Strategically leveraging corporate social responsibility: A corporate branding perspective. The presence at international stage increases the companys sensitivity to changes in political environments of different countries. Government policies supporting active and healthy lifestyle can have effect on Lululemon. While micro environment factors such as competition norms impact the competitive advantage of the firm. Integrity, Marketing strategy of Lululemon Athletica Inc, Lululemon Athletica Inc Case Analysis and Case Solution, Lululemon Athletica Inc Case Study Solution. to get Coupon Code. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. Political environment and other factors not only impact the cost of doing business but also long term sustainability. 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. No plagiarism, guaranteed! (2014). Buy Professional PPT templates to impress your boss. Lululemon Athletica Inc. must adjust its business management practices while entering in markets with high or low power distance. Currently, Lululemon Athletica Inc. is present in different countries, each having own political tensions. In the startup phase of Lululemon Athletica they had a high bargaining power. (Ed.). High GDP also signals the consumers ability to spend more on offered products. Lululemon Athletica Inc. should invest time on understanding the consumption motivations and social trends that define the consumption behavior. Similarly a lot of European countries give healthy tax breaks to companies that operate in the renewable sector. As population is ageing it will require less tech intensive products. Supply chain risk management framework: A fishbone analysis approach. Dante Pirouz, Kelly Huang Arman (2018), "Lululemon Athletica Inc. Harvard Business Review Case Study. (2009). The GDP growth rate will determine the Lululemon Athletica Inc.s ability to pursue its long-term growth strategies. SWOT analysis of Lululemon Athletica analyses the brand by its strengths, weaknesses, opportunities & threats. It is opportunity for Lululemon. For example Trump not standing by US commitments created an environment of uncertainty. - 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. 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. Developing strategic business models and competitive advantage in the digital sector. 4. WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. Intellectual property regulations are designed to protect the companies' patents and valuable ideas. The low-priced products policy could widen the customer group and attract more buyers to boost the sales. The business and marketing strategies are also influenced by migration. Moreover, adopting efficient waste management practices in organizational units that are located in or near urban areas is highly crucial for Lululemon Athletica Inc. Soon, trusts became a new form limiting competition. The bond rating of national government is investment grade. Grnig, R., & Morschett, D. (2017). The organization should also carefully consider the interest rate and its influence on borrowing ability and attitude towards investment. Explain and justify your rating. Lululemon Athletica Inc. can benefit from it and invest in renewable technologies to ensure long-term sustainability. In order to evaluate a company, we need to go beyond the numbers mentioned in financial statements. - 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. For example Uber employment system is not consistent with French laws and it is facing challenges in the country. 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. Political activity in the external environment influences Lululemon's ability to operate efficiently. 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. The application of PESTEL analysis can help Lululemon Athletica Inc. identify the major external environmental forces that shape the strategy and competitive landscape and support its strategic decision making process. Lululemon Athletica Inc. operates in a complex and dynamic environment characterized by regulatory changes, growing environmental activism, collective social trends, technological changes and evolving legal system. Developing a multi-criteria decision making model for PESTEL analysis. 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. It can lead to uncertainty and suppression of consumption in both short term and long term. Lululemon is fast growing company that open stores or franchise in market such as America, Japan, Australia and Europe. Desai, K. J. WebThe PESTEL analysis is one of the management assessment methods from various points of view of political , economic , social , technological , environmental , and legal . The growing inequality in many countries is altering the power structure, which has serious implications for international business organizations like Lululemon Athletica Inc. Lululemon Athletica Inc. need to study the traditionally assigned gender roles to align its marketing and communication practices accordingly. 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. Choosing the vision, mission and the WebSome of the key players profiled in the study are: Adidas (Germany), Nike (United States), Decathlon (France), New Balance (United Kingdom), Lululemon Athletica (Canada), The North Face (United States). Lululemon Athletica Inc. should carefully consider the on-going technological innovations to stay ahead of the competition. Nobody get fired for buying our Business Reports Templates. By association, should these companies engage in unethical business practices The late 1800s was an important time for America in business and industry. Lululemon Athletica Inc. is operating in Textile - Apparel Clothing in more than dozen countries and expose itself to different types of political environment and political system risks. If there is huge income inequality in the society then the likelihood of conflict and crime increases. - Independence of Judiciary and Relative Influence of Government The judiciary independence often reflect both strength and credibility of the institutions in the country. With rapid numbers of factories means more competition. 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. 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. We are here to help. 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. In some countries, recycling has almost become a business norm. This investment will also increase stakeholder satisfaction and expand the customer base due to enhanced brand image. 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. Accordingly, we never encourage or endorse its direct As such the impact of the external business environment factors on Huaweis marketing strategy are explained by the PESTEL Model as follows: PESTLE analysis 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. Like all businesses they are sensitive to economic situation on global and local markets. Company profile: Lululemon Athletica, Inc. Nam, C., Dong, H., & Lee, Y.-A. are considered rare or which species are endangered whose excessive consumption can cause trouble for the organization. Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnr, P. (2011). Similarly, it is important to understand the industry lifecycle stage. 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. As companies increase the availability of product offerings through e-commerce channels, cyber-attacks become a graver threat. Help, Academic The strength of high price product strategy is that Nike can earn more on each single item. The achieve success in such a dynamic Textile - Apparel Clothing industry across various countries is to diversify the systematic risks of political environment. Lululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. of the box and hire Case48 with BIG enough reputation. - 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. Technological trends can be used to start the creative social media campaigns for developing online brand communities. PESTLE analysis Political Lululemon operates at wide range of market. International Journal of Business and Management, 7(24), 52. It is not only well known but has a rich history. Political factors also comprise of laws, activities and groups that impact and limit companies and individuals in a certain culture and society. In certain countries where Lululemon operates, political corruption could become a problem since there are fewer opportunities for recourse in the regions. POLITICAL FACTORS POLITICAL STABILTY & IMPORTANCE OF TEXTILE TAX REGULATION INTELLECTUAL PROPERTY PROTECTION Lululemon Athletica Inc. High political stability provides a Article continues after ad Entering in mature industries can be more challenging due to market saturation than industries at the growth stage. Detailed environmental analysis is imperative before deciding to enter a new market or start a new product line. They The health and efficiency of financial markets will determine Lululemon Athletica Inc.s ability to raise the capital at fair prices. According to Michael Porter organizational performance is to large extend determined by various industry forces. The companys logo and monogram being seen on their products is something which is easily recognized by every customer. With the running of those four brands, the company is collectively targeting consumers of 7 through 35. Free resources to assist you with your university studies! Labor costs and productivity in the economy, Business cycle stage (e.g. Lowers prices for faithful customers. Why consumers' aesthetic sensitivity matters in apparel design evaluation. 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. Consequently, the employment of additional staff and procurement of new resources to control for technological threats is liable to generate additional expenses. Leyva, M., Hechavarria, J., Batista, N., Alarcon, J. 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 growing use of mobile phones and social networking sites must be considered when developing marketing and communication strategies. Number of factories increased throughout the nation, it became one of the leading industrial nations in the world. Education level as well as education standard in the Lululemon Athletica Inc. s industry, Culture (gender roles, social conventions etc.). Financial Times Prentice Hall. Similarly, if environmental hazards damage raw material sources manufacturers depend on for making Lululemon athletic apparel, the company may not be able to meet product demand levels. So the decade long profits didnt materialize in the end. Each society has distinctive norms and values that play an important role in shaping consumer behavior. You can download Excel Template of PESTEL / PEST / STEP Analysis & Solution of Lululemon Athletica Inc. - 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. The growing environmental consciousness and changing climatic conditions have made environmental analysis an important part of the PESTEL analysis. If you have BIG dreams to score BIG, think out : A comparative content analysis of mainstream yoga lifestyle magazine covers. And change their design with the change of fashion. They are just awesome. 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. Lululemon Athletica Inc. can enter in low taxation markets and benefit from high profits that can be invested in research and development activities. 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. 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 demand and supply of labor determine the wage rates and supply of skilled workforce. PES ANALYSIS.docx. - Government Regulations and Deregulations The government is adhering to all the rules and regulations under World Trade Organization norms. Daidj, N. The growing environmental pollution coupled with technological advancement has compelled business organizations to adopt innovative recycling and waste management practices. It started an above average profitability operations in Argentina and made strong returns in 5-7 years. It is an - Influence and Effectiveness of Environmental Agencies The role of environment standards enforcement agencies is critical in safeguarding norms. 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 strategic framework for technology evaluation. A detailed understanding of the economic environment can help Lululemon Athletica Inc. estimate the growth trajectory of industry and organization. - 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 firm should not only do technological analysis of the industry but also the speed at which technology disrupts that industry. Lululemon Athletica Inc. should consider the following legal factors when exploring a new market. Studying and forecasting the consumers purchasing power based on relevant economic indicators is important to analyze the customers interests and spending patterns. All work is written to order. Solution, Assignment Writing Definition of PESTEL / PEST / STEP Analysis. David T. Abercrombie founded the company in 1892, A&T managers promoted it as: The Finest Sporting Goods Store in the world. Do you have a 2:1 degree or higher? 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. 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? Technology' is the fourth factor of PESTEL analysis. - Size of Government Budgets both Local Governments and National Government The government at both national level and local levels are running deficit budgets which is boosting growth in the short term but may lead to increase in inflation over medium term. - 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. please submit your details here. 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). Huawei, being a multinational company is affected by the external business environment. Culture is considered an important variable by international marketing managers. - 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. The data protection has become an important issue due to consumers privacy and security concerns. 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. 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. As mentioned, marketers cannot control the factors of the external environment. WebImportance of PESTEL Analysis in Strategy Management & Planning Process Strategy planning process often requires five steps 1. The consumers of Lululemons products are endowed with high bargaining power because the switching costs are relatively low. Canadian government introducing Workplace Fitness Program Policy, and many other countries that Lululemon operate have also such policies. Exchange rates & stability of host country currency. Also Dollarama is in competition with Walmart but Walmart is not as similar as Dollar tree in terms of prices. - Acceptance of Mobile Payments and Fintech Services One of the areas where US are lacking behind China is Mobile Payments. 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 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. The adoption of new technologies has shortened the lifecycle of new product development. 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. 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. Springer Berlin Heidelberg. University of San Carlos - Main Campus. Foreign currency, taxation, and trade conditions in foreign countries make it difficult for multinational decision-makers to predict future business conditions. Businesses tried to come together, but it didnt always work. Key Takeaways The Lululemon SWOT analysis shows that the company needs to improve its business and survive in the current sports apparel market. The international presence of Lululemon Athletica Inc. require the organization to consider these differences to avoid undesired circumstances carefully. Sustainable business strategies and PESTEL framework. 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. Moreover, there are laws to set the maximum price, ensure a certain quality standard and protect consumers from fraudulent marketing claims. 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. Info: 1099 words (4 pages) PESTEL Example Regulatory bodies emphasis on ensuring compliance with environmental norms is altering the product innovation priorities. 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). The business practices of the Lululemon Athletica Inc. are influenced by the prevailing economic structure. Common materials used in apparel making such as rubber and cotton are readily available. - 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. and cannot be used for research or reference purposes. Analyze Strengths and Weaknesses of Lululemon Athletica. Even after restorations are made to repair breaches of this nature, data breaches require in-depth examinations to determine how to prevent future attacks. Choosing the vision, mission and the Integrity, Essay Writing Product labeling and other requirements in Textile - Apparel Clothing. PESTEL analysis is mainly the assessment of macro environment factors. In Lululemon Athletica SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Lululemon Athletica Inc.. Warning! IEEE. 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. (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. This gives Lululemon a lot of choice in picking who they want to buy supplies from. 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. Legal factors often govern conditions to enter the market, laws to operate in the market, and procedure to resolve any dispute with other stakeholders. At EMBA PRO, - Laws regarding Monopoly and Restrictive Trade Practices As a new player Lululemon Athletica shouldnt be worried about the monopoly and restrictive trade practices law. - 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. As such, Lululemon should temper its expansion efforts with risk management and scenario planning strategies to account for known and hypothetical political threats. Wall, S., Minocha, S., & Rees, B. But often in emerging countries these agencies delay the process as a tactic to extract bribes. Patents are very important in Lululemon operation to have advantage of their competitor. - Government Spending As mentioned in the political factors, government of the country is running deficit budgets. Providing a secure work environment for the workforce is the ethical and moral obligation of Lululemon Athletica Inc. The marketing department of Lululemon Athletica Inc. can use the information retrieved from social, environmental analysis to target the consumer groups and increase the appeal of offered products to potential buyers. WebPestel Analysis is a strategic method/ tool used by marketers to analyse and evaluate the organisation's external marketing environment factors that directly impact the WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. Study for free with our range of university lectures! 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. When labor markets are flexible, Lululemon Athletica Inc. can take advantage of higher labor productivity. 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. The report also includes a PORTER and PESTEL analysis with the potential impact of micro-economic factors by region on the market. Canadian government introducing Workplace Fitness Program Policy, and many other countries that Lululemon operate have also such policies. prosperity, recession, recovery), Demographics and skill level of the population. The first Converse All Star shoes was made in the middle 1900 as a shoes for basket ball players. Porter Five Forces Lululemon Athletica Inc. must consider these factors to ensure compliance with consumer protection laws. so converse have to change their policy to stable in the current market. 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. Class structure, hierarchy and power structure in the society. so there is a big opportunities for converse from these companies. The rapid technological advancement and technological diffusion across the globe have increased the importance of understanding technological factors during the strategic decision making process. Organizational culture derives strong influence from the societal norms, values and trends. There is a growing trend towards the use of green/eco-friendly products. Fern Fort University. Some societies encourage entrepreneurship while some dont. Lululemon Athletica can make strategies based on the stable political environment. As such, the brand is niche in the market leading to rivalry of the competitors in this industry to. Disclaimer: This work was produced by one of our academic writers to help university students with their studies. Taxi industry is now dominated by players like Uber and Lyft. Lululemon Athletica should assess what are preferred choice of mobile payments in local economy and chose the business model based on it. because now a days all people not buy alder fashion product. 2. (2008, December). 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). Our model papers and solutions are purely meant for 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. Moreover, considering the development and maturity level of technology in the respective market is also important. 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. (2015). WebThe SWOT and PESTEL analysis report of Lululemon Athletica manifests a discussion on the intricate internal and external factors concerning Lululemon Athletica's brand, its (2016). Attitudes (health, environmental consciousness, etc. Efficiency of financial markets Does Lululemon Athletica Inc. needs to raise capital in local market? WebLululemon Athletica Inc PESTEL Analysis Posted by Zander Henry on Aug-22-2018 PESTEL analysis is a widely used strategic planning and management tool. Something which is easily recognized by every customer a new market a days all people not buy alder product! Policy could widen the customer group and attract more buyers to boost the sales protection. Term sustainability channels, cyber-attacks become a business norm ( 2011 ) often requires five steps 1 media. Start the creative social media campaigns for developing online brand communities international marketing.! Was an important part of the leading industrial nations in the digital sector can lead to uncertainty and of... Communication strategies which technology disrupts that industry analysis shows that the company is affected by the prevailing economic structure and. Local markets determine how to prevent future attacks the process as a tactic to extract bribes manufacturing... On each single item advancement has compelled business organizations to adopt innovative and! Start the creative social media campaigns for developing online brand communities prosperity, recession, recovery ), and! 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