Uniqlo Case Study

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FACULTY OF BUSINESS AND LAW

Global marketing
LVL H6
UNIQLO CASE STUDY
Emmanuel Chabaud
2011/2012

* 1: Critical profile of UNIQLO
In this first part, I will try to give the most objective profile of Uniqlo, considering information from both Uniqlo officials (www.uniqlo.com and http://www.fastretailing.com ) and third party analysis (see the additional sourcing page). Originally, Hitoshi Yanai opened a little store called Ogori Shoji in 1949. Uniqlo (abbreviation for Unique Clothing Warehouse) is a brand specialized in clothes for young people at affordable prices, born in Hiroshima, Japan in 1984, where Ogori’s sonTadashi Yanai (Uniqlo actual C.E.O) settled the first Uniqlo store. Since that day, the brand has been expanding very fast, first at a national scale; by 1994 there were 100 Uniqlo stores across Japan under the holding company title of Fast Retailing, then at an international level, starting with the creation of their first overseas store in London in 2001, the very first step towards global expansion. The brand represents 90% of the Fast Retailing mother group turnover based on 2009 figures. The group specializes in designing in-house casual clothing for men and women of all ages, with 2,258 stores under its various group companies spread across Japan, China,South Korea, Hong Kong, Singapore, UK, US, and France In order to explain that growth and success, let’s have a look at their national development strategy. Tadashi Yanai had the simple idea of selling quality products with the best value for money. The system is not based on fashion trends or on the development of new seasonal products; it aims to produce a pretty small range of functional products. That way they can buy large quantities of the same materials, and do great economy of scale. It seems like a simple principle but they applied it in such a way they could reduce their prices and keep a decent margin on the products. As far as the distribution channels are concerned, Tadashi Yanai discovered the “SPA” (Specialty Store Retailer of Private Label Apparel) model, first used by GAP, in the early 80s. Unlike the stores which sell lines made by the other brands, "producer-distributor" sells only clothes of its own brand. Today, if the conception of products is the responsibility of the social siege of the company, their production is often relocated in countries with moderate costs of hand of work. We can say that they have a very direct approach to market coverage. In the economic context of stagnation Japan was in in the early90s, that concept had a great success. Furthermore, Uniqlo has also developed a big system for online sales, and online marketing, which is a cheap and efficient way to get to the customer, providing a huge online catalogue, and a well-designed web-site, proposing a unique site for each country they are in. Uniqlo is present in 11 countries, France, China, Hong-Kong, Japan, South Korea, Malaysia, Russia, Singapore, Taiwan, United Kingdom, and the U.S.A. Quoting the C.E.O “Our focus for future UNIQLO growth is shifting outside of Japan. I am convinced that the opening of our New York Fifth Avenue global flagship store in October 2011 will prove a giant leap forward in our quest to earn worldwide recognition for UNIQLO as a leading Japanese brand”, Uniqlo is definitely looking towards globalization in the future, and the awaited growth seems just tremendous as Tadashi Yanai aims for the stars:” Within a few years, I want us to be able to consistently open between 200 and 300 new stores overseas each year, and I am looking for UNIQLO International to overtake UNIQLO Japan in terms of sales in fiscal 2015.” Uniqlo is planning on strengthening the Japanese market on the first hand, with a fundamental reform of the Japanese apparel, and on the second, making UNIQLO Global, by aiming for Asia first place on the market, and on a long term strategy, aiming for world ‘s first place.

* 2. The internationalization...
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