PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors that impact the macro environment of Lululemon Athletica Inc.. With the running of those four brands, the company is collectively targeting consumers of 7 through 35. Yksel, I. The growing environmental consciousness and changing climatic conditions have made environmental analysis an important part of the PESTEL analysis. Lululemon Athletica should consider demographic trends before new product developments and integrate features that cater to this segment. 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). Buy Professional PPT templates to impress your boss. 24-27). WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. 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. International business. 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). (2008, December). 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. It will help Lululemon Athletica in both developing environmentally friendly products and thwarting PR stumble blocks. If the legal system is not strong then Lululemon Athletica can face numerous challenges from consumer petitions to shakedowns from authorities. Nike PESTLE Analysis.pdf. 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. The external environment includes opportunities and threats which can impact on the marketing strategy of Huawei. Operating in such a market can lower the production cost of Lululemon Athletica Inc. Pestel Analysis And Pest Analysis: American Apparel 2014 Words | 9 Pages. WebThe PESTEL analysis is one of the management assessment methods from various points of view of political , economic , social , technological , environmental , and legal . - 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. Abercrombie & Fitch brand focuses on offering apparel that reflected the youthful lifestyle for a target audience, which was college students, designed to encourage teamwork and creativity On February 2007, A&F retailer operated 944 stores in 49 States, District of Columbia and Canada. If there is arbitrariness in the judicial process then Lululemon Athletica cant be sure of the judgments. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. (Ed.). The business and marketing strategies are also influenced by migration. The implication for Lululemon Athletica is that it can boost sales of its product in short run but also expose Lululemon Athletica to medium term forex and currency depreciation risks. They are just awesome. 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. Explain and justify your rating. 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. If the process is consistent and transparent then Lululemon Athletica can plan ahead with greater conviction. Lululemon Athletica should assess to what level the local market is prepared to roll out the 5G connectivity. The Industrial Organization (I/O) approach advocates that for sustainable competitive advantage external factors are as important as internal factors of the Lululemon Athletica. Info: 1099 words (4 pages) PESTEL Example Academic writing has no room for errors and mistakes. correct email will be accepted, (Approximately 2. This report will provide useful information which can be guidelines for Uniqlos strategy to enter a new market. PES ANALYSIS.docx. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Economic factors of a country and region have a direct impact on the potential attractiveness of a given market. It is opportunity for Lululemon. as they determine the overall economic environment of the country. Hence, Lululemon Athletica Inc. should study how intellectual property rights are protected in the host country and make the business strategies accordingly. In the startup phase of Lululemon Athletica they had a high bargaining power. These rules can have a direct role in creating the strategies and approaches. With rapid numbers of factories means more competition. Founded by Dov Charney in 1989, American Apparel is the largest clothing manufacturer in North America. Andr Cavalcante, S. (2013). (2015). The external business environment consists of a set of external factors, such as economic factors, social factors, political and legal factors, demographic factors, technical factors amongst others, which are not controllable in nature and affects the business decisions of a firm. Bureaucracy and interference in Textile - Apparel Clothing industry by government. Free resources to assist you with your university studies! 3. By association, should these companies engage in unethical business practices - 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. Aug-22-2018. USA has avoided the European Union style stagnant economy on the back of slightly higher birth rate and higher level of immigration. 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 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. Social factors that leadership of Lululemon Athletica Inc. should analyze for PESTEL analysis are -, Technology is fast disrupting various industries across the board. But often in emerging countries these agencies delay the process as a tactic to extract bribes. With that being taken away, they will be put - 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. The political environment of a country comprises multifaceted factors. Nobody get fired for buying our Business Reports Templates. Likewise, Lululemon stores in countries with worsening economic conditions may have to close if doing business there becomes unprofitable or too risky. The economic and regulatory environment in a monopolistic or oligopolistic structure will be different from the monopolistic competition and perfect competition. Natural disasters in South East Asia and South Asia especially a concern because 82% 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). Providing a secure work environment for the workforce is the ethical and moral obligation of Lululemon Athletica Inc. Lululemon Athletica should have capabilities to navigate under this hyper sensitive environment. Attitudes (health, environmental consciousness, etc. Secondly governments from all parties adhere to the treaties made by the previous governments. Also, it can ensure the quality of the products. As such the impact of the external business environment factors on Huaweis marketing strategy are explained by the PESTEL Model as follows: PESTLE analysis Help, Academic - Employment Rate If the employment rate is high then it will impact Lululemon Athletica strategies in two ways it will provide enough customers for Lululemon Athletica products, and secondly it will make it expensive for Lululemon Athletica to hire talented & skillful employees. Moreover, health-associated campaigns by the government have an impact on the food chains like Arbys. If there is huge income inequality in the society then the likelihood of conflict and crime increases. Strategically leveraging corporate social responsibility: A corporate branding perspective. Lululemon Athletica should assess what are preferred choice of mobile payments in local economy and chose the business model based on it. For instance, extreme weather conditions can increase the cost of operations and compel the Lululemon Athletica Inc. to make the value chain more flexible. 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. So Dollarama struggles to find a balance between competitive prices and profitable prices. High GDP also signals the consumers ability to spend more on offered products. (2015). It is sensitive to business law regulation in different countries, and they tax regulation. 4. The Political Huawei, being a multinational company is affected by the external business environment. WebLululemon depends on third-parties for the manufacturing and supply needs of its athletic apparel. Finally, the exchange rate fluctuation can also influence the profitability and international trade. Legal is the sixth factor of PESTEL analysis. Understanding the impact of technology on firms business models. Tax level set for businesses by government have direct effect for how profitable the Lululemon company is. During the 1960 to 1970 the tennis shoes started to move from games footwear to easygoing footwear and turned into an image for the cheap and grime cultures. 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). 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). Revista ESPACIOS, 39(16). Some societies encourage entrepreneurship while some dont. The advent of social media and e-commerce has encouraged online shopping behavior among customers. Canadian government introducing Workplace Fitness Program Policy, and many other countries that Lululemon operate have also such policies. WebSociological Analysis Of Lululemon 191 Words | 1 Pages. To conclude, the PESTEL model is an important business tool that involves a detailed analysis of macro-environmental factors that shape the business environment. (2009). Bureaucracy and corruption negatively influence the business environment. Feel free to connect with us if you need business research. - 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. WebPESTEL Analysis Resources BusinessTeacher.org provide free business resources and online learning tools, perfect for helping students and professionals to develop their International Journal of Applied Engineering and Management Letters (IJAEML), 1(2), 78-97. 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). The demand and supply of labor determine the wage rates and supply of skilled workforce. Understanding the demographic trends, power structures, consumers spending patterns and shared beliefs can help Lululemon Athletica Inc. design effective marketing messages and fulfil corporate objectives through informed PESTEL analysis. 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. Amazing Business Data Maps. Lululemon Athletica Inc. can leverage the opportunities offered by social media marketing to improve business performance. The health and efficiency of financial markets will determine Lululemon Athletica Inc.s ability to raise the capital at fair prices. It is not only well known but has a rich history. Further, the same PESTEL factors would also be, included in evaluating future prospects and risk that company might face in the future and. 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. - Birth Rate Birth rate is also a good indicator of future demand. Changes in macro environment forces can impact the Porter Five Forces & industry attractiveness. 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. Lululemon Athletica Inc. should invest time on understanding the consumption motivations and social trends that define the consumption behavior. Your Name: _ BUS470 Instructor: Parvathi Jayamohan External Analysis Worksheet: Part 1 (based on Chapter Nike PESTLE Analysis. Most recent surveys suggest that around 76 % students try professional Explain. on WhatsApp for any queries. Posted by Zander Henry on Policy-making outcomes in Canada, the United States, and overseas can affect tax laws, governance standards, and foreign enterprises in multiple ways (Lululemon, 2017). Developing a multi-criteria decision making model for PESTEL analysis. High unemployment signals the availability of surplus labor at comparatively lower wages. Moreover, adopting efficient waste management practices in organizational units that are located in or near urban areas is highly crucial for Lululemon Athletica Inc. (2014). 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. 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