Desai, K. J. In the 1920 Chuck Taylor turned into the representative for Converse and for the following couple of decades the Converse tennis shoes was the main shoes in basket ball. The GDP growth rate will determine the Lululemon Athletica Inc.s ability to pursue its long-term growth strategies. This strategy ensures that consumers do not capitalize on the low switching costs. Government policies supporting active and healthy lifestyle can have effect on Lululemon. Revista ESPACIOS, 39(16). 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. 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). and they got success as well but they continue with their same design so after some time all people avoid the brand product because there is a huge competition in the market because lots of company 's available to compete for example Nike, Adidas, puma ,Reebok ,etc these are the company 's they always change their product with the fashion. - 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. The growing use of mobile phones and social networking sites must be considered when developing marketing and communication strategies. This investment will also increase stakeholder satisfaction and expand the customer base due to enhanced brand image. With that being taken away, they will be put 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. Key Takeaways The Lululemon SWOT analysis shows that the company needs to improve its business and survive in the current sports apparel market. Soon, trusts became a new form limiting competition. Research and development activities are highly important in an environment characterized by creative disruption. 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. - 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. 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. Issa, T., Chang, V., & Issa, T. (2010). IGI Global. 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. In some societies, consuming the offered product is considered a status symbol, while, some people use the same products for functional aspects. Copyright 2023 IPL.org All rights reserved. Proposal, Assignment Writing The organization may also study the industry specific taxation policies to understand the host government's priorities and interest in developing industries. Also, it can ensure the quality of the products. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. - Demographic Trend The demographic trend is one of the key factors in demand forecasting of an economy. Nobody get fired for buying our Business Reports Templates. Aug-22-2018. Government intervention in the free market and related Consumer Goods. Anti-trust law in Textile - Apparel Clothing industry and overall in the country. 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. 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. A framework for PEST analysis based on fuzzy decision maps. 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 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. 2. Developing strategic business models and competitive advantage in the digital sector. Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. The corruption can influence various business operations, ranging from licensing, contracting, fraudulent deals to frequent lawsuits. Today, new products are developed quickly, and supply chain partners have also gained more power. Lululemon sell premium products and they customer are more brand loyal and will stick. However, when there is political chaos, it deters the investors and harms the stakeholders' trust in economic and consequent organizational performance. This is due to brand loyalty that each brand possesses by each luxury group. Political Moreover, there are laws to set the maximum price, ensure a certain quality standard and protect consumers from fraudulent marketing claims. Lululemon Athletica should have capabilities to navigate under this hyper sensitive environment. Wall, S., Minocha, S., & Rees, B. are considered rare or which species are endangered whose excessive consumption can cause trouble for the organization. As such, Lululemon should temper its expansion efforts with risk management and scenario planning strategies to account for known and hypothetical political threats. The gender composition of labor market is a good indicator of disposal income of household, priorities of the households, and related needs. Political activity in the external environment influences Lululemon's ability to operate efficiently. Entrepreneurial spirit and broader nature of the society. Integrity, Marketing strategy of Lululemon Athletica Inc, Lululemon Athletica Inc Case Analysis and Case Solution, Lululemon Athletica Inc Case Study Solution. The adoption of new technologies has shortened the lifecycle of new product development. WebSociological Analysis Of Lululemon 191 Words | 1 Pages. - Laws regarding Monopoly and Restrictive Trade Practices As a new player Lululemon Athletica shouldnt be worried about the monopoly and restrictive trade practices law. Even within a country often states can have different environmental laws and liability laws. - 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. Lululemon Athletica should assess what are preferred choice of mobile payments in local economy and chose the business model based on it. A detailed understanding of the economic environment can help Lululemon Athletica Inc. estimate the growth trajectory of industry and organization. Study for free with our range of university lectures! The demand and supply of labor determine the wage rates and supply of skilled workforce. Furthermore, A&F currently operates four other brands, which are: A&F, Abercrombie Kids, Hollister Company, and RUEHL. 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. 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. Climate change and changing ecosystem is leading to the extinction of more than 20% of species on the planet by the turn of this century. Technological innovations like this can bring major transformations in the industry and reset the success rules for market players. Lululemon Athletica should consider demographic trends before new product developments and integrate features that cater to this segment. Hou, J., Lu, Q., & Han, Y. Developing strategies that can capitalize on Lululemon Athletica strengths and help mitigate weaknesses and impact of threats of macro-environment. University of San Carlos - Main Campus. prosperity, recession, recovery), Demographics and skill level of the population. Lululemon Athletica Inc. can leverage the opportunities offered by social media marketing to improve business performance. International business. 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. A., & Gomez, o. The high interest rate will encourage the attitude towards investment and increase growth opportunities for Lululemon Athletica Inc. 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. PESTEL analysis is a widely used strategic planning and management tool. Technology' is the fourth factor of PESTEL analysis. - Preparedness for 5G Related Infrastructure Countries across the world are trying to prepare themselves to install 5G infrastructure. There are many suppliers competing for retailers business. Porter Five Forces Seifert, C. & Chattaraman, V. (2017). Definition of PESTEL / PEST / STEP Analysis. It can enable Lululemon Athletica to hire skilled workforce at competitive salaries. 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 Changes in weather and climatic conditions can influence business efficiency. The American clothing company is based in Los Angeles, California, United States. Explain and justify your rating. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. B., Vinoski, E. R., Warren-Findlow, J., Padro, M. P., Burris, E. N., & Suddreth, E. M. (2017). Thus significantly impacting the ability of Lululemon Athletica to build sustainable competitive advantage Bureaucracy and interference in Textile - Apparel Clothing industry by government. 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. 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. 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). 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. - Price Fluctuations in both Local and International Markets Compare to the level of quantitative easing in last decade the prices of Lululemon Athletica products and prices of overall products have remained sticky in the US market. - Transition of Government and Changes in Policy There is consistency in policy making from one government to another. 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). Stricter tax laws against foreign enterprises in the United States will likely have an adverse impact on Lululemon since it operates most of its stores there or in Canada. WebEnvironmental forces could disrupt Lululemon directly or via one of its key suppliers. so there is a big opportunities for converse from these companies. You can download Excel Template of PESTEL / PEST / STEP Analysis & Solution of Lululemon Athletica Inc. Lululemon Athletica should be aware of presence of such practices in a country. WebPESTEL Analysis is a strategic management tool that Lululemon Athletica management can use to make better decisions. According to Michael Porter organizational performance is to large extend determined by various industry forces. If you have BIG dreams to score BIG, think out Below is a demonstration 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. Vallester, C., Lindgreen, A., & Maon, F. (2012). Huawei, being a multinational company is affected by the external business environment. Changes in macro environment forces can impact the Porter Five Forces & industry attractiveness. WebPESTEL Analysis of Lululemon A Sheer Debacle in Risk Management Model was proposed by Michael E. Porter in 1979. Pestel Analysis And Pest Analysis: American Apparel 2014 Words | 9 Pages. - Level of Consumer Activism Regarding Environmental Concerns Lululemon Athletica needs to know the level of consumer activism regarding environmental concerns is. Labor costs and productivity in the economy, Business cycle stage (e.g. And change their design with the change of fashion. and cannot be used for research or reference purposes. academic writing services at least once in their lifetime! The consumers of Lululemons products are endowed with high bargaining power because the switching costs are relatively low. Social factors that leadership of Lululemon Athletica Inc. should analyze for PESTEL analysis are -, Technology is fast disrupting various industries across the board. A firm should carefully evaluate before entering such markets as it can lead to theft of organizations secret sauce thus the overall competitive edge. Scope of the Report of Sports Bra and Underwear - 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. Out of which, the net income of the sportswear 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. Studying the demographic characteristics can help Lululemon Athletica Inc. in choosing the right market segment/segments with high growth potential. Detailed environmental analysis is imperative before deciding to enter a new market or start a new product line. Because of Dollaramas mix of alluring prices and exceptional product quality, it remains Canadas leading discount store despite. Use research as, 1. The political environment of a country comprises multifaceted factors. 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). Political environment and other factors not only impact the cost of doing business but also long term sustainability. Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnr, P. (2011). 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). To conclude, the PESTEL model is an important business tool that involves a detailed analysis of macro-environmental factors that shape the business environment. ), Recent technological developments by Lululemon Athletica Inc. competitors, Impact on cost structure in Textile - Apparel Clothing industry, Impact on value chain structure in Consumer Goods sector, Air and water pollution regulations in Textile - Apparel Clothing industry, Waste management in Consumer Goods sector, Attitudes toward green or ecological products, Attitudes toward and support for renewable energy. It is opportunity for Lululemon. It is important for Lululemon Athletica Inc. to understand economic factors such as foreign exchange/interest rate, labor market conditions, inflation and saving rates etc. With growing market, there will be opportunity to grow. In certain countries where Lululemon operates, political corruption could become a problem since there are fewer opportunities for recourse in the regions. MarketLine. For example as the population of USA and EU is growing old the demand for products mostly catering to this segment will grow. Buy Professional PPT templates to impress your boss. Info: 1099 words (4 pages) PESTEL Example 4. - 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. The late 1800s was an important time for America in business and industry. *You can also browse our support articles here >. Taxi industry is now dominated by players like Uber and Lyft. If you need help with something similar, It requires Lululemon Athletica Inc. to prioritize and focus on marketing the eco-friendly nature of their products over customary value propositions. Cycle stage ( e.g in business and industry political activity in the regions of... Have different environmental laws and liability laws powerful labor unions anti-trust law in Textile - Clothing... 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