Uniqlo Case Study
Lingnan University
Strategic Management MGT 604
Case Study 1 – Uniqlo
Student’s name: Qin Hao (Coco)
Student’s ID: 7902594
Submit date: 2015,2,13
1. Describe the basis of Uniqlo’s competitive strategy. That is, what does it offer that its competitors do not, that keeps customers coming back?
The primary competitive advantage of Uniqlo is offering high-quality clothes with lower price. The competitive strategy that Uniqlo pursues is the overall cost leadership strategy. It has low-cost-position relative to its peers thus it can offer lower prices to customers. In addition, Uniqlo provides more choices in colour by selling the same items in many colours, which adds value and can appeal to a wider audience. In other words, succeeding in details of styles, colours and quality contributes to the basis of Uniqlo’s competitive advantage.
2. How has Uniqlo managed to develop its competitive advantage? What does it do as a company that allows the strategy described above to work?
Statistics of its revenue and profits growth in 2009 shows that Uniqlo managed well to develop its competitive advantage. Compared to Inditex, Gap, and H&M, Fast Retailing has the highest sales growth rate of 22% in 2009. The boost sales indicated the firm is very close to the target.
To achieve low-cost-position, Uniqlo narrowed its product lines. Different from Zara and H&M who bring the latest fashions to the mass quickly by ordering new lines many times a year, Fast Retailing avoids chasing after ‘fast-fashion’ trends by selling far fewer items (only around 1000 items) and keeps them on the shelves longer. This lets the company strike low-priced, higher-volume deals with suppliers and makes managing inventory a much simpler and cheaper affair. In addition to narrowing its offering, Uniqlo sells the same item in many colours. Such basics added benefit of appealing to a wider target audience. Moreover, the
Strategic Management MGT 604
Case Study 1 – Uniqlo
Student’s name: Qin Hao (Coco)
Student’s ID: 7902594
Submit date: 2015,2,13
1. Describe the basis of Uniqlo’s competitive strategy. That is, what does it offer that its competitors do not, that keeps customers coming back?
The primary competitive advantage of Uniqlo is offering high-quality clothes with lower price. The competitive strategy that Uniqlo pursues is the overall cost leadership strategy. It has low-cost-position relative to its peers thus it can offer lower prices to customers. In addition, Uniqlo provides more choices in colour by selling the same items in many colours, which adds value and can appeal to a wider audience. In other words, succeeding in details of styles, colours and quality contributes to the basis of Uniqlo’s competitive advantage.
2. How has Uniqlo managed to develop its competitive advantage? What does it do as a company that allows the strategy described above to work?
Statistics of its revenue and profits growth in 2009 shows that Uniqlo managed well to develop its competitive advantage. Compared to Inditex, Gap, and H&M, Fast Retailing has the highest sales growth rate of 22% in 2009. The boost sales indicated the firm is very close to the target.
To achieve low-cost-position, Uniqlo narrowed its product lines. Different from Zara and H&M who bring the latest fashions to the mass quickly by ordering new lines many times a year, Fast Retailing avoids chasing after ‘fast-fashion’ trends by selling far fewer items (only around 1000 items) and keeps them on the shelves longer. This lets the company strike low-priced, higher-volume deals with suppliers and makes managing inventory a much simpler and cheaper affair. In addition to narrowing its offering, Uniqlo sells the same item in many colours. Such basics added benefit of appealing to a wider target audience. Moreover, the