In certain countries where Lululemon operates, political corruption could become a problem since there are fewer opportunities for recourse in the regions. Company need to have patent in all countries that they operate to ensure their unique value. The environmental standards, laws and regulations vary across different markets. If you need help with something similar, 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. Article continues after ad 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. 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. Lululemon operates at wide range of market. Lululemon Athletica Inc. must consider these factors to ensure compliance with consumer protection laws. Product labeling and other requirements in Textile - Apparel Clothing. Such changes can also influence the consumers' spending patterns, causing the organization to revise its product and marketing strategies. - Government Spending As mentioned in the political factors, government of the country is running deficit budgets. 3. Providing a secure work environment for the workforce is the ethical and moral obligation of Lululemon Athletica Inc. 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). The GDP growth rate will determine the Lululemon Athletica Inc.s ability to pursue its long-term growth strategies. Scope of the Report of Sports Bra and Underwear 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. Lululemon Atheltica. But often in emerging countries these agencies delay the process as a tactic to extract bribes. Since 1960, the company encountered continued financial losses until The Limited purchased it in 1988, when Michael Jeffries became president and chief executive of A&T launching the trademark slogan casual luxury, new style of Abercrombie. 2. This is due to brand loyalty that each brand possesses by each luxury group. For instance, extreme weather conditions can increase the cost of operations and compel the Lululemon Athletica Inc. to make the value chain more flexible. Factors influencing consumers' purchase intention of green sportswear. What is PESTEL Analysis & its significance for Lululemon. (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. 5. While micro environment factors such as competition norms impact the competitive advantage of the firm. 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. Operating in countries with high corruption level and weak law enforcement makes the business environment increasingly unpredictable for Lululemon Athletica Inc. due to jeopardized public trust on business organizations and overall political and economic structure. 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. Lululemon Athletica Inc. must study and predict the labor market conditions to understand how it can attract talented workers and leverage their skills to improve business performance. WebLululemon Athletica Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. 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 Changes in weather and climatic conditions can influence business efficiency. Natural disasters in South East Asia and South Asia especially a concern because 82% Service, Dissertation 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. Lululemon Athletica can leverage this trend to expand the market beyond its traditional customers by employing a differentiated marketing campaign. Near the end of November 2013, Lululemon Athletica (Lululemon) became the subject of a viral firestorm after a series of negative events seriously ruptured the company's reputation. Sustainable business strategies and PESTEL framework. As mentioned, marketers cannot control the factors of the external environment. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Taxi industry is now dominated by players like Uber and Lyft. We make the greatest data maps. Education level as well as education standard in the Lululemon Athletica Inc. s industry, Culture (gender roles, social conventions etc.). Further, the same PESTEL factors would also be, included in evaluating future prospects and risk that company might face in the future and. Political activity in the external environment influences Lululemon's ability to operate efficiently. A firm should not only do technological analysis of the industry but also the speed at which technology disrupts that industry. Intellectual property regulations are designed to protect the companies' patents and valuable ideas. Yksel, I. For example Uber employment system is not consistent with French laws and it is facing challenges in the country. 4. Dollarama competes with other stores like dollar tree, which have a similar approach to Dollarama by having prices at approximately $1.25. Developing a multi-criteria decision making model for PESTEL analysis. Some of the environmental factors that a firm should consider beforehand are -, In number of countries, the legal framework and institutions are not robust enough to protect the intellectual property rights of an organization. Technology' is the fourth factor of PESTEL analysis. Customer Loyalty Program Create a customer loyalty points systems for purchases. Inability to protect intellectual property rights can result in losing competitive advantage, which may weaken the positioning of Lululemon Athletica Inc. against other market players. Andr Cavalcante, S. (2013). Industrial safety regulations in the Consumer Goods sector. 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. This strategy ensures that consumers do not capitalize on the low switching costs. - Empowerment of Supply Chain Partners Lululemon Athletica should analyze areas where technology can empower supply chain partners. - 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 political environment of a country comprises multifaceted factors. Particularly put extensive brand portfolio to cover different customer segments. Studying and forecasting the consumers purchasing power based on relevant economic indicators is important to analyze the customers interests and spending patterns. The growing environmental pollution coupled with technological advancement has compelled business organizations to adopt innovative recycling and waste management practices. Help, Academic It will help Lululemon Athletica in both developing environmentally friendly products and thwarting PR stumble blocks. DCLL Buy Professional PPT templates to impress your boss. Frequent changes in government policies harm business performance by increasing environmental uncertainty. Our model papers and solutions are purely meant for Developing international strategies. - 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. 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. If there is huge income inequality in the society then the likelihood of conflict and crime increases. - Demand Shifts from Goods Economy to Service Economy The share of services in the economy is constantly increasing compare to the share of manufacturing, goods, and agriculture sector. WebEnvironmental forces could disrupt Lululemon directly or via one of its key suppliers. The rapid technological advancement and technological diffusion across the globe have increased the importance of understanding technological factors during the strategic decision making process. - Transparency in Judiciary System & Processes Transparency is essential for fair and consistent decision making. Competition Levels Starting just $19. 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. - 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. The external environment includes opportunities and threats which can impact on the marketing strategy of Huawei. The advent of social media and e-commerce has encouraged online shopping behavior among customers. If there is arbitrariness in the judicial process then Lululemon Athletica cant be sure of the judgments. - Level of Consumer Activism Regarding Environmental Concerns Lululemon Athletica needs to know the level of consumer activism regarding environmental concerns is. - Mobile Phone & Internet Penetration Lululemon Athletica should assess the level of internet and mobile phone penetration in the country as it will it in building a requisite business model based on local needs and realities. PESTEL analysis is mainly the assessment of macro environment factors. 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. Lululemon Athletica Inc. can closely analyze the following factors before entering or investing in a certain market-. Subscribe now to get your discount coupon *Only Some examples of environmental factors that Lululemon Athletica Inc. need to consider are given below. If the legal system is not strong then Lululemon Athletica can face numerous challenges from consumer petitions to shakedowns from authorities. Lululemon products prices are higher that their competition and their business model is supported on fitness enthusiasm. Thank you for your email subscription. Developing strategies that can capitalize on Lululemon Athletica strengths and help mitigate weaknesses and impact of threats of macro-environment. Finally, the exchange rate fluctuation can also influence the profitability and international trade. 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). These rules can have a direct role in creating the strategies and approaches. 4. Academic writing has no room for errors and mistakes. Similarly a lot of European countries give healthy tax breaks to companies that operate in the renewable sector. 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. - 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. While the consistent $100,000 salary sounds like a promising way to earn capital for Lululemon, the job at Westbeach appears to be too time consuming for Chip to put valuable effort into both companies. Economic factors that Lululemon Athletica Inc. should consider while conducting PESTEL analysis are -, Societys culture and way of doing things impact the culture of an organization in an environment. Huawei, being a multinational company is affected by the external business environment. All work is written to order. The presence at international stage increases the companys sensitivity to changes in political environments of different countries. Use research as, 1. Rate each of the forces (High, Medium, or Low). Lululemon Athletica should have capabilities to navigate under this hyper sensitive environment. Lululemon Athletica Inc. cannot enter a new market without studying in detail the legal environment and regulatory structure of the new consumer market. Lululemon Athletica Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Lululemon Athletica Inc.. Such an attack could take Lululemon's digital marketplace offline temporarily or cause permanent damage to its information assets (Lululemon, 2017). PESTLE analysis Political Lululemon operates at wide range of market. 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. In addition, the company's chief executive officer had stepped down. Government policies supporting active and healthy lifestyle can have effect on Lululemon. Soon, trusts became a new form limiting competition. Company profile: Lululemon Athletica, Inc. Nam, C., Dong, H., & Lee, Y.-A. Copyright, patents / Intellectual property law. Strategically leveraging corporate social responsibility: A corporate branding perspective. 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. Explain. WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. Use of social media has become common in a modern business environment. In a political context, the key to success in a dynamic international business environment is to diversify the systematic risks. Ranging from political factors to environmental factors, each factor comprises various variables that influence the strategic decision making process of business organizations like Lululemon Athletica Inc. Aithal, P. S. (2017). 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? after sometime converse launch the denim ,t-shirts cap and everything related to sports. Out of which, the net income of the sportswear - Influence and Effectiveness of Environmental Agencies The role of environment standards enforcement agencies is critical in safeguarding norms. It is opportunity for Lululemon. - Inequality Index / Ranking on Gini Index Gini Index and level of inequality are a great barometer for harmony and development of a society. Lululemon Athletica Inc. PESTEL analysis is a strategic tool to analyze the macro environment of the organization. The brand has demonstrated a strong development during the past years with around 818 stores worldwide, estimated at August 2015, (Fast retailing, 2014) and now, they are planning for an expansion to Vietnam market. 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. (2016). 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. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. High unemployment signals the availability of surplus labor at comparatively lower wages. (Ed.). Political factors also comprise of laws, activities and groups that impact and limit companies and individuals in a certain culture and society. . 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). Detailed environmental analysis is imperative before deciding to enter a new market or start a new product line. 24-27). 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. Lululemon Athletica Inc. should develop local teams and develop local partnerships for understanding the societal attitudes and norms to tailor marketing strategies according to unique cultural context. Technological innovations like this can bring major transformations in the industry and reset the success rules for market players. Their competition and their business model is supported on fitness enthusiasm a similar approach to dollarama by having prices approximately! Influencing consumers ' spending patterns environment factors such as competition norms impact the competitive of. 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