Political And Social Factors Affecting Lululemon

Figure 1 gives an overview of the Political, Economic, Social, Technological, Environmental, and Legal Factors affecting Lululemon.
P (Political)  It doesn't own manufacturing facilities instead it outsources its merchandise production to manufacturers in third-world countries with unstable political environment.
 It is exposed to trade embargos and increase in tariffs rates.
 It operates in countries with different tax regulations, exposing it to double taxation if the countries don’t have respective treaties in place to avoid double taxation.
 Yet governments of these countries may have incentive programs applicable for Lululemon as an employer of local labour.
E (Economic)  Foreign currency, taxation and trade conditions in overseas …show more content…
And statistics show forecast the trend would continue it’s upward.
 Lululemon brand image depends on the quality of its apparel, however, what if its resource supplier and manufacturer engage in unethical business practices or skimp quality guidelines.
 It’s complicated to use foreign labour and manufacturing resources among multinational industries.

T (Technological)  The Internet allows customer to shop convenient and confidently as they can compare competing products easily.
 The Internet has enabled advertising to be done through social media, to make it one of the fastest and cheapest ways to market the products.
 Cyber-attacks become a threat, such an attack could take Lululemon’s digital market place offline temporarily or cause permanent damage to its information assets.
L (Legal Factors)
E (Environmental)  It is currently not affected environment directly. This is due to outsourcing, all their products through third-party manufactures.
 Third-party supplier mainly located in South-east Asia where pollution regulation is being stricter.
 Natural disasters may be concerned, if so, raw material would be damaged so that the company cannot meet product demand …show more content…
They have growth immensely over last two decades and expanded through all countries. They have been established larger and broader customer circle, stronger brand image and much more retail presence. Furthermore, they have accessed to a great amount of resources as compared to Lululemon.
Threat of new entrants High Due to low entry barriers within industries, and Lululemon doesn't have any own patents so that it’s easily to replicate, even though Lululemon has a strong brand image and position in retail location. And Lululemon’s supplier is through third party and since the company has no long-term and fixed contract, suppliers can easily supply other retailers who pay more money.
Threat of substitute products or services High Although the high quality and materials used in the Lululemon apparel is difficult to replicate, there still lots of brands cater to individuals. Hence, if Lululemon has poor performance and less likely material used, customers are would like to choose another brand easily.
Bargaining power of buyer -Athletes and Teams=