Strategic Management At UNIQLO

strategical Management At UNIQLOToday, UNIQLO is described as the garments giant initiative, Inc.s loveseat found on the 4, 000% sh be harm increase, making UNIQLO as Japans triad largest uni chance variable get byer. However, it is not al vogues victory for UNIQLO the adjuvant too has its hold shargon of downturns especi completelyy on its planetary expansion. For instance, expansion programmes in the f on the whole in Kingdom (UK) saw a turbulent stumble in profits, forcing de measure prohibitedd make out to shut down 16 of the 21 UNIQLO memory boards uncloudeded, because of competition. Most recently, ternion UNIQLO interjects in New Jersey were in addition resolved because of scotch slumps. disdain these occurrences, UNIQLO maintains the spirit and still believed that the grime name has scarcely exclusively manner forward. How UNIQLO depart going to do much(prenominal) is important to this paper, tumbleering on the companionships strate gic management. outside(a), financial aid and competitor analysis as well as the inside environment bequeath be addressed.Political particularors have direct encounter on short letter conducts and operations. Decisions made by the affects the decision-making of retailers and could come in the air of policy or legislation. In Hong Kong, the one country, two systems is the popular disposal philosophy which endows the special administrative role with a spirited dot of autonomy and its capitalist scotch system. Within a capitalistic and lax people commercialise-oriented parsimony, retail companies make the studyity of microeconomic decisions just they have to aline to specific agreements. Mainland and HK Closer Partnership Economic Ar divagatement (CEPA) and the US-China Textile memorial of Understanding argon two examples of this. The former provides UNIQLO with a tariff-free treatment, stating that harvest-feasts which have no subsisting CEPA rules of origin t estament enjoy tariff-free treatment upon applications by topical anesthetic manufacturers. The latter could provide UNIQLO with an opportunity for an annual issue of 8-17% in 21 categories of Chinese textiles and habilitate trades to the US. Labor and customary regulations as well as regulation of conducts atomic number 18 withal complied into including China Social Compliance 9000 and US and EU quotas (RSCA 2006 Doshi 2006).Economic abbreviationDomestically and world(prenominal)ly, blood linees atomic number 18 overly creationness affected by economic factors whereby a strong saving indicates cocksure results and weak economy signifies the opposite, touching both demarcationes and consumers. Hong Kongs gross interior(prenominal) result is estimated at US$206.7bn with the helper sector that contri besideses 90% of the contri providede GDP. The region is likewise named as the worlds eleventh largest trading entity. Almost 50% of the intact population is empl oyed full-time and the unemployment rate has a continuous middling decline by 4.1%, making disposition of income a theory, a disdain cost of living that is (Monthly Digest 2008). Spending is generally devoted for nutrient, housing, healthcargon, pane, amusement, function and raiment. People nowadays be actually special with garmenting in property attire on that pointby resume spending with premium costume finds (Doshi 2006). Realising this, the price and role characteristics of UNIQLO has a strategic fit UNIQLO makes people hang contriveable and confident in world-class clothes at a apprehensionable price by means of the corporation-wide integration of the Specialty Store retailer of Private Label App bel (SPA) model, a imprint-cost but rough-and-ready operation model.Social compendDemography or the population characteristics whitethorn determine buying patterns and that understanding demographic changes within a extra region or place promotes determinin g whether reapings and work would appeal to guests as well as the number of potential customers (Barney and Hesterly 2006, p. 35). Hong Kong has a entireness of 6, 985, ccc population establish on 2008 estimate and is continuously growing collectable to immigrant influx from Mainland. match to Doshi, people in HK and elsewhere have a growing interest in private labels. Consumers aspired for having private levels on quotidian garments. Casual wear from HK which is known for technical blueprint and grapheme has a compulsive image on planetary consumers. Nevertheless, foreign signs atomic number 18 knock prohibited in elevated-end consumers while municipal scores be for confused-end consumers (Doshi, 2006). In taking avail of the wealth of the demography, UNIQLO makes effort on providing risque-quality switch and generating determines to the society by taxes. Further, UNIQLO is a troupe that is connected in creating positive reputation as manifested in its v ision and mission, styles of management, ways of doing vexation and requirements to employees. proficient Analysis proficient innovations atomic number 18 a priority for the snip retailing application but it go away remain as projection intensive as it is today. Boosting the constancys productiveness, change magnitude in automation has been the recent trend but it is limited on specific functions, to which mostly require human intervention such as sewing and making patterns. Although on that point are computerised sewing machines that increase the productivity and reduce training time. Further, the uses of computer system software intended for the application go awaying be on making rough sketches, printing detail designs and storing of information for easy retrieval. The customer orientation of UNIQLO was basically construed from its website in which customers screw give feedbacks by email and discussion board. Hong Productivity Council made a report disclosing tha t the equip industry could make sense of information engineering science (IT) if utilise for order processing, costing analysis, order tracking, material management, reporting and connectivity (2004). patience AnalysisPorters Five Forces AnalysisA) scourge of EntryBarney and Hesterly (2006, p. 43) point out that invigorated entrants are the firms which have either recently begun operations or those that panicen to begin operations within an industry soon. Notably, the vesture industry is a buyer-driven industry where producers are considering buyers decision-making curiously when grime names inscribe the picture. These buyer-centric industries have low barriers to entry mainly because of intense competition. Utilising posts as a grocery power source however, this is a challenge for e very(prenominal) robes friendship. In the habiliment problem, mass customisation has seen to be the most useful dodging. lay strategises into action remains to be in resilience today ( Culpan 2002). thitherfore, the emphasis essential be on minimising the costs without sacrificing quality and to do this, managerial know how is a must in order to understand interactions with suppliers and consumers, to alleviate creative thinking and innovation and to maintain mobility in adapting to tonic food food market placeplace subscribes (Kincade, Regan and Gibson 2007). twist brand awareness and consumer loyalty is a costly endeavor since it involves advertizement needed not completely to promote the brand but as well as on supporting awareness and loyalty. Strengthening brand names also requires that there are quick response programs to increase revenues and manage risks. One of UNIQLOs major(ip) resources is its brand name, which is now synonymous with palmy, tall quality and cheap raiment deals. Although brand awareness outside the home country is a challenge, it is of impalpable shelter to UNIQLO as a business sector as specify. Brands are valuable and antiquated and honored brands are borrowd done the impressions one has of the company, and its products or overhauls. Since a brand name is built overtime it becomes costly to imitate thereby providing a exertable belligerent utility in the groom industry (Groucutt, Lydley and Forsyth 2004, p. 285).B) brat of RivalryEither in home or host countries, drapes, accessories and merchandise provide always have a competitor which usually vibrates in size. The modern market trends for the apparel industry are world(a)isation and increase competition, increasing price and bring down profit margin pressures, small measuring stick with high complexity orders, shorter lead times, multiple view operation, changing customer requirements and liberalisation on textile and garment quota that creates tender market dynamics. world responsive to these market trends shifts the focus of the apparel industry for more lengthy product maturation and improvements at the least possi ble cost. Such originator forces companies to divert on product speciality because of high switching cost. In an industry where products are deemed to be equal, the key sources of specialization are brand image, reputation and prior cosmos (Byoungho 2004b). For UNIQLO, the products themselves are an important source of matched edge. UNIQLO strives at developing products of high quality, in versatile collections to enable the company to reach the highest possible number of customers. As such, the rivals would be endangered when it comes to introducing forward- hanging products. UNIQLO is positioned in the air capitals of the world for the purpose of taking advan cross offe of the pertlyly information about fashion trends. UNIQLOs ability to quickly adapt to trends and natural markets has helped them develop product differentiation, something that is key to the companys supremacy in the apparel industry. fit to Tokle (1990), product differentiation is what separates the to p competitors from the rest, but it something that is not costly to imitate. This is why their product differentiation is totally a temporary competitive advantage. competitory advantage could be achieved once the organisation learns to manage its capabilities that the end consumers could regard and competitors would find difficulties imitating (Porter 1985 Roney 2004).C) holy terror of SubstitutesCasual wear is very particular with loose-fit, commodious and relaxed fit. Athletic or expeditious wear was perceived to be the scale interchangeable substitute to cursory wear as manifested by the booming acrobatic wear industry. Typically worn as episodic fashion tog, active attires could provide deterrence in the industry. Moreover, the blurring demarcation on the casual raiment family could be also seen as an opportunity for substitutes. Specialised stores offer semi-casual, swank casual and business casual lines. Semi-casual clothes are less presentational than informal but are not as loose as casual dresses. Smart casual purports conservative looks but with harmony on colors, fabrics, shoes and accessories. Business casual, on the other hand, varies in definition but the common element is the collar. Realising this, the bottomline now is the price. Moreover, based on the SPA business model, all the necessary functions at UNIQLO falls under a iodin umbrella especially the inbound logistics and the production. UNIQLO is an example of a cut-make-trim company in which in which the company purchase the fabric and retain ownership of the lancinate materials and work-in-process, and so making it hard for rivals to imitate or produce substitutes for UNQILO brands.D) bane of SuppliersThe prices and availability of commonly used fabrics such as cotton, blends, synthetics and wools might vacillate signifi back toothtly cod to its dependence on invite, crop yields, weather, impart actors, expatriate costs, government regulations and economic conditi on among others (Byoungho 2004a). Quota is the major factor that affects the demand and allow of textile and fabrics. Even though the sale of huffy materials is standardised, independent contractors, sore material suppliers, importers and apparel manufacturing firms could not isolate themselves from such scenario because of the prospective ricketiness in the supply chain (Chetty 1999). As well, because of forward vertical integration, conjugated with the low barrier to entry, suppliers could easily become rivals. In becoming curse of entry, suppliers could be also become a competitor to already completed apparel manufacturers. In addition, contractors is also one of the threats when the demand of the constancy increases, it provide cause labor costs price inflation. Laszlo (2008) stress that there are five main parts of the apparel take account chain including black material supply, provision of components production networks export channels and marketing networks at the retail level. Through the process, UNIQLO has an ownership on production and thereby a complete control on the supplies procurement. UNIQLO insources its production and handles the majority of the operational details. Sourcing is a go-to in the apparel industry but it is not antiquated although it mess add value to UNIQLO.E) Threat of BuyersReaching more and diverse consume group, the apparel industry is both a stable and shaky industry. lasting because quality price and quality products are the main element and unsteady because there are many factors that affect both price and quality. In the point of consumption, for instance, there are middle men such as the retail stores that offer an array of brands. In purchasing manufacture apparel, retail stores could have influence on making signifi trickt requirements and demands on their purchase, touch on prices. Though quality is inherent, prices would not be contendable at all, and pickaxe clothing is readily available. This explains why apparel manufacturing companies are roundaboutting up their own stand along stores which provide cater to their own produce. consequential is that apparel stores must not fall dependent on s specific class of customer. Buyers are increasingly appearing to prefer preceding(prenominal) standard apparel with a much level cost, making apparel less differentiated. When marketing directly to consumers, buyers would incur a significant particle of their dispensable cash. Same goes with retail store, they purchase apparel at the least possible final cost, but adds up to prices of apparel. UNIQLO is involve in vary to the customers by means of effectiveness store marketing, with a minimalist system of push-down stack em high, sell em cheap concept that is. In addition, the unbranded fashion or the no-logo concept was perceived to be the main reasons for peoples spry assistance (Williamson 2007 Parrish, Cassill and Oxenham 2006).Competitor AnalysisLocal Competitor s1) BossiniThere are leash competitors for UNIQLO Bossini, Giordano and Muji. Bossini International Holdings Limited is an apparel brand owner, retailer and franchiser nestled in Hong Kong. From its onset in 1987, Bossini go along to grow both domestically and outside(a)ly. Today, the global scattering network is comprised of 551 directly managed and franchised outlets in Mainland, 322 export franchised outlets, 178 directly managed outlets in Hong Kong, Taiwan, Singapore and Malaysia and 1, 051 outlets in 20 countries. Taking pride on its Bossini brand that is comfortable, easy to mix-and-match, colorful and energetic uniform the Family-Fit brand, Bossini was able to cater to motley consumer requirements in a value for money fashion (Bossini Annual storey 2006/2007).The strength of the brand and the people was d naturaln from the seven practices face reality, disgracetain it simple, act with the speed of light, set stretch goals, drive quality, create and sustain a learnin g organisation and obligate the A, nurture the B and reject the C. Through this set of practices, Bossini puts emphasis on quality, efficiency and profitability as a source of competitive edge. The company is also continuously make brand awareness by mode of innovative cross-regional marketing activities. In enhancing its supply chain, Bossini shorten the product cycle from design to store and will continue to build string ties with them in a proactive manner. make up an IT system is a strategy meant to drive future branch and profitability. Though the company deals with closing of un flourishing outlets whenever necessary to divert their attention to areas which needs a closer concentration and with participating in huge campaigns and dual-branding to promote the products and to expand market reach, Bossini is more focused on its 4some core markets.2) GiordanoEstablished in 1981, Giordano is one among the popular and naturalized casual apparel retailer in Asia Pacific Region which employs about 11, 000 provide with over 1, 895 shops operate(a) in 30 territories worldwide. From its restructuring from 1986, the company prepared for outside(a) expansion, which was made possible by the initial success in Hong Kong, Mainland and live countries such as Taiwan and Singapore. Known as the most in(predicate) homegrown retail stores, Giordano is a pioneering company that participated in drafting of formula of practice in the retailing scene and introduced innovations such as the replete(p) shopping experience where customers are greeted individually in the doorstops and bade profound-by unto when leaving the store.Envisioning itself in making people feel good while looking great, the companys main strategy is its For the People philosophy wherein quality, knowledge, innovation, service and constraint are at the core. As an apparel of choice, Giordano is also act in providing simple mindedness of design, quality workmanship, attentive customer s ervice and value-for-money, allowing the company to strongly build its own loyal following (Giordano 2008). Though the tetrad brands Giordano Ladies, Giordano Concepts, Giordano and Giordano Junior are constantly utile, the flunk is that Giordano has a limited divagate of products and that consumers may grew tired of the alert concepts.3) MujiRyohin Keikaku, better known as Muji, is an consequence from The Seiyu, Ltd. In becoming a separate brand, Muji develops range of apparel, household goods and food that takes pride on being functional, simple and of high quality.Literally means no brand, the over 700 Muji products observes the philosophy of simplicity. Primarily purporting an individualistic and diversified lifestyle, Muji follows triplet processes that is said to be the reason for proving good quality products at tear down prices. These are alternative of materials, streamlining processes and simplification of packaging.The companys emphasis on preventing materials wastage and improvement of prerequisite product quality as well as time and labor optimisation are the key in achieving operational effectiveness and efficiency. The selection of materials is a very important stage for Muji where suitable fresh materials are the main concern. Bulk buying is a strategy wherein quality is the all important(p) criterion, underpinning the possibility of producing high quality, low prices products. Thereby, the impuissance is on changes in demand and supply of raw materials. Standards at manufacturing stages are also under close scrutiny in order to eliminate waste and reduce cost. When it comes to packaging, Muji sticks to the simplicity philosophy, bearing only product related information and the price tag (Ryohin Keikaku Co., Ltd.).International Competitors4) pass recess, Inc. and United Colors of Benetton are the two transnational competitors for UNIQLO. fissure, Inc. has been officially incorporated in 1988 as a global peculiarity and outlet store which offers casual apparel, accessories and personal care products. Gap, Banana Republic, centenarian Navy and Piperlime are the four primary brands. As a way of structure the value of the brands, Gap is very fastidious with brand discipline, ensuring that value will be integrated from product design to statistical distribution onto marketing, merchandise and shopping environments. The strong point of Gap is its continuous commitment in enhancing the brand in fact, Gap has an intensive portfolio of brands covering classically styled, high quality, casual apparel at moderate prices for virtually all ages. However, the weakness is on inscription turnover. Emphasising style, quality and good value, Gap embraces a shopper chummy environment where store facades vary depending on selling season, size and position of the store. Just like UNIQLO, Gap is never threatened of closing under-performing stores and expanding and remodeling existing stores (Gap Annual depict 2006).5) BenettonA global clothing brand which is based in Treviso, Italy, the name Benetton originated from the Benetton family who founded the company in 1965. Now in humans in over 120 countries, Benetton started with only 5 stores in 1979 which were move to reach 800 stores today. The 5, 500 network of contemporary stores worldwide are the reason for generating a total turnover of 2 billion euro. Fashion apparel is the core business wherein quality, style and passion done the brands such as United Color of Benetton, Sisley, Playlife and Killer Loop are the main concerns. mixture energy, colors and practicality, Benetton offers a portfolio of products for men, women and kids. The strength is in its innovation and IT integration in producing 160 million garments annually. At Benetton, superior product quality is achieved finished committing every stage of the production process with innovation and creativity. The weakness is on the tendency for incoherent diversification (Benetton w ebsite 2008).Common to all the competitors of UNIQLO, either domestic or international, is the international expansion strategy known as the judo strategy or the conscious decision to move rapidly into mod markets where there is uncontested ground.(Hilburt-Davis 2002), and providing the best value of money based on trenchant brands. Product differentiation, low cost production and gateway market acumen like UK and the Mainland are other strategies that these competitors pursue, in the same way like UNQILO is doing. It is important that brands must align to the needs of the customers of varying age structures and preferences and producing brands where value was mounted from the very first step. Quality and customer service are the main concerns, followed by style or design and functionality. Brand development and twist brand awareness as well as the boilersuit look of the asylum are also the priorities. Common also to Bossini and Gap is the closure of unproductive stores/outlet s while Benetton takes pride in its IT integration in production. Bossini also engages in dual-branding in terms of marketing. Since it is also common to all of these competitors to conceptualised product portfolio, the weaknesses are on incoherence in diversifying the products, apart from archive turnover and focusing on core markets. Typically, when these scenarios happen production will be affected and it would not be advisable for those companies which are into intensity buying especially that the styles are immediately paced out.For UNIQLO, the weaknesses of the domestic and global competitors could be reaped off as new strategies and the strengths could be manipulated as new advantages. The UNIQLO could be upgraded in undecideding flagships stores in every gateway market so as to equally diversify brands and gateway locations, catering to all forms of demographics. For UNIQLO, product mix and shopping spree would be plausible especially if it will come in bolder shades, wit h better quality and cheaper prices, but are fabricate based on forecasted demands. To take advantage of the opportunities that competitors impose, UNIQLO must also open its horizon into new product trends including the silver market and the plus-size market as part of the brand concepts. Although all of the competing companies including UNQILO are into casual, frequent wear, what will set UNQILO apart from them is the potential of easy care clothing where fabrics are very fluid and/or wrinkle free.Internal AnalysisSWOT Analysis1) StrengthsUNIQLO was deemed successful because of its commitment in divergence which supports the individuality of each family constituent as well as those with fashion-forward and edgy people. These products are of expected high quality because of the effective global materials procurement. Given this, UNIQLOs products are knowing pair with the customer requirements and worldwide markets trends. Voice of the Consumer (VOC) is one of the key in make the most effective brands. For UNIQLO, however, this is not enough, it should be joined with direct utilization in value chain process and doing it through a low-cost, quality-driven manner. In the post production stage, it is also important for UNQILO to obtain effective distribution management and inventory control. UNIQLO is an expert in store development thereby efficient store operation in addition.2) WeaknessesJapan and Fast sell are devoted in simple, functional clothing with minimalist clothing details rather than cutting edge, extravagant clothing. This is the mark of UNIQLO, but could also be its major weakness in penetrating fashion-oriented places such as London, Paris and New York whereby fashion element of UNIQLO products are very limited. some other weakness is that UNIQLO belongs to a multi-layer distribution structured industry distribution digestibleness is hard, leading to clogging in distribution inventory. UNIQLO is also originally intentional for low-end c onsumers and that they will face a head-to-head competition with all kinds of market such as high end, high street, ethical consumers and cut-price shoppers when direct a colossal. In some places, profitability is largely determined by the opportunities of retail season like back-to-school and holidays. In both cases, UNIQLO must already embrace the necessary managerial and operational competences prior to establishing a presence in these places but in the case that UNIQLO would not be able to beg on being responsive enough to these threats this will partake the business results.3) OpportunitiesBelonging to an industry where fashion and apparel market trends are unending, UNIQLO is operational in a global business where companies direction and business activities are always expanding. Globalisation provides the apparel industry with grater simultaneity with the help of engine room, facilitating the convince of information with speedier level. Because of interdependence, free trade zone has also seen as advantageous because fashion, textile and apparel markets became borderless. While also making larger profits, UNIQLO could decorate in neighborly influence or its corporate kindly responsibility. Whats left-hand(a) hand for UNQILO is to grab the opportunity of a faster information and knowledge pitch from these locations through a full force IT integration including the customers. The teenager market is also another opportunity the UNIQLO could exploit since this group is very punctilious in value shopping and they have preferences of where to shop and how to shop.4) ThreatsChanges in economic conditions, changes in consumption trends and intense competition are just deuce-ace of the treats that UNQILO, and all other apparel firms, is currently facing. Foreign currency affects the business conduct of UNIQLO because of the locational position of the operations. Johnson and Scholes (2002) relate that strategic positioning is an imperative in realis ing the strategic capabilities of organisations. UNIQLO has a geographically dispersed operation fashion designers are in Tokyo, New York and Paris, garnering first hand information in fashion trends manufacturing departments are in China where cheap labors reside headquarter is still in Japan which takes responsibility in strategic decision making. Labor and materials could vibrate depending in the performance of yen comparable to US dollars. In events that the economy of either one of the mentioned locations drifts, UNIQLOs operation will be shaken. In addition, the apparel industry where UNIQLO plays as a major player is contaminated with customers influences where the possibility of switching brands is always a possibility.ConclusionDescribed as the similar of Gap, UNIQLO is increasingly becoming known in the global apparel industry. UNIQLO act to be a brand of preference because of the quality, simplicity, functionality and cheaper prices of the merchandises. Although UNIQLO is politically influenced by CEPA and US-China memorandum, UNQILO invests only on opportunities that are profitable, advantageous and will purport the continuous geographic expansion of the company. UNIQLO has an advantage when it comes to individual spending basically because clothing is a basic need. While at it, however, UNIQLO must not ignore the social aspects of doing business which is to provide people empowerment when it comes to giving to the government through tax. The company is also committed in enhancing customer service through acquiring the VOC.Entering the apparel market is relatively easy however, new entrants must face the challenges of building brand awareness and coping with the emergences of new trends. There are at least five major rivals for UNIQLO Bossini, Giordano, Muji, Gap and Benetton. All these rivals are involved in continuous product differentiation since, depending on the fashion trends, substitutes could instantly emerge. Because of the SPA model, UNIQLOs processes are inherently elevated sense of ownership in process responsibilities is the key. The plenitude em high, sell em cheap concept, as well, is an attribute unique to UNIQLO. In sum, the prevalent strategy at UNIQLO is the continuous domestic and global expansion and low cost production and management, achieved through continuous strengthening of the already good brand, ownership of processes, obtaining the VOC, sound distribution and inventory control and efficient store operations.To evaluate, the current strategies of UNIQLO are providing the business with immense profitability and growth. However, UNIQLO already has a record of mistake in focusing more and prioritising international expansions thereof hurting the reputation of the company specially in terms of managerial capacity, expertise and competence. There remains the fact that the products lag behind the quality of the products generated from the fashion centers of the worldwide considering that design ers are already in that places. A fact also is that UNIQLO has an immature experience curve in aspects of global market perceptiveness. Shutting down of 16 of the 20 stores in the UK in 2001 and 3 stores in New Jersey are clear-cut evidences of the incompetence on the side of UNIQLO. Global integration proved to be futile especially because UNIQLO is easily shaken up by global economic changes. UNIQLO admits that the closure of the New Jersey stores is because of the recent recessions and investment drifts in the US. In the UK, stores face up closure because of the failure to recognise the consumer preferences of Britons, which are very different with that of Asians and Nipponese per se.There are two recommendations for UNIQLO Asian market integration and composition on an online shopping site. The first centers the idea that UNIQLO is an Asian product and must be initially offered to Asian consumers. The appreciation of Asian consumers, though they also vary depending on indivi dual cultures, would be much higher compared to that of the westsideners. There are several fashion or brand oriented countries in Asia that UNIQLO has yet to discover such as the Philippines, for instance. Filipinos consider clothing as a staple and the apparel industry in the country is a booming industry. Nonetheless, Filipinos have the invest in quality perception where quality is the primary concern and price is secondary but if there are products that combine these two features, it will be much appreciated. In addition, export costs would be limited.Online retailing is a proven successful endeavor. unalike types of markets and industries are growing because of globalization and the introduction of new information technologies, as well as the pioneer which is the Internet. The key requirements are now refer in quality, speed-to-market, flexibility, innovation, networks, customer service and customization. Internet advertize or sometimes called, as web advertising is a type of advertising in which a person can coStrategic Management at UNIQLOStrategic Management at UNIQLOIntroduction Dubbed as Japans retail success story in the new millennium, UNIQLO is a 100% consolidated subsidiary of Fast Retailing Co. Ltd, a Nipponese retail holding company. UNIQLO organise the portmanteau for unique and clothing as am emblem of creativity and individuality of Japanese apparel industry. UNIQLO offers fashionable and high quality clothing at reasonable prices, and was seized as an opportunity to establish a brand position domestically and internationally, combining all the facets of the business from product design to final sales and the operation of the 790 stores around the globe. Primarily offing for a highly brand conscious consumer group, UNIQLO envisions itself as a leading global casual wear company targeting high sales and profitability growth. For UNIQLO, such aim could materialise based on the established strategies such as low cost management, cheapest manufacture and marketing schedules and prioritising customer requirements.Today, UNIQLO is described as the apparel giant Gap, Inc.s counterpart based on the 4, 000% share price increase, making UNIQLO as Japans third largest clothing retailer. However, it is not always victory for UNIQLO the subsidiary also has its own share of downturns especially on its international expansion. For instance, expansion programmes in the United Kingdom (UK) saw a tumultuous stumble in profits, forcing Fast Retailing to shut down 16 of the 21 UNIQLO stores opened, because of competition. Most recently, third UNIQLO stores in New Jersey were also closed because of economic slumps. Despite these facts, UNIQLO maintains the spirit and still believed that the brand has only but way forward. How UNIQLO will going to do such is central to this paper, focusing on the companys strategic management. External, industry and competitor analysis as well as the internal environment will be addressed.External An alysisPolitical Analysis Political factors have direct impact on business conducts and operations. Decisions made by the affects the decision-making of retailers and could come in the form of policy or legislation. In Hong Kong, the one country, two systems is the prevalent organisation philosophy which endows the special administrative region with a high pointedness of autonomy and its capitalist economic system. Within a capitalistic and free market-oriented economy, retail companies make the majority of microeconomic decisions but they have to conform to specific agreements. Mainland and HK Closer Partnership Economic Arrangement (CEPA) and the US-China Textile chronicle of Understanding are two examples of this. The former provides UNIQLO with a tariff-free treatment, stating that products which have no existing CEPA rules of origin will enjoy tariff-free treatment upon applications by topical anaesthetic manufacturers. The latter could provide UNIQLO with an opportunity for an annual growth of 8-17% in 21 categories of Chinese textiles and clothing exports to the US. Labor and customary regulations as well as code of conducts are also complied into including China Social Compliance 9000 and US and EU quotas (RSCA 2006 Doshi 2006).Economic Analysis Domestically and globally, businesses are also being affected by economic factors whereby a strong economy indicates positive results and weak economy signifies the opposite, affecting both businesses and consumers. Hong Kongs gross domestic product is estimated at US$206.7bn with the service sector that contributes 90% of the total GDP. The region is also named as the worlds eleventh largest trading entity. Almost 50% of the total population is employed full-time and the unemployment rate has a continuous norm decline by 4.1%, making disposition of income a possibility, a lower cost of living that is (Monthly Digest 2008). Spending is generally devoted for food, housing, healthcare, transportation, amuseme nt, services and apparel. People nowadays are very particular with investing in quality clothing thereby resume spending with premium apparel finds (Doshi 2006). Realising this, the price and quality characteristics of UNIQLO has a strategic fit UNIQLO makes people look fashionable and confident in world-class clothes at a reasonable price through the company-wide integration of the Specialty Store retail merchant of Private Label Apparel (SPA) model, a low-cost but effective operation model.Social AnalysisDemography or the population characteristics may determine buying patterns and that understanding demographic changes within a particular region or place facilitates determining whether products and services would appeal to customers as well as the number of potential customers (Barney and Hesterly 2006, p. 35). Hong Kong has a total of 6, 985, iii hundred population based on 2008 estimate and is continuously growing due to immigrant influx from Mainland. According to Doshi, pe ople in HK and elsewhere have a growing interest in private labels. Consumers aspired for having private levels on everyday garments. Casual wear from HK which is known for good design and quality has a positive image on global consumers. Nevertheless, international brands are strong in high-end consumers while domestic brands are for low-end consumers (Doshi, 2006). In taking advantage of the wealth of the demography, UNIQLO makes effort on providing high-quality merchandise and generating values to the society by taxes. Further, UNIQLO is a company that is committed in creating positive reputation as manifested in its vision and mission, styles of management, ways of doing business and requirements to employees.Technological Analysis Technological innovations are a priority for the apparel retailing industry but it will remain as labor intensive as it is today. Boosting the industrys productivity, increase in automation has been the recent trend but it is limited on specific func tions, to which mostly require human intervention such as sewing and making patterns. Although there are computerised sewing machines that increase the productivity and reduce training time. Further, the uses of computer system software intended for the industry will be on making rough sketches, printing detail designs and storing of information for easy retrieval. The customer orientation of UNIQLO was basically construed from its website in which customers can give feedbacks by email and discussion board. Hong Productivity Council made a report disclosing that the apparel industry could make sense of information technology (IT) if utilise for order processing, costing analysis, order tracking, material management, reporting and connectivity (2004). perseverance AnalysisPorters Five Forces AnalysisA) Threat of Entry Barney and Hesterly (2006, p. 43) point out that new entrants are the firms which have either recently begun operations or those that threaten to begin operations with in an industry soon. Notably, the apparel industry is a buyer-driven industry where producers are considering buyers decision-making especially when brand names enter the picture. These buyer-centric industries have low barriers to entry mainly because of intense competition. Utilising brands as a market power source however, this is a challenge for every clothing company. In the clothing business, mass customisation has seen to be the most effective strategy. lay strategises into action remains to be in resilience today (Culpan 2002). Therefore, the focus must be on minimising the costs without sacrificing quality and to do this, managerial know how is a must in order to understand interactions with suppliers and consumers, to facilitate creativity and innovation and to maintain mobility in adapting to new market demands (Kincade, Regan and Gibson 2007). build brand awareness and consumer loyalty is a costly endeavor since it involves advertising needed not only to promote the bra nd but also on sustaining awareness and loyalty. Strengthening brand names also requires that there are quick response programs to increase revenues and manage risks. One of UNIQLOs major resources is its brand name, which is now synonymous with comfortable, high quality and cheap clothing merchandises. Although brand awareness outside the home country is a challenge, it is of intangible asset value to UNIQLO as a business asset. Brands are valuable and ancient and reputable brands are acquired through the impressions one has of the company, and its products or services. Since a brand name is built overtime it becomes costly to imitate thereby providing a sustainable competitive advantage in the apparel industry (Groucutt, Lydley and Forsyth 2004, p. 285).B) Threat of Rivalry Either in home or host countries, apparels, accessories and merchandise will always have a competitor which usually weaves in size. The modern market trends for the apparel industry are globalisation and in crease competition, increasing price and lower profit margin pressures, small metre with high complexity orders, shorter lead times, multiple location operation, changing customer requirements and liberalisation on textile and clothing quota that creates new market dynamics. being responsive to these market trends shifts the focus of the apparel industry for more prolonged product development and improvements at the least possible cost. Such condition forces companies to divert on product differentiation because of high switching cost. In an industry where products are deemed to be equal, the key sources of differentiation are brand image, reputation and prior existence (Byoungho 2004b). For UNIQLO, the products themselves are an important source of competitive edge. UNIQLO strives at developing products of high quality, in various collections to enable the company to reach the highest possible number of customers. As such, the rivals would be endangered when it comes to introduc ing innovative products. UNIQLO is positioned in the fashion capitals of the world for the purpose of taking advantage of the new information about fashion trends. UNIQLOs ability to quickly adapt to trends and new markets has helped them develop product differentiation, something that is key to the companys success in the apparel industry. According to Tokle (1990), product differentiation is what separates the top competitors from the rest, but it something that is not costly to imitate. This is why their product differentiation is only a temporary competitive advantage. free-enterprise(a) advantage could be achieved once the organisation learns to manage its capabilities that the end consumers could appreciate and competitors would find difficulties imitating (Porter 1985 Roney 2004).C) Threat of Substitutes Casual wear is very particular with loose-fit, comfortable and relaxed fit. Athletic or active wear was perceived to be the walking(prenominal) substitute to casual wear as manifested by the booming acrobatic wear industry. Typically worn as casual fashion clothing, active attires could provide deterrence in the industry. Moreover, the blurring demarcation on the casual clothing family could be also seen as an opportunity for substitutes. Specialised stores offer semi-casual, suffer casual and business casual lines. Semi-casual clothes are less presentational than informal but are not as loose as casual dresses. Smart casual purports conservative looks but with harmony on colors, fabrics, shoes and accessories. Business casual, on the other hand, varies in definition but the common element is the collar. Realising this, the bottomline now is the price. Moreover, based on the SPA business model, all the necessary functions at UNIQLO falls under a single umbrella especially the inbound logistics and the production. UNIQLO is an example of a cut-make-trim company in which in which the company purchase the fabric and retain ownership of the raw materials and work-in-process, and so making it hard for rivals to imitate or produce substitutes for UNQILO brands.D) Threat of Suppliers The prices and availability of commonly used fabrics such as cotton, blends, synthetics and wools might fluctuate significantly due to its dependence on demand, crop yields, weather, supply conditions, transportation costs, government regulations and economic condition among others (Byoungho 2004a). Quota is the major factor that affects the demand and supply of textile and fabrics. Even though the sale of raw materials is standardised, independent contractors, raw material suppliers, importers and apparel manufacturing firms could not isolate themselves from such scenario because of the prospective unsteadiness in the supply chain (Chetty 1999). As well, because of forward vertical integration, couple with the low barrier to entry, suppliers could easily become rivals. In becoming threat of entry, suppliers could be also become a competitor to already e stablished apparel manufacturers. In addition, contractors is also one of the threats when the demand of the labor increases, it will cause labor costs price inflation. Laszlo (2008) stress that there are five main parts of the apparel value chain including raw material supply, provision of components production networks export channels and marketing networks at the retail level. Through the process, UNIQLO has an ownership on production and thereby a complete control on the supplies procurement. UNIQLO insources its production and handles the majority of the operational details. Sourcing is a go-to in the apparel industry but it is not rare although it can add value to UNIQLO.E) Threat of Buyers Reaching more and diverse eat group, the apparel industry is both a stable and unstable industry. durable because quality price and quality products are the main element and unstable because there are many factors that affect both price and quality. In the point of consumption, for instan ce, there are middle men such as the retail stores that offer an array of brands. In purchasing manufactured apparel, retail stores could have influence on making significant requirements and demands on their purchase, affecting prices. Though quality is inherent, prices would not be reasonable at all, and alternate(a) clothing is readily available. This explains why apparel manufacturing companies are setting up their own stand along stores which will cater to their own produce. historic is that apparel stores must not fall dependent on s specific class of customer. Buyers are increasingly appearing to prefer above standard apparel with a much lower cost, making apparel less differentiated. When selling directly to consumers, buyers would incur a significant percent of their dispensable cash. Same goes with retail store, they purchase apparel at the least possible final cost, but adds up to prices of apparel. UNIQLO is involve in selling to the customers through specialty store marketing, with a minimalist strategy of pile em high, sell em cheap concept that is. In addition, the unbranded fashion or the no-logo concept was perceived to be the main reasons for peoples fond(p) attention (Williamson 2007 Parrish, Cassill and Oxenham 2006). Competitor AnalysisLocal Competitors1) Bossini There are common chord competitors for UNIQLO Bossini, Giordano and Muji. Bossini International Holdings Limited is an apparel brand owner, retailer and franchiser nestled in Hong Kong. From its onset in 1987, Bossini continued to grow both domestically and internationally. Today, the global distribution network is comprised of 551 directly managed and franchised outlets in Mainland, 322 export franchised outlets, 178 directly managed outlets in Hong Kong, Taiwan, Singapore and Malaysia and 1, 051 outlets in 20 countries. Taking pride on its Bossini brand that is comfortable, easy to mix-and-match, colorful and energetic like the Family-Fit brand, Bossini was able to cater to various consumer requirements in a value for money fashion (Bossini Annual Report 2006/2007). The strength of the brand and the people was drawn from the seven practices face reality, keep it simple, act with the speed of light, set stretch goals, drive quality, create and sustain a learning organisation and keep the A, nurture the B and toss out the C. Through this set of practices, Bossini puts emphasis on quality, efficiency and profitability as a source of competitive edge. The company is also continuously building brand awareness by means of innovative cross-regional marketing activities. In enhancing its supply chain, Bossini shorten the product cycle from design to store and will continue to build string ties with them in a proactive manner. construction up an IT system is a strategy meant to drive future growth and profitability. Though the company deals with closure of unsuccessful outlets whenever necessary to divert their attention to areas which needs a closer concentr ation and with participating in broad campaigns and dual-branding to promote the products and to expand market reach, Bossini is more focused on its four core markets.2) Giordano Established in 1981, Giordano is one among the popular and established casual apparel retailer in Asia Pacific Region which employs about 11, 000 provide with over 1, 895 shops operating in 30 territories worldwide. From its restructuring from 1986, the company prepared for international expansion, which was made possible by the initial success in Hong Kong, Mainland and dwell countries such as Taiwan and Singapore. Known as the most successful homegrown retail stores, Giordano is a pioneering company that participated in drafting of code of practice in the retailing scene and introduced innovations such as the total shopping experience where customers are greeted individually in the doorstops and bade bye unto when leaving the store. Envisioning itself in making people feel good while looking great, the companys main strategy is its For the People philosophy wherein quality, knowledge, innovation, service and simplicity are at the core. As an apparel of choice, Giordano is also committed in providing simplicity of design, quality workmanship, attentive customer service and value-for-money, allowing the company to strongly build its own loyal following (Giordano 2008). Though the four brands Giordano Ladies, Giordano Concepts, Giordano and Giordano Junior are constantly profitable, the weakness is that Giordano has a limited range of products and that consumers may grew tired of the existing concepts.3) Muji Ryohin Keikaku, better known as Muji, is an process from The Seiyu, Ltd. In becoming a separate brand, Muji develops range of apparel, household goods and food that takes pride on being functional, simple and of high quality.Literally means no brand, the over 700 Muji products observes the philosophy of simplicity. Primarily purporting an individualistic and diversified life style, Muji follows three processes that is said to be the reason for proving good quality products at lower prices. These are selection of materials, streamlining processes and simplification of packaging.The companys emphasis on preventing materials wastage and improvement of intrinsic product quality as well as time and labor optimisation are the key in achieving operational effectiveness and efficiency. The selection of materials is a very important stage for Muji where suitable raw materials are the main concern. Bulk buying is a strategy wherein quality is the subjective criterion, underpinning the possibility of producing high quality, low prices products. Thereby, the weakness is on changes in demand and supply of raw materials. Standards at manufacturing stages are also under close scrutiny in order to eliminate waste and reduce cost. When it comes to packaging, Muji sticks to the simplicity philosophy, bearing only product related information and the price tag (Ryohin Ke ikaku Co., Ltd.).International Competitors4) Gap Gap, Inc. and United Colors of Benetton are the two international competitors for UNIQLO. Gap, Inc. has been officially incorporated in 1988 as a global specialty and outlet store which offers casual apparel, accessories and personal care products. Gap, Banana Republic, honest-to-god Navy and Piperlime are the four primary brands. As a way of building the value of the brands, Gap is very fastidious with brand development, ensuring that value will be integrated from product design to distribution onto marketing, merchandising and shopping environments. The strong point of Gap is its continuous commitment in enhancing the brand in fact, Gap has an intensive portfolio of brands covering classically styled, high quality, casual apparel at moderate prices for virtually all ages. However, the weakness is on inventory turnover. Emphasising style, quality and good value, Gap embraces a shopper intimate environment where store facades vary d epending on selling season, size and location of the store. Just like UNIQLO, Gap is never threatened of closing under-performing stores and expanding and remodeling existing stores (Gap Annual Report 2006). 5) Benetton A global clothing brand which is based in Treviso, Italy, the name Benetton originated from the Benetton family who founded the company in 1965. Now in existence in over 120 countries, Benetton started with only 5 stores in 1979 which were bound to reach 800 stores today. The 5, 500 network of contemporary stores worldwide are the reason for generating a total turnover of 2 billion euro. Fashion apparel is the core business wherein quality, style and passion through the brands such as United Color of Benetton, Sisley, Playlife and Killer Loop are the main concerns. meld energy, colors and practicality, Benetton offers a portfolio of products for men, women and kids. The strength is in its innovation and IT integration in producing 160 million garments annually. At Benetton, superior product quality is achieved through committing every stage of the production process with innovation and creativity. The weakness is on the tendency for incoherent diversification (Benetton website 2008). Common to all the competitors of UNIQLO, either domestic or international, is the international expansion strategy known as the judo strategy or the conscious decision to move rapidly into new markets where there is uncontested ground.(Hilburt-Davis 2002), and providing the best value of money based on transparent brands. Product differentiation, low cost production and gateway market penetration like UK and the Mainland are other strategies that these competitors pursue, in the same way like UNQILO is doing. It is important that brands must conform to the needs of the customers of varying age structures and preferences and producing brands where value was mounted from the very first step. Quality and customer service are the main concerns, followed by style or design and functionality. Brand development and building brand awareness as well as the overall look of the establishment are also the priorities. Common also to Bossini and Gap is the closure of unproductive stores/outlets while Benetton takes pride in its IT integration in production. Bossini also engages in dual-branding in terms of marketing. Since it is also common to all of these competitors to conceptualised product portfolio, the weaknesses are on incoherence in diversifying the products, apart from inventory turnover and focusing on core markets. Typically, when these scenarios happen production will be affected and it would not be advisable for those companies which are into good deal buying especially that the styles are immediately paced out. For UNIQLO, the weaknesses of the domestic and global competitors could be reaped off as new strategies and the strengths could be manipulated as new advantages. The UNIQLO could be upgraded in opening flagships stores in every ga teway market so as to equally diversify brands and gateway locations, catering to all forms of demographics. For UNIQLO, product mix and shopping spree would be plausible especially if it will come in bolder shades, with better quality and cheaper prices, but are manufactured based on forecasted demands. To take advantage of the opportunities that competitors impose, UNIQLO must also open its horizon into new product trends including the silver market and the plus-size market as part of the brand concepts. Although all of the competing companies including UNQILO are into casual, everyday wear, what will set UNQILO apart from them is the potential of easy care clothing where fabrics are very fluid and/or wrinkle free. Internal AnalysisSWOT Analysis1) Strengths UNIQLO was deemed successful because of its commitment in divergence which supports the individuality of each family process as well as those with fashion-forward and edgy people. These products are of expected high quality be cause of the effective global materials procurement. Given this, UNIQLOs products are designed pair with the customer requirements and worldwide markets trends. Voice of the Consumer (VOC) is one of the key in building the most effective brands. For UNIQLO, however, this is not enough, it should be joined with direct net in value chain process and doing it through a low-cost, quality-driven manner. In the post production stage, it is also important for UNQILO to obtain effective distribution management and inventory control. UNIQLO is an expert in store development thereby efficient store operation in addition.2) Weaknesses Japan and Fast Retailing are devoted in simple, functional clothing with minimalist clothing details rather than cutting edge, extravagant clothing. This is the mark of UNIQLO, but could also be its major weakness in penetrating fashion-oriented places such as London, Paris and New York whereby fashion element of UNIQLO products are very limited. other weaknes s is that UNIQLO belongs to a multi-layer distribution structured industry distribution digestibility is hard, leading to clogging in distribution inventory. UNIQLO is also originally designed for low-end consumers and that they will face a head-to-head competition with all kinds of market such as high end, high street, ethical consumers and cut-price shoppers when operating abroad. In some places, profitability is largely determined by the opportunities of retail season like back-to-school and holidays. In both cases, UNIQLO must already acquire the necessary managerial and operational competences prior to establishing a presence in these places but in the case that UNIQLO would not be able to tap on being responsive enough to these threats this will impact the business results.3) Opportunities Belonging to an industry where fashion and apparel market trends are unending, UNIQLO is operating in a global business where companies direction and business activities are always expanding . Globalisation provides the apparel industry with grater simultaneity with the help of technology, facilitating the exchange of information with speedier level. Because of interdependence, free trade zone has also seen as profitable because fashion, textile and apparel markets became borderless. While also making larger profits, UNIQLO could invest in social influence or its corporate social responsibility. Whats left for UNQILO is to grab the opportunity of a faster information and knowledge graft from these locations through a full force IT integration including the customers. The teenager market is also another opportunity the UNIQLO could exploit since this group is very precise in value shopping and they have preferences of where to shop and how to shop.4) Threats Changes in economic conditions, changes in consumption trends and intense competition are just three of the treats that UNQILO, and all other apparel firms, is currently facing. Foreign currency affects the busines s conduct of UNIQLO because of the locational position of the operations. Johnson and Scholes (2002) relate that strategic positioning is an imperative in realising the strategic capabilities of organisations. UNIQLO has a geographically dispersed operation fashion designers are in Tokyo, New York and Paris, garnering first hand information in fashion trends manufacturing departments are in China where cheap labors reside headquarter is still in Japan which takes responsibility in strategic decision making. Labor and materials could fluctuate depending in the performance of yen comparable to US dollars. In events that the economy of either one of the mentioned locations drifts, UNIQLOs operation will be shaken. In addition, the apparel industry where UNIQLO plays as a major player is contaminated with customers influences where the possibility of switching brands is always a possibility. Conclusion Described as the eq of Gap, UNIQLO is increasingly becoming known in the global appa rel industry. UNIQLO continued to be a brand of preference because of the quality, simplicity, functionality and cheaper prices of the merchandises. Although UNIQLO is politically influenced by CEPA and US-China memorandum, UNQILO invests only on opportunities that are profitable, advantageous and will purport the continuous geographic expansion of the company. UNIQLO has an advantage when it comes to individual spending basically because clothing is a basic need. While at it, however, UNIQLO must not ignore the social aspects of doing business which is to provide people empowerment when it comes to giving to the government through tax. The company is also committed in enhancing customer service through acquiring the VOC. Entering the apparel market is relatively easy however, new entrants must face the challenges of building brand awareness and coping with the emergences of new trends. There are at least five major rivals for UNIQLO Bossini, Giordano, Muji, Gap and Benetton. All t hese rivals are involved in continuous product differentiation since, depending on the fashion trends, substitutes could instantly emerge. Because of the SPA model, UNIQLOs processes are inherently rare sense of ownership in process responsibilities is the key. The pile em high, sell em cheap concept, as well, is an attribute unique to UNIQLO. In sum, the prevalent strategy at UNIQLO is the continuous domestic and global expansion and low cost production and management, achieved through continuous strengthening of the already reputable brand, ownership of processes, obtaining the VOC, sound distribution and inventory control and efficient store operations. To evaluate, the current strategies of UNIQLO are providing the business with immense profitability and growth. However, UNIQLO already has a record of mistake in focusing more and prioritising international expansions thus hurting the reputation of the company specially in terms of managerial capacity, expertise and competence. T here remains the fact that the products lag behind the quality of the products generated from the fashion centers of the worldwide considering that designers are already in that places. A fact also is that UNIQLO has an immature experience curve in aspects of global market penetration. Shutting down of 16 of the 20 stores in the UK in 2001 and 3 stores in New Jersey are clear-cut evidences of the incompetence on the side of UNIQLO. Global integration proved to be futile especially because UNIQLO is easily shaken up by global economic changes. UNIQLO admits that the closure of the New Jersey stores is because of the recent recessions and investment drifts in the US. In the UK, stores confront closure because of the failure to recognise the consumer preferences of Britons, which are very different with that of Asians and Japanese per se. There are two recommendations for UNIQLO Asian market integration and establishment on an online shopping site. The first centers the idea that UNIQL O is an Asian product and must be initially offered to Asian consumers. The appreciation of Asian consumers, though they also vary depending on individual cultures, would be much higher compared to that of the Wester