Write-up

M Tauqier

Umar Farooq

Umar Mehmood Khan

UNIQLO
The main focus of this case study is to discuss the strategy about how to make UNIQLO the
largest apparel retailer and achieve sales of two trillion Japanese Yen per year. Their main focus
was to increase their customers flow, and to retain their old customers. Also, the main emphasis
of this case study is on the positioning and the strategies of their competitors, and that how
UNIQLO over-come those issues. The main strategy that UNIQLO adopted was of playing
through their Unique Selling Point. They made their advertisement campaigns to improve their
brand positioning, and while focusing on their Unique Selling Points.

If we talk about the fashion industry in which UNIQLO was competing, it was very fast pace
because of new trends coming daily nowadays. UNIQLO is the most successful brand of a very
fast retailing group. It contributed 80% of the total sales of the group. They have customers of a
wide range, but the main target segment is of women between the age of 25 – 35. Their main
product is casual wears, and they offer high quality in low prices. The business model of the
company is also very well-structured, and customer focused. They have a very strong R&D
department from where the guidelines are given to the head office. They have been using SPA
model since the beginning. They coordinate and maintain control over the entire production
process. In start they relied on major trade houses, like Mitsubishi for getting raw materials on
low costs.

UNIQLO’s position was of high industrial rivalry in the market. The main competitors of
UNIQLO were Gap, H&M, Zara, and American Apparel. The main strengths of these companies
were that they were targeting all, women’s, men’s, and kid’s ranges. All of these brands were
internationally present, and also very well-known and successful in terms of customer
acquisition. These companies are also known as market leaders in that segment, and are very
famous among younger generations which are more focused on buying good clothes. However,
they also had weaknesses like their clothes doesn’t appeal to older age people. They also didn’t
have much online presence in those countries where UNIQLO was operating, they didn’t have
proper websites. They were also not making a good use of technology, and relying on old
traditional operations methods.

The main strategies of the competitors were to expand into Asian countries, where people are
demanding quality products in economical prices. They also started to increase their online
presence in order to reduce the costs and meet customer’s demand of convenience. They made an
effective, and organized supply chain management system to control inventory and
merchandising. They also increased the emphasis on unique designs and making patents. They
also cut their costs in different possible ways.

On the other hand, the strengths of UNIQLO were that it was a market leader in Japan. It offers
quality products in economical and very reasonable prices. It also caters people from all age
groups including both young and older people. It also was growing rapidly in different markets,
and thus creating a good brand image. It was always trying new methods to sell their products,
which also included using new technology. They tried to be environmentally friendly to attract
younger generations which are very conscious about the environment. They were also doing
Research and Development in Hi-tech fabric to cater different needs of the customers, in
different environments. The main weaknesses of UNIQLO were that their clothes were totally
plain without any patterns. All clothes weren’t available on the website. There was a huge
inconsistency between their advertisement and marketing campaigns. Their simple approach of
going without logo was also not much appreciated and liked by UK customers. Another big
weakness of them was of having just one supplier.

Asian markets like China, Japan, and Korea were growing rapidly, and the European market was
a little troubling because of easier entrance. There was intense competition in the market, and the
brands were differentiating themselves by following the trends, therefore there was a very low
brand loyalty in this market. The Unique Selling Point of UNIQLO was of being a Japanese
market leader. Japanese fashion is very liked and focused on by the global fashion leaders, and
celebrities. So, in that way UNIQLO got the competitive edge by focusing on their Unique
Selling point, and established itself as a Japanese fashion led brand.

One of the reasons why UNIQLO became a successful global competitor is due to their unique
implementation of their company’s hybrid form to unify their corporate governance and
competitive advantages.

UNIQLO managed to achieve differential competitive advantage against their competitors in the
fast-retailing business, by being the world’s only “LifeWear” and Innovation brand. This meant
to create everyday clothes for a better “Life- High- Quality, Fashionable, Affordable,
Comfortable, Practical Performance & Function”. To create new innovative technology and
high-quality clothing, UNIQLO created a certain system of rules and practices, to keep up their
high-quality standard to affordable prices which also enabled them to keep their competitive
advantages in check.

With UNIQLO being unable to meet their minimum order quantity, in their early years (1984),
they revised their company structure and changed their sourcing strategy by taking direct control
of the supply- chain management. They also developed a three-step plan, to ensure a detailed
analysis of every production process, identify systematic quality issues, strict quality control of
stock keeping units and to work daily with staff in China to tackle production issues as they
arise.