International Journal of Applied Engineering and Management Letters (IJAEML), 1(2), 78-97. Patents are very important in Lululemon operation to have advantage of their competitor. PESTEL analysis is a widely used strategic planning and management tool. WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. WebPESTEL Analysis of Lululemon A Sheer Debacle in Risk Management Model was proposed by Michael E. Porter in 1979. 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). Lululemon Athletica Inc. can use countrys economic factor such as growth rate, inflation & industrys economic indicators such as Textile - Apparel Clothing industry growth rate, consumer spending etc to forecast the growth trajectory of not only --sectoryname-- sector but also that of the organization. Academic writing has no room for errors and mistakes. 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). 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. Nobody get fired for buying our Business Reports Templates. correct email will be accepted, (Approximately If the process is consistent and transparent then Lululemon Athletica can plan ahead with greater conviction. PESTEL stands for Political, Social, Economic, 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. Alternatively, Lululemon's business activities abroad are also subject to the rule-making of local political leaders (Bertels, Koen, & Elsum, 2015). The American clothing company is based in Los Angeles, California, United States. European Journal of Innovation Management, 16(3), 285-300. Choosing the vision, mission and the - 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. 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. The first Converse All Star shoes was made in the middle 1900 as a shoes for basket ball players. The bond rating of national government is investment grade. The international presence of Lululemon Athletica Inc. require the organization to consider these differences to avoid undesired circumstances carefully. Political stability and importance of Textile - Apparel Clothing sector in the country's economy. Lululemon Athletica can leverage such a situation to hire the best people in business. Starting just $19. The purpose of this assignment is to give a close attention to the financial perspective of the Mdelic Wasatch Outerwear as we examine past and current financial data and evaluate company's performance and financial position. 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. High unemployment signals the availability of surplus labor at comparatively lower wages. Issa, T., Chang, V., & Issa, T. (2010). The data protection has become an important issue due to consumers privacy and security concerns. Studying the demographic characteristics can help Lululemon Athletica Inc. in choosing the right market segment/segments with high growth potential. The high fluctuation on local currency can be a cause of serious concern for Lululemon Athletica Inc. on WhatsApp for any queries. To achieve such aims, data were collected, reviewed and analyzed within the industry. It started an above average profitability operations in Argentina and made strong returns in 5-7 years. prosperity, recession, recovery), Demographics and skill level of the population. Chat with us Fern Fort University. The Feel free to connect with us if you need business research. Technological innovations like this can bring major transformations in the industry and reset the success rules for market players. - 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. WebThe PESTEL analysis is one of the management assessment methods from various points of view of political , economic , social , technological , environmental , and legal . (2017). The business and marketing strategies are also influenced by migration. - Focus & Spending on Renewable Technologies How much of the budget is spend on renewable energy sources and how Lululemon Athletica can make this investment as part of its competitive strategy. 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. 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. The presence at international stage increases the companys sensitivity to changes in political environments of different countries. The political factors play a huge role in not only investment decision by transnational corporations but also by companies such as Lululemon Athletica. Entering in mature industries can be more challenging due to market saturation than industries at the growth stage. - Nature of Social Contract between Government & Society Before entering into a market Lululemon Athletica needs to understand the nature of social contract between government and society. Course Hero is not sponsored or endorsed by any college or university. Technology' is the fourth factor of PESTEL analysis. - Independence of Judiciary and Relative Influence of Government The judiciary independence often reflect both strength and credibility of the institutions in the country. Entrepreneurial spirit and broader nature of the society. Free resources to assist you with your university studies! Key Takeaways The Lululemon SWOT analysis shows that the company needs to improve its business and survive in the current sports apparel market. Nordstrom can closely analyze. Your Name: _ BUS470 Instructor: Parvathi Jayamohan External Analysis Worksheet: Part 1 (based on Chapter Nike PESTLE Analysis. Lululemon Athletica Inc. should carefully analyze the protests by pressure groups, social/environment activists and worker unions as such protests play an important role in the policy making process. Similarly, it is important to understand the industry lifecycle stage. WebSociological Analysis Of Lululemon 191 Words | 1 Pages. They There is consistency in both policy making and implementations of those policies. As mentioned, marketers cannot control the factors of the external 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. 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. Check your email IEEE. But the business was later expropriated by the Left Wing government. 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). Lululemon Athletica should assess what are preferred choice of mobile payments in local economy and chose the business model based on it. submission, reproduction, or any other misuse in any manner. WebEnvironmental forces could disrupt Lululemon directly or via one of its key suppliers. - Types of Immigration & Attitude towards Immigrants Given the latest developments such as Brexit and Immigrant detention on Southern border of United States. Intellectual property regulations are designed to protect the companies' patents and valuable ideas. Finally, the exchange rate fluctuation can also influence the profitability and international trade. 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. These rules can have a direct role in creating the strategies and approaches. - Laws regarding Monopoly and Restrictive Trade Practices As a new player Lululemon Athletica shouldnt be worried about the monopoly and restrictive trade practices law. Lululemon is fast growing company that open stores or franchise in market such as America, Japan, Australia and Europe. PESTEL stands for - Political, Economic, Social, There are many suppliers competing for retailers business. 5. please submit your details here. Like all businesses they are sensitive to economic situation on global and local markets. Why consumers' aesthetic sensitivity matters in apparel design evaluation. If you have BIG dreams to score BIG, think out This critique is a reflection of Strategic Industry Analysis of clothing Industry in United Kingdom, Italy and France. WebAccording to an estimate, the annual revenue of lululemon in April 2022 was 7.468 billion dollars, and it has increased by 27.5%. It pressurizes the Lululemon Athletica Inc. to develop new products quickly, increase product range diversity, integrate flexibility into the value chain and develop healthy business relationships with value chain partners. academic writing services at least once in their lifetime! Each society has distinctive norms and values that play an important role in shaping consumer behavior. - Research and Development Investment Levels If there is high level of investment in technology development sector then there are high chances of building a self sustaining ecosystem that drives innovation. Lululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. 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. Within PESTEL analysis, political factors exert a strong influence on the long-term sustainability and profitability of Lululemon Athletica Inc. Huawei, being a multinational company is affected by the external business environment. Exploring strategy. Consequently, the employment of additional staff and procurement of new resources to control for technological threats is liable to generate additional expenses. While micro environment factors such as competition norms impact the competitive advantage of the firm. Lululemon Athletica Inc. should invest time on understanding the consumption motivations and social trends that define the consumption behavior. 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. PESTEL analysis is mainly the assessment of macro environment factors. Published by HBR Publications. Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. Currently, Lululemon Athletica Inc. is present in different countries, each having own political tensions. - Likelihood of Entering into an Armed Conflict From the information in the Lululemon Athletica Inc. case study, I dont think there is a likelihood of country entering into an armed conflict with a neighboring country. Revista ESPACIOS, 39(16). The growing environmental pollution coupled with technological advancement has compelled business organizations to adopt innovative recycling and waste management practices. Car industry is fast moving toward automation led by technology firm such as Google & manufacturing is disrupted by Tesla, which has stated an electronic car revolution. - Work Force Productivity Work force productivity in US has grown by 25-30 % in last two decades even though the salaries are not reflecting those gains. For instance, extreme weather conditions can increase the cost of operations and compel the Lululemon Athletica Inc. to make the value chain more flexible. In highly hierarchical societies the power of decision making often reside at the top. With growing market, there will be opportunity to grow. A well-developed infrastructure facilitates the business environment and increases the growth potential of the gold industry in the respective country. 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. Legal is the sixth factor of PESTEL analysis. Efficiency of financial markets Does Lululemon Athletica Inc. needs to raise capital in local market? - Birth Rate Birth rate is also a good indicator of future demand. International business. Posted by Zander Henry on For example Uber employment system is not consistent with French laws and it is facing challenges in the country. 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. This gives Lululemon a lot of choice in picking who they want to buy supplies from. PES ANALYSIS.docx. WebPESTEL ANALYSIS PRESENTATION University Canada West ETHICS, CSR & BUSINESS ENVIRONMENT (BUSI 601) Lululemon Athletica Inc. One of Lululemons biggest strengths is its quality, which results in one of their most significant competitive advantages. - 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. Environmental forces could disrupt Lululemon directly or via one of its key suppliers. Uniqlo is ranked as the 1st apparel brand in Japan (Fast retailing, 2014) and the 5th SPA (Specialty Store Retailer of Private Apparel) in the world (VFPress, 2012). Many countries have placed strict norms to protect their urban areas through effective waste management. If you need help with something similar, Use of social media has become common in a modern business environment. Nordstrom is operating in apparel stores in more than dozen countries and exposes itself to different types of political environment and political system risks. Lululemon Athletica Inc. must study the specific environmental regulations of the country under consideration to understand which resources (like water, electricity etc.) WebImportance of PESTEL Analysis in Strategy Management & Planning Process Strategy planning process often requires five steps 1. 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. 3. Some of the technology trends that are impacting the macro environment are developments in artificial intelligence, use of machine learning and big data analytics to predict consumer behavior, growing importance of platforms over service providers etc. 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). Accordingly, we never encourage or endorse its direct Provide a rationale for why you have selected this community in relation to, PartA Identify a community ( Aboriginal and Torres Strait Islander community ) of your choice within Australia, including the key characteristics of your chosen community. 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. Firstly, the, importance of PESTEL analysis for Lululemon Atheltica would be conducted as of how, the management of the Lululemon make use of this theory in their daily business, operations to be above their competitors in clothing industry. This article is only an example Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. Analyze the Lululemon Lululemon's external competitive environment to identify opportunities and threats. It is an acronym for political, economic, social, technological, environmental and legal factors that shape the macro business environment. 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