PESTLE Analysis of Lululemon. Lululemon Athletica Inc. is a retail athletic apparel manufacturing Canadian multinational company. Chip Wilson established the company in 1998. The headquarters of the apparel brand is in Vancouver, British Columbia, Canada.
Some of the main products and services of Lululemon are as follows;
- Personal care items
- Lifestyle apparel
- Athletic wear
- Yoga wear
- Yoga pants
- Women Accessories
Key statistical facts and figures about Lululemon are as follows;
- The annual revenue of the sportswear brand in 2023 was 8.839 billion US dollars
- Out of which, the net income of the company was 1.007 billion US dollars
- Approximately 34000 employees are working for the company to manage its operations
- The sportswear brand has a network of more than 655 location points worldwide
Some of the main business divisions of the company are as follows;
- Ivivva Athletica
- Lululemon Athletica
Some of the top competitors of Lululemon are as follows;
- Beyond Yoga
- Sweaty Betty
- Under Armour
- Alo Yoga
- Outdoor Voices
Today, we’ll discuss the PESTLE analysis of Lululemon. It is going to focus on the external political, economic, social, technological, legal, and environmental factors impacting the sportswear brand. Here’s Lululemon PESTLE analysis as follows;
Political Factors Impacting Lululemon
Some of the main political factors in the PESTLE analysis of Lululemon are as follows;
Tax rates and regulations of different political governments are different for the sportswear brands. It greatly impacts the revenue and profitability of the company. For instance, if the conservative or liberal political party increases the taxation, then it would decrease the profit margin of Lululemon.
Lululemon is a multinational brand, and government policies of different countries impact the business of the company. For instance, the Canadian government is not favorable to the local companies operating their business in other countries. Such government policies directly impact the profitability, growth, and market share of the company.
The stable political environment of the country plays a significant role in the growth of businesses and companies. For instance, corrupt bureaucracy, riots, processing, and strikes would jeopardize the flow and operations of Lululemon.
Economical Factors Affecting Lululemon
Some of the main economic factors in the PESTLE analysis of Lululemon are as follows;
Exchange is one of the key economic factors that impacts the sales and demand of Lululemon. For instance, if the currency exchange rate of Canada is higher than other currencies, then it means that foreigners have to pay more to buy something. Resultantly, it would decrease the demand and sales of the company’s products; and vice versa.
The global inflation rate has increased significantly over the past few years. A higher inflation rate would increase the prices of the product, and it would make Lululemon’s products costly. People have limited purchasing power, and when prices increase to a certain limit, people stop buying things.
The central bank of any country keeps on changing its interest rate throughout the year depending on the government’s economic policy. If the government and banks increase the interest rate, then people would start saving their money in the banks. Higher savings and low spending would negatively impact the sale of Lululemon.
Social Factors Impacting Lululemon
Some of the main social factors in the Lululemon PESTLE analysis are as follows;
The target customer market of Lululemon is the young demographic of people like teenagers, 20s, and 30s. It is because younger people are healthy and enthusiastic, and they would engage in the exercises and fitness activities. As a result, Lululemon earns more revenue and sales in a young demographic country.
Health and fitness trends greatly impact the sales of Lululemon. The thing about such fitness trends is that they keep on changing throughout the years. Sometimes, people are on to yoga, and other times, they are on to indoor, outdoor, and other athletic activities.
Cultural factor also plays an important role in the sale of Lululemon’s products. Some cultures don’t allow the promotion of half-naked playing sports activities, and the company can’t sell its products there. Therefore, the company should keep in mind the cultural factor while launching its products in any country.
Technological Factors Affecting Lululemon
Some of the main technological factors in the Lululemon PESTLE analysis are as follows;
The growth of online shopping trends and e-commerce platforms has been increasing significantly for the past few years. The e-commerce platform of Lululemon contributed roundabout 2.6 billion dollars in sales.
Lululemon is always investing in the latest technology for the growth and productivity of its business operations. Automation technology is a cutting-edge technology and it would bring efficiency in the company’s operations. Resultantly, it would increase the company’s sales and profitability.
Lululemon is successfully employing the latest digital media platforms for the marketing and advertisement of its products. It allows the company to connect with customers that are active on digital media devices. In fact, digital marketing is highly cost-efficient compared to other traditional and conventional marketing approaches.
Legal Factors Impacting Lululemon
Some of the main legal factors in the Lululemon PESTLE analysis are as follows;
IPR and patents of different countries are highly strict and they would impose heavy fines and fees. For instance, Nike has recently filed a lawsuit against Lululemon over patent infringement. Therefore, Lululemon should be cautious about the patent and IPR laws, because they would cost the company millions of dollars in fines.
Labor regulations and consumer market laws of different countries are different. Non-compliance against such laws would jeopardize the operations and functionality of Lululemon in the long term. Data privacy is another growing concern and the company should keep in mind data privacy laws.
Environmental Factors Affecting Lululemon
Some of the main environmental factors in the Lululemon PESTLE analysis are as follows;
Lululemon is an apparel and clothes manufacturing brand, and the company develops both warm and cool clothes for different markets. Global warming has greatly shifted and disrupted the weather cycle across the world, and it has negatively impacted the sales of the company.
The consumer market is shifting towards renewable sources of energy and moving away from the consumption of fossil fuels. Lululemon is facing a lot of pressure from the market to shift its operations toward renewable sources of energy. In fact, Lululemon has recently signed an agreement to completely transform its operations towards renewable energy in the North American market.
Conclusion: Lululemon PESTLE Analysis
After an in-depth study of PESTLE analysis of Lululemon; we have realized that Lululemon is a world’s leading clothing and sportswear brand. If you are learning about the business of apparel manufacturing brand Lululemon, then you should keep in mind the abovementioned macro-environmental factors.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.