Running Head: PESTEL ANALYSIS
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Lululemon Athletica, Inc.
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PESTEL ANALYSIS
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PESTEL analyzes a strategic method for evaluating the organization's Macroclimate.
PESTEL stands for – political, economic, social, technical, environmental, and legal factors
impacting Lululemon Athletica Inc. Changes in the macro world will have a significant influence
not only on Lululemon Athletica Inc. but also on other companies in the apparel industry
(Tybout, 2017). Different factors can influence individual firms' competitive advantage or the
general degree of profitability of the consumer goods industry. The PESTEL study offers
information about Lululemon Athletica Inc.'s operational problems other than economic factors
in a prevailing macroclimate (Tsang). E.g., a sector with a clear growth trend will be extremely
lucrative, but if placed in a stable political setting, it won't help Lululemon Athletica Inc.
Political Factors
Political factors influence Lululemon Athletica Inc.'s long-term earnings in one nation or
industry where they play a major role in deciding the causes. Lululemon Athletica Inc. trades in
more than a dozen countries in Textile - Fashion Garments and is subject to various forms of the
danger of politics and the political climate. In diverse textiles – apparel industry throughout
different countries, progress has been accomplished by diversifying the political climate's
systematic threats (Tsang et al.). Lululemon Athletica Inc.'s policy stability and importance for
textiles – the apparel sector in the country's economy, the danger of military intervention, and the
level of corruption - especially regulatory levels for the consumables sector, can examine the
following factors carefully before joining or making investments in a certain industry.
Economic factors
Lululemon Inc. operates in various markets, some of them shrinking, rising, or
stagnating, but none can predict a business's future. Lululemon imports and sells the products in
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multiple currencies, which may profit and hinder Lululemon for importation and sales costs
(Vorlová, 2011). Inflation can also negatively impact the Business as the operating expense
changes while the sales price appears to be the same (Müller, 2017). Nevertheless, factors such
as inflation, saving rate, rate of interest, exchange rate, and the economic cycle influence the
total demand and overall spending in an economy. The Macroclimate determines the Company's
strategic edge is influenced by micro-environmental considerations such as competition
requirements (Vorlová, 2011). Lululemon Athletica Inc. will use the world's economic factors,
such as the growth rate; inflation; economic metrics for Business, such as the rate of growth of
the Textiles - Fashion Clothes, the customer spends, etc. Economic considerations to be taken
into consideration by Lululemon Athletica Inc. during PESTEL research includes economic
system type in operating countries – what type of economic system is there and how stable.
Social factors:
Lululemon Inc. forms part of the fitness and wellbeing industries. In today's culture, a
larger understanding of the impact yoga and physical activity can provide on one's life is
stressed. Statistics have shown that yoga has risen by 87 percent over the past five years as one
of the rising sectors. Therefore, society's ethos and how things are done influence the
organization's culture in a setting (Müller, 2017). The general values and the people's attitudes
play an important role in how Lululemon Athletica consumers in a local market understand the
brand message for apparel customers. The social variables to analyze for PESTEL research by
Lululemon Athletica Inc. (Rizzo, 2015).
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include population demographics and expertise, the system of groups, hierarchies and
structure of influence in society, level of compensation and expectations in education in
Lululemon Athletica Inc., and tastes in recreation (Cruz, 2020).
Technological Factors
In all sectors, technology is increasingly transforming diverse industries. Lululemon is
working in an age in which 2.4 billion Internet surfers cause globalization to expand. This helps
Lululemon to have access to multiple industries to help it effectively in outsourcing. The Internet
also makes shopping easier for consumers to compare competing goods from multiple suppliers
(Varley et al., 2018). The figures reveal that the amount spent on online purchases was $763
billion in 2011. Retailers will profit from offering e-commerce due to low running expenses. The
Internet has allowed social media, mobile means, and search engine marketing to make ads one
of the cheapest and most effective forms of marketing a commodity.
Environmental Factors
Different markets have different standards or environmental standards that can affect the
organization's performance in those markets. There may also be different environmental laws
and laws on transparency within a region. For instance, in the USA, Texas, or Florida, the
insurance clauses for natural incidents are different (Varleyet al., 2018). Similarly, several
European countries are supplying businesses working in the renewables market with safe tax
cuts. The corporation has to closely analyze sustainability requirements needed for activities on
such markets before entering new markets or entering a New Industry in an established sector
(Reich et al., 2018).
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Legal Factors
The regulatory system and institutions in various countries are not solid enough to secure
an organization's intellectual property rights. Before entering those markets, a company must
closely assess, as this will lead to theft of the corporation's secret sauce. Any of the legal
considerations to remember before entering a foreign market are Lululemon Athletica, Inc.
Additionally, if data infringements arise, and experts agree that the Lululemon Privacy Act is
being violated due to weaknesses in the information protection policies, severe lawsuits, and
financial fines may be levied (Grabner, 2019). While Lululemon does its utmost best to meet its
regulatory standards, comparable laws may occur if the organization accidentally breaches labor
practice or is injured in a defensive manner in the workplace (Lululemon, 2017). Changes in the
labor laws or protection of employees working at Lululemon can alter the significance of models
used to justify expansion and staffing strategies
Ethic Isssues
One of the ethical problems facing Lululemon Inc. today is that Lululemon urges staff to
make it possible for their clients to hear more about the existing complaints/defects of their
goods. This was applied to the Business because Lululemon Inc. is known to deter vast consumer
data from being obtained using detailed data techniques (Lavrence & Lozanski, 2014). Instead,
the organization wants its clients to be closely and openly linked. While shopping at the store or
in his Business, Lululemon would prefer to link to her customers instead of gathering data. This
philosophy has contributed to Lululemon's seven core values: consistency, commodity, honesty,
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balance, entrepreneurship, fun, which grandeur, and has been focused on the goal of creating
components for people who live longer, healthier, and fun lives.' In this scenario, honesty,
efficiency, and grandeur are the ideals concerned (Lavrence & Lozanski, 2014). As a brand,
Lululemon emphasizes grandeur as a core value of how the Company operates, constantly
aiming for the best goods and being the biggest Company. Another primary characteristic is
honesty, which allows its staff to be trustworthy and maintain good moral values (Baalbaki,
Gilliard & Hoffman, 2019). The fact that workers are quicker to get input from their clients on
the Company's product infringes on its integrity worth.
Strategy
A yoga and exercise clothing firm, Lululemon Athletica, Inc. (LULU) is a successful
company that markets a lifestyle rather than a product. The organization's approach focuses on
marketing its branded goods Lululemon Athletica and Ivivva Athletica as steps toward an active
and entertaining lifestyle (Sánchez González, 2019). This was a good tactic for Lululemon, as its
goods can be purchased at a premium. People wear the goods of the Business also as fashion
clothes and not just for practice.
Lululemon sells its goods through its own and operate a network of stores and through
online purchases directly to its customers. On 6 December 2018, Lululemon runs 426 outlets in
the US, Australia, New Zealand, Canada, the UK, and Singapore. It believes that Lululemon
shops help the firm communicate with clients and request product reviews, and strengthen the
brand (Lavrence & Lozanski, 2014). The enterprise also sells its products to wholesale customers
such as health clubs, fitness centers and yoga studios, and e-commerce and digital sales. Sales
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and sales through showrooms and temporary locations include further sales avenues (Sánchez
González, 2019).
In conclusion, in the realms of every organization, analyzing both internal and external
factors is essential. However, even with the challenging economy, Lululemon still get grow
revenue (Grabner, 2019). The reason is Lululemon has a sound financial base, excellent
management, high-quality products, and a committed workforce; hence these are influenced by
different factors. The Company uses PESTEL analysis to analyze different factors impacting the
organization.
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References
Baalbaki, S., Gilliard, D. J., & Hoffman, D. L. (2019). Is Lululemon Athletica's Turnabournd
Sustainable?. American Journal of Management, 19(2).
Cruz, M. D. C. A. F. D. G. (2020). Equity research-lululemon Athletica inc (Doctoral
dissertation).
Grabner, S. (2019). S&P global ratings' issuer credit rating process applied in Lululemon
Athletica, inc (Doctoral dissertation).
Lavrence, C., & Lozanski, K. (2014). "This Is Not Your Practice Life": lululemon and the
Neoliberal Governance of Self. Canadian Review of Sociology/Revue Canadienne de
Sociologie, 51(1), 76-94.
Müller, D. (2017). The role of brand communities within the athletic footwear industry: an
assessment of selected brand communities focusing on the Swiss athletic footwear
industry.
Reich, A. E., Wilson, A., Haddix, H., Bock, J., & Perella, M. (2018). Fashion Case Study Trend
Niche.
Rizzo, L. (2015). Retail Investors May Try-On Apparel Companies for Size. The Private Equity
Analyst.
Sánchez González, M. (2019). Lululemon Athletica Inc. Investment Research.
Thomas, J. B., & Peters, C. (2015). Lululemon Athletica and a series of bad marketing decisions.
Journal of Critical Incidents, 8, 102-05.
Thomas, J. B., & Peters, C. (2015). Lululemon Athletica and a series of bad marketing decisions.
Journal of Critical Incidents, 8, 102-05.
Tybout, A. M. (2017). Lululemon Athletica. Kellogg School of Management.
PESTEL ANALYSIS
Varley, R., Roncha, A., Radclyffe-Thomas, N., & Gee, L. (2018). Fashion management: A
strategic approach. Macmillan International Higher Education.
Wu, D., Greenberg, J., Pridemore, J., Yuan, X., & Yan, Z. Lululemon Athletica.
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