It aims to analyze various aspects of UNIQLO's business strategies by comparing them to other global brands. Although there are many competitors in the fast fashion market, such as H&M, Zara, The Gap, etc., UNIQLO still has its own characteristics that can attract customers.
Three-Level Strategy
- Corporate Strategies
- Business Strategies Strategic Business Units
- Cost - Leadership
- Differentiation
- Differentiation Focus
- Research and Development(R&D)
- Human resource (HR) Global one
- Marketing
Blocktech, that waterproof, windproof fabric rarely used in making jackets, etc. From a marketing perspective, we explained UNIQLO's marketing strategy through STP analysis.
UNIQLO Strategic Map
- Production
- Customer
- Specialization
- Work with the professionals
Localization: To understand and know deeply the consumers in that market in order to develop a product or service in accordance with the way of life or lifestyle, culture and needs of consumers in each region. 16 in Store: Shop online and pay at the store of the customer's choice or drive-through at the UNIQLO branch on the Street. Alternatively, consult your horoscope and engage in a voice or text discussion with the app for further details.
Therefore UNIQLO tries to bring technology to help customers by adding new features within the application with the introduction of AI technology to measure the size so that it can check whether the dress or clothing they consume is suitable for the size or not. This new store concept is the next step in a strategy centered around high-end denim that began with the opening of the Denim Innovation Center, by Fast Retailing. With the Takumi team, UNIQLO entered China in the 1980s to create its own outsourcing value chain and managed to directly control the supply of cashmere from Inner Mongolia.
With the production department and Takumi team, UNIQLO has promoted its core competence to compete with Zara and H&M in the global market.
Porter’s Five Forces
- Competitive Rivalry
- The bargaining power of buyers Bargaining Power of Buyers
- The bargaining power of suppliers
- The threat of Substitution products
- The threat of new entrants The economics of scale
- Conclusion of Porter’s 5 forces analysis Global Apparel Market
The number of UNIQLO suppliers in 2021 is 417 factories, including fabric mills, sewing factories and subcontractors in the following countries:. Compared to customers, the number of suppliers in the industries in which UNIQLO participates is enormous. The availability of substitutes in the industry limits setting the product's price too high.
The threat of substitution in the garment industry is increasing due to the large number of products from today's garment industry, and it is a huge market for buyers. In addition, technological changes and innovations in the clothing market have led to a large number of replacements. Nevertheless, this does not mean that the market entry threat is high and risky for UNIQLO, as UNIQLO has the advantage of economies of scale.
Large and experienced companies like UNIQLO also find it easier to deal with any unexpected problems in their internal or external aspects, such as if a supplier goes bankrupt in the middle of a contract, etc.
Strategic groups
Group of competitors
Price - Price is an important factor when considering a brand group because fashion buyers are individual shoppers and home buyers. Product line breadth - Product line breadth is a variable chosen to be considered with product pricing in this analysis because brands with comparable prices and a similar number of products tend to be the main competitors in the market.
Price Versus Product Line
Ready-to-wear is more fashionable than luxurious, more updated than timeless. In this category, critical elements of success include a brand's ability to produce items that are consistent with the brand's attractive image and the ability to increase production volume. Some of them in this category do not qualify as fashion as the things they sell are more 'functional' than 'fashion' and don't follow the rules.
This category includes one-of-a-kind pieces that are made to order, handcrafted with valuable materials, and then sold or unveiled only to exclusive markets (e.g., Chanel). There are few brands in this category. Maintaining this privileged position required a very unique marketing strategy. In this category, the series are limited editions of the highest quality and most stylistic, with legendary branding and a clear brand identity, distributed exclusively (eg Salvatore Ferragamo).
Also called diffusion line for the fashion apparel segments, the role of this category is solely to communicate and deliver the goods.
Conclusion of Strategic groups
This unique marketing strategy has been put together by fashion companies that are able to exchange the luxury allure (Chanel) with the H&M Cool Factor.
Resources and capabilities analysis
- Identify principal resources and capabilities
- Financial capital
- Land & Infrastructure
- Equipment
- Materials
- Suppliers
- Facilities
- Patents/Copyrights
- Technology/Software
- R&D (Designers/Pattern Makers)
- Marketing Communication & Campaign
- Intellectual property right
- Brand reputation
- Trade names
- Customer experience
- Quality product
- Supplier relationships
- Employee involvement
- VRIS Analysis
For UNIQLO, the land consists of all land owned and leased for the company's production units, warehouses and packaging. Interior design and the interior of UNIQLO's buildings are also part of its facilities designed to maintain the brand's image and optimize performance. A combination of hardware and software is regularly incorporated by UNIQLO to improve the company's operational processes, which is developed in-house and therefore patented.
Since most of UNIQLO's campaigns are launched for local or regional markets, not global, it may hinder the brand's global growth, moreover, UNIQLO could focus on more global advertising, marketing campaign, etc. Competitors cannot copy the company's brand reputation based on corporate culture and unique customer relationships, which may become a competitive advantage. This is because the quality and accurate projections are only available to the company's top executives.
This is made possible by the company's highly effective distribution infrastructure, which enables it to sell its products worldwide. UNIQLO's financial resources are valuable because they enable the company to invest in outside opportunities. UNIQLO's financial resources appear to be scarce compared to those of companies in the same sector.
Value chain Analysis
- Inbound logistics
- Operations
- Outbound logistics
- Marketing & sales
- After-Sales Service
- Support activities 1. Firm Infrastructure
- Human Resources Management
- Technology Development
- Procurement
- Strategy (Differentiation/Low cost) Low cost strategy
In addition, the company's TV commercials express a clear differentiation and convey the company's philosophy that the focus of the brand concept is on people wearing personal clothing, not on the clothing itself. The company has always worked closely with creators around the world, and for this purpose, it has also developed new technologies such as "Uniclock" to help the company connect more creators and potential customers. UNIQLO Supply shall provide after-sales service and maintenance for the successful use of the product. UNIQLO places stores and managers at the core of its organization, providing accurate data to help the company make decisions, the headquarters as a store support center that provides maximum service and sales assistance to the branches.
UNIQLO manages its global operations using the world's most effective management metric, known as "global one." Several operations are included in the metric, such as global merchandising (unifying product lines around the world without distinction in any country) and global marketing (promoting items in a globally coordinated manner) (such as HEAT-TECH). UNIQLO has experienced store managers such as Supervisor, Block Leader, Super-Store-Manager, Super-Star-Store-Manager and Franchise Owner positions. Effective HR management reduces competitive pressure through staff motivation, commitment and skills.
It is not, as some of its competitors claim, a company selling imitations of the latest runway looks.
BCG Analysis
- Star Product Line
- Question Mark
- Cow - Innovation Product
- Dog - Synthetic Fabric Product
UNIQLO is in the second position of Global Athleisure product market share development, while NIKE is in 12th place and ADIDAS is in 14th place. UNIQLO is famous for its technique and high quality and is also the market leader in the category of innovation. Heat-Tech is UNIQLO's world-renowned technology which is applied to the brand's various product lines.
UNIQLO Socks ranks first among global brands in terms of socks market share. UNIQLO's line of socks is among the mature products of the brand's growth, which gives the company high revenues. Basic is always one of UNIQLO's strategies and strengths, as it is never outdated and can be worn for everyday style.
UNIQLO never underestimates basic clothing and has put a lot of effort into developing the quality of the material over time and ensuring that the consumer wears the best comfortable clothing.
The synergy among SBUs
- Operating synergy
- Human resources synergy
- Marketing synergy
- commerce
Training must be coordinated with HR systems in order to build global leaders capable of delivering in a complex business environment. Professional growth should be based on universal training for all employees to empower them by responding to their particular inclinations and professional ambitions. Furthermore, UNIQLO sees e-commerce as a new marketing channel to make marketing synergies with its in-store sales.
In order to ensure that the customer's in-store experience is consistent every time, employees will receive relevant training to learn how to interact with shoppers, use both hands to return credit cards to customers' eyes and movements, and all greeting customers entering the store. store for consumption. UNIQLO sees e-commerce not only as a new format for doing business, but also as a marketing channel to promote in-store sales. UNIQLO noticed that the more we expand our e-commerce services, the more often customers tend to purchase items from our physical stores.
Buyers these days tend to choose the products they think sound the most appealing based on the information they have found online.
Porter's National Diamond Framework
- Factor conditions Raw material
- Related and supporting industries
- Demand conditions
- Firm strategy, structure, rivalry UNIQLO firm’s strategy
- Government Exchange rate
- Suggestion for UNIQLO
- Focused on their unique techniques
- Decrease poorly sales product
In the domestic market, supporting industries have driven the development of the entire industry, which allows companies like UNIQLO to continuously advance and develop business, attract consumers, and create brand awareness and recognition in the consumer market. Demand conditions are the events and conditions that lead to UNIQLO's success in the domestic market, and internal demand is essential not only for UNIQLO to face major market challenges, but also important for the strategic expansion plan in the future. All of the above are colors that work comfortably and are not colorful, which is considered another specialty of the Japanese.
UNIQLO has a creative and trustworthy organizational culture that helps the company grow and progress. In this way, intense competition with domestic players has enabled UNIQLO to introduce fresh and new processes and technologies to develop unique competitive and cost advantages for UNIQLO that help it attract a larger number of consumers. As UNIQLO said, "We are not a clothing company, we are a technology company in the fast fashion market." In recent years, more and more people are striving for functional clothing, which means that there will be a huge market for UNIQLO's technical products in the future.
It is too difficult for UNIQLO to enter this market, so it can use its own customer database to analyze the product that is selling poorly and cancel it or sell it at a discount.
