Strategic Management At Uniqlo
Introduction
Dubbed as Japanrsquo;s retail success story in the new millennium, UNIQLO is a 100% consolidated subsidiary of Fast Retailing Co. Ltd, a Japanese retail holding company. UNIQLO formed the portmanteau for acirc;euro;tilde;uniquersquo; and acirc;euro;tilde;clothingrsquo; 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.rsquo;s counterpart based on the 4, 000% share price increase, making UNIQLO as Japanrsquo;s 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, three 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 companyrsquo;s strategic management. External, industry and competitor analysis as well as the internal environment will be addressed.
External Analysis
Political 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 acirc;euro;tilde;one country, two systemsrsquo; is the prevalent governance philosophy which endows the special administrative region with a high degree 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 Memorandum 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 local 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 Kongrsquo;s 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 worldrsquo;s eleventh largest trading entity. Almost 50% of the total population is employed full-time and the unemployment rate has a continuous average 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, amusement, services and apparel. People nowadays are very particular with acirc;euro;tilde;investing in qualityrsquo; 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 Retailer of Private Label Apparel (SPA) model, a low-cost but effective operation model.
Social Analysis
Demography 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, 300 population based on 2008 estimate and is continuously growing due to immigrant influx from Mainland. According to Doshi, people 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 concentrated 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 industryrsquo;s productivity, increased in automation has been the recent trend but it is limited on specific
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