The process of development and expansion of any company is inevitable when the goal is further growth. There are various types of extensions, but one of the most unpredictable and difficult is the entry of an organization into international markets. The potential success of the international expansion of Lululemon Athletica is influenced by several factors, including the impact of government regulations, internal organizational conditions, and the ability to respond to challenges.
The state is possible to enact legislation that alters social behavior in the corporate world. Recent research on international business governance provided evidence of improved public-private relations and governments’ active engagement in the useful contribution to markets (Marques & Eberlein, 2020). With regard to Europe and, in particular, the European Union, the functions of state regulation are obtained and implemented by the leadership and executive committees of the European Union.
Referring to the legal acts of the European Union and the activities of its various bodies and structures, trade activities in this region are conducted on a transparent and fair basis. Given the fact that most nations of the European Union use a common currency, international trade can be carried out according to simplified schemes, using international money transfers. The organization Lululemon Athletica will be able to use the advantages of a single currency while expanding its influence and distribution of products among the countries of the European Union.
International Business Activities
Considering the strategic objectives for the product expansion of Lululemon Athletica in the sportswear sphere, it is possible to state that the selected area is believed to have substantial potential for development. The fashion sportswear product category has a high demand in Europe, and it is progressively being imported from developing nations (“The European market,” 2020). One of the strategic objectives in the market development of this product is the accurate tracking of current trends and their timely implementation.
Great importance should be attached to the formation of the correct style of products and its adaptation to the modern needs of society and the realities in the field of clothing. The next significant objective for expanding the market is the correct awareness and appreciation of cultural differences and mentality. Entering the European business scene, it is necessary for the management of Lululemon Athletica to clearly understand the differences between European people and representatives of other nations and aim at the right points of influence.
As one of the feasible entry modes, it is possible to emphasize the concept of direct exporting. Direct exporting is when people sell directly into the market they have selected, first and foremost using their capabilities. Once a marketing strategy has been developed, many firms turn to representatives and distributors to promote them in the market. For Lululemon Athletica, it is feasible to explore exporting to Poland, the fastest rising purchaser of clothes and apparel from emerging nations in Europe, including the trendy sportswear category (“The European market,” 2020).
In addition, the partnering entry methodology has huge potential in connection with entering foreign markets. Partnering can take many forms, ranging from a basic co-marketing agreement to a complex manufacturing cooperation agreement (“The European market,” 2020). Based on any of the above scenarios, it is necessary to recognize the goals that are set for the company before the process of entering a new market.
What concerns organizational structure, it is possible to propose a more centralized framework. It is necessary to take into account the nature and scope of activities of all employees when choosing the right organizational structure in the firm (Dedahanov et al., 2017). The person or group makes fundamental decisions of individuals at the top of the organization in centralized companies. Decision-making power is transferred within a decentralized organization, where the responsibility is distributed equally among the representatives of different organizational levels. In a situation of expansion and entry into the international market, strong and responsible power of specific people is needed, who, relying on the opinion of all participants, will make management decisions.
Responding to Issues and Challenges
Problems and difficulties arising both on the global business scene and in internal operational processes require specific and consistent steps to solve them. Considering the elaboration of recommendations, the first step in implementing a plan for responding to problems is the timely identification of important stakeholders in a specific crisis. The next level in strategy development is a detailed analysis of previous positive and negative experiences and an analysis of similar cases.
In this situation, one cannot deny the need for sufficient theoretical training and the formation of a confident knowledge methodology, based on which it will be possible to make different decisions. Finally, it is worth emphasizing the essential need for business leaders to work correctly with their employees. Competent communication of information and sufficient motivation will help improve the universal tools for responding to any external and internal problems.
In conclusion, it is feasible for the state to adopt legislation that changes corporate behavior and actions. Considering the strategic objectives for the product expansion of Lululemon Athletica in the sportswear sphere, it is possible to state that the selected area is believed to have substantial potential for development. What concerns organizational structure, it is possible to propose a more centralized organizational framework. Thoughtful information exchange and proper motivation will aid in developing universal instruments for dealing with both external and internal issues.
Dedahanov, A. T., Rhee, C., & Yoon, J. (2017). Organizational structure and innovation performance. Career Development International, 22(4), 334-350. Web.
Marques, J. C. & Eberlein, B. (2020). Grounding transnational business governance: A political-strategic perspective on government responses in the Global South. Regulation & Governance, 15(4), 1209-1229. Web.
The European market potential for fashion sportswear. (2020). Center for the Promotion of Imports. Web.