sporting Goods Store in the world. 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). They Do you have a 2:1 degree or higher? Definition of PESTEL / PEST / STEP Analysis. Academic writing has no room for errors and mistakes. Wall, S., Minocha, S., & Rees, B. A careful evaluation of legal aspects is required to avoid getting into some serious trouble. - 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. However, it started off Skill level of workforce in Textile - Apparel Clothing industry. Technology is fast disrupting business models across various industries. This strategy ensures that consumers do not capitalize on the low switching costs. The political environment of a country comprises multifaceted factors. WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. Check your email and cannot be used for research or reference purposes. 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. Secondly governments from all parties adhere to the treaties made by the previous governments. 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. It must look at regulations and law in each of countries that they operate in. We're here to answer any questions you have about our services. 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). Warning! All rights reserved. Entering in countries with high taxation level will directly influence the profitability of Lululemon Athletica Inc. High taxation affects international trade and prevents exports. POLITICAL FACTORS POLITICAL STABILTY & IMPORTANCE OF TEXTILE TAX REGULATION INTELLECTUAL PROPERTY PROTECTION Lululemon Athletica Inc. High political stability provides a WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. This gives Lululemon a lot of choice in picking who they want to buy supplies from. 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. The organization may also study the industry specific taxation policies to understand the host government's priorities and interest in developing industries. Free resources to assist you with your university studies! Similarly, it is important to understand the industry lifecycle stage. 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. Lululemon Athletica Inc. can benefit from it and invest in renewable technologies to ensure long-term sustainability. You can download Excel Template of PESTEL / PEST / STEP Analysis & Solution of Lululemon Athletica Inc. Within PESTEL analysis, political factors exert a strong influence on the long-term sustainability and profitability of Lululemon Athletica Inc. Attitude towards immigration has come under sharp focus. And change their design with the change of fashion. Political environment and other factors not only impact the cost of doing business but also long term sustainability. Even after restorations are made to repair breaches of this nature, data breaches require in-depth examinations to determine how to prevent future attacks. Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnr, P. (2011). Environmental factors are fast gaining traction not only among consumers but also among regulators and policy makers. Tax level set for businesses by government have direct effect for how profitable the Lululemon company is. Proposal, Question Starting just $19. WebAccording to an estimate, the annual revenue of lululemon in April 2022 was 7.468 billion dollars, and it has increased by 27.5%. 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. Patents are very important in Lululemon operation to have advantage of their competitor. to get Coupon Code. In Lululemon Athletica SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are Lululemon Athletica should assess to what level the local market is prepared to roll out the 5G connectivity. (2015). 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. Strategy planning process often requires five steps WebThe PESTEL analysis is one of the management assessment methods from various points of view of political , economic , social , technological , environmental , and legal . - Consumer Disposable Income The household income of the country has increased constantly in the last decade and half, compare to the USA market where household income is still below 2007 levels and not increased in real terms since early 1980s. Fern Fort University. It requires Lululemon Athletica Inc. to prioritize and focus on marketing the eco-friendly nature of their products over customary value propositions. 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. It is an High unemployment signals the availability of surplus labor at comparatively lower wages. Some examples of environmental factors that Lululemon Athletica Inc. need to consider are given below. 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. Detailed environmental analysis is imperative before deciding to enter a new market or start a new product line. 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. Study for free with our range of university lectures! It can lead to uncertainty and suppression of consumption in both short term and long term. Buy Professional PPT templates to impress your boss. 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. (2016). Bureaucracy and corruption negatively influence the business environment. DCLL PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Lululemon Athletica Inc.. - 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. 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. Explain and justify your rating. - 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. 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). 24-27). Info: 1099 words (4 pages) PESTEL Example Such an attack could take Lululemon's digital marketplace offline temporarily or cause permanent damage to its information assets (Lululemon, 2017). Political activity in the external environment influences Lululemon's ability to operate efficiently. The gender composition of labor market is a good indicator of disposal income of household, priorities of the households, and related needs. WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. (2012). 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. Soon, trusts became a new form limiting competition. Lululemon Athletica can leverage such a situation to hire the best people in business. 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. Integrity, Essay Writing Integrity, Marketing strategy of Lululemon Athletica Inc, Lululemon Athletica Inc Case Analysis and Case Solution, Lululemon Athletica Inc Case Study Solution. 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). This will help in better predicting the environment policy of the country. Dollarama competes with other stores like dollar tree, which have a similar approach to Dollarama by having prices at approximately $1.25. Lululemon Athletica Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. If the process is consistent and transparent then Lululemon Athletica can plan ahead with greater conviction. Economic 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. - Government Regulations and Deregulations The government is adhering to all the rules and regulations under World Trade Organization norms. 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