SMP Thesis Defense Presentation

“MUJI recently has closed several stores in

Europe due to unprofitability.
What changes in strategic marketing plan
should MUJI apply to remove cultural
barriers and gain competitive advantage in
the European market?”

Anh Doan AAUNI Spring 2018

 Introduction
MUJI’s current situation in Europe
Financial Analysis

Assumptions
Marketing Audit
Agenda PLEESTIC
SWOT Analysis
Porter’s Five Forces
Current Strategic Marketing Plan
Gap Analysis
Evaluation
Recommendations
Conclusion
Introduction (1)
Ryohin Keikaku Co., Ltd. or MUJI is a Japan-based
distributor and retailer of household, food, and apparel
products

Headquarters Tokyo, Japan

Total revenues $63.4 billion

6,766,250,000 yen

Number of 6,992
employees

Founded June 1989

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Introduction (2)

Regions Product Portfolio

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MUJI’s current situation in Europe

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Financial Analysis

MUJI REVENUE FROM OPERATIONS YEAR ON

YEAR (MILLION YEN)

Gross Net profit ROE

Margin margin

2013 46,04% 7,75% 12.5

2014 46,08% 7,03% 17.0

2015 46,97% 6,39% 14.3

2016 48,81% 7,79% 16.4
2017 49,55% 5,82% 17.7

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 Table 13: MUJI- Liquidity Ratios

Current Ratio Quick Ratio Total Debt/Assets

2017 2.64 1.1 0.1

2016 2.7 1.3 0.3

Table 14: MUJI Cash Flow from 2013 to 2017

Cash flows from operating

(100 milion yen) 131 151 146 261 197
activities

Cash flows from investing

(100 milion yen) (49) (178) (221) (86) (98)
activities

Free Cash flows (100 milion yen) 82 (27) (75) 175 99

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Assumptions
No brand branding strategy Struggling partnership in Europe

Can be harmful when entering new MUJI heavily depended on their partners in
market logistics and resources including HR and store
locations

Poor online presence and limited

product offers

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Marketing Audit

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PLEESTIC Matrix
Political/Legal Tax burden in Europe
Poor work conditions in manufacturers in developing countries

Economic Increase in labor costs in developing countries and manufacturing costs in China

Environmental Lack of high-quality natural materials

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PLEESTIC Matrix (2)
Socio-Cultural Rising usage of digital devices for shopping
More concerns for environmental protection
Preferences in no-brand and unique products

Technological Growing digitalization – AI, data-driven production process (Brown et al., 2017, n.p.).

International Increasing needs to partner with local organizations to enter foreign markets penses, (Berg,
2013, n.p.).

Competition Intensifying competitions

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SWOT Analysis
Strengths  Weaknesses  Opportunities  Threats

 Unique in-store  Low awareness of  Increasing demands  Yen strength

experience the brand for eco-friendly and  High
 Made-in-Japan quality
 Lack of mobile sustainable competitiveness
reputation
 Efficient streamline platform and online products from Western
production presence  Attractive airport retailers
 Strong customer  Overdependence on store locations
relationship brick-and-mortar  Innovation in
stores logistics and
payment channels

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Porter’s Five Forces

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Current Strategic Marketing Plan

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Current Strategy

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Gap Analysis

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MUJI in Europe MUJI in Asia

Low brand awareness Growing in the number of new stores and develop a strong loyal
customer base

Poor digital presence MUJI passport*

Interactive and responsive website with many support services and
product rating system

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MUJI in Europe MUJI in Asia

High price tags Affordable brand image

Mainstream customer Excessive customer services including household and fashion

services consultation services

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Evaluation
GOOD PRODUCT DEVELOPMENT
PROCESS
UNIQUE APPROACH OF BRANDING
STRONG FINANCIAL SUPPORT
STRONG FORMULIZED CRM AT
CORPORATE LEVEL
POOR ONLINE PRESENCE
SOLE FOCUS ON PHYSICAL STORES
LIMITED MARKETING
COMMUNICATION CHANNELS,
OVERDEPENDENCE ON WORD OF MOUTH
HARD TO MAINTAIN LOW COST
STRATEGIES AGAINST EUROPEAN
MARKET LEADERS
POOR UNDERSTANDING OF LOCAL
CUSTOMERS’ MENTALITY
LOW BRAND AWARENESS
STUCK IN THE MIDDLE 19
Recommendation
s

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Recommendations Investment Risk Priority
Repositioning the brand Differentiation High High 1

Improving the brand awareness by mobile application for Low Low 1

intensive marketing European customers

Change website design

data-driven approach to
merge online and in-
store experience
social media
communications

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Digital revitalization plan Generating online Medium Medium 2

content
Social media
partnership
Exclusive deals

Managing products distribution Effective partnership Medium Low 2

globally
A logistics hub in Europe
Data-driven inventory
management
Transparent shipping and
return terms and
conditions

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 On the right track at the corporate level

Conclusion
In Europe, MUJI has low brand
awareness, poor performances due to
lack of online presence, inappropriate
no-brand branding

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Questions

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Advisor’s Questions
●If Muji decides to start a marketing communication campaign in Europe to
increase its brand awareness, which steps would you recommend starting with?

●Do you think Muji has a chance competing with IKEA? What would be the main
success factors?

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Opponent's Questions
●The recommendation for "digital revitalization" suggests implementing an
application for the European market. Can you justify this recommendation using
recent statistics if these applications truly improve brand awareness and sales?

●From the numerous recommendations you have, can you further explain if you
suggest MUJI to try to revitalize its brand in EU, expand its business here or do
you believe they should expand elsewhere with a fresh start? Explain why.

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Opponent's Questions
●The recommendation for "digital revitalization" suggests implementing an
application for the European market. Can you justify this recommendation using
recent statistics if these applications truly improve brand awareness and sales?

●From the numerous recommendations you have, can you further explain if you
suggest MUJI to try to revitalize its brand in EU, expand its business here or do
you believe they should expand elsewhere with a fresh start? Explain why.

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