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Strategic analysis of Uniqlo

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 Retailing Management
Name Abdurakhmonov Akbar Student ID 12204852
Week 7 (12-Oct) Topic of Lecture Managing the supply chain
Title of Case: A Dynamic Process of Building Global Supply Chain Competence by New Ventures: The
Case of Uniqlo

Answer)
Fast-fashion retailers (H&M, Zara, L Brands, and Forever 21), long-lasting fashion retailers (GAP,
PVH, and American Eagle Outfitters)

Q1) Basis of answer)

Who are the main Industry giants H&M and Zara with their great emphasize on pursuing clothing fashion trends1), GAP
competitors in the with its unique offerings on long-lasting trends and some niche retailers (ex: L Brands) with their
market? differentiated focus on clothing style fads, pose a great challenge for Uniqlo to remain competitive in
the market. Before, in the apparel industry, retailers had actively competed in terms of “race to the
bottom” strategy in order to achieve competitive advantage. However, in the current wave the giants –
Uniqlo, H&M, and Zara have been thriving to be global leaders by rejecting conventional “race to the
bottom” (low prices) strategy in order to build long-term sustainable competitive advantage1).
The apparel retailing industry is highly concentrated at the top with 20 top fashion retailers acquiring
over 70 percent of the value created in the industry2). Niche brands have also been appearing casually
by focusing on style fads but they are posing temporary challenges for industry giants, being sold off as
soon as they start making profit3).
In this industry, just like in tech industry, a “planned obsolescence” strategy is the main current trend
which significantly affects the formation of competition in the industry. Retailers are actively competing
to encourage customers to update their wardrobes by uniquely exploiting the changes in the culture and
lifestyles of customers4).
In addition, currently new trend emerging in the industry, in which technology and fashion are colliding
and collaborating in surprising ways. With ever increasing aptitude of Artificial Intelligence, retailers
will soon be able to detect new on-demand fashion trends in the industry effectively and efficiently5).
This trend can significantly change how competition is formed since the capability to detect the new
fashion trends has utmost necessity in this industry. With this trend, retailers will be competing to
develop their AI and machine-learning capability together with their supply chain systems.
Answer)
Non-disposable long-lasting clothes, innovative and high-functioning materials, high quality and
affordable clothes and effective supply chain.

Q2) Basis of answer)

What are the key Uniqlo has adopted an approach from the modern auto industry. The company carefully identifies long-
differentiation lasting fashion styles that wouldn’t go out of fashion quickly and adjusts its entire supply chain to deliver
points? them to the customer just in time6). Uniqlo stands out from its competitors because the focus is not
oriented on the number of styles in outlets and relevance to latest fashion trends, but rather on the quality.
While its main competitors (H&M and Zara) have created business that is focused on following fashion
trends and fads, Uniqlo has differentiated itself by focusing on sustainability of its fashion styles. Uniqlo
has been developing its business without losing its soul – to provide simple, high-quality and everyday
clothing so that customers can feel a practical sense of beauty and clothing connoisseurship7). Uniqlo
has been able to maintain affordable prices by exercising its economic reward power thanks to long-
term partnering flexibility with its selected suppliers. Uniqlo has made procurement process less costly
due to its high flexibility for selecting and switching to suppliers interchangeable according to
uncertainties and changes in the customer behavior. In order to maintain high-quality standards, Uniqlo
has organized professional team called Takumi which provide its suppliers on-site technical support by
visiting them frequently8).
Answer)
Individuals who look for affordable and high-quality clothing that can improve their lifestyles. People
with subtle clothing values and principles. People who love a fine selection of minimalistic clothing9).
Q3) They have special tastes at choosing their closing styles.

Who is the target customer

and what are their Basis of answer)
characteristics? Uniqlo’s slogan is “Made for all”. Uniqlo targets for people that come from all demographic
backgrounds, income levels and age ranges10). They are quality and cost sensitive at the same time. They
want to go beyond fashion trends by pursuing clothing connoisseurship to improve their lifestyle. They
are not attracted by the number of designs of retailers but by the relevance of styles to their lifestyles.
They are attuned to non-disposable clothes.
Uniqlo targets for customers at the “self-esteem” level of Maslow’s hierarchy of needs11). They want to
acquire unique individual value by appreciation to clothing and fashion.
 References used

1) Greg Petro (May 24, 2016). Uniqlo, H&M, and Zara: Retailer’s Favored Long-Distance Runners. Retrieved from
https://www.forbes.com/sites/gregpetro/2019/12/24/uniqlo-hm-and-zara-retails-favored-long-distance-
runners/#14f2ff067dad

2) McKinsey (2019). The State of Fashion 2019. Retrieved from

https://www.mckinsey.com/~/media/McKinsey/Industries/Retail/Our%20Insights/The%20influence%20of%20w
oke%20consumers%20on%20fashion/The-State-of-Fashion-2019.ashx

3) Ann Binlot (September 24, 2019). Uniqlo dismisses the idea that it’s Fast Fashion through the concept of
LifeWear. Retrieved from https://www.forbes.com/sites/abinlot/2019/09/24/uniqlo-dismisses-the-idea-that-its-
fast-fashion-through-the-concept-of-lifewear/#3ff91bab4464

4) Greg Petro (May 24, 2016). Uniqlo, H&M, and Zara: Retailer’s Favored Long-Distance Runners. Retrieved from
https://www.forbes.com/sites/gregpetro/2019/12/24/uniqlo-hm-and-zara-retails-favored-long-distance-
runners/#14f2ff067dad

5) Vikram Singh Bisen (January 18, 2020). How AI is changing Fashion: Impact on the Industry with Use Cases.
Retrieved from https://medium.com/vsinghbisen/how-ai-is-changing-fashion-impact-on-the-industry-with-use-
cases-76f20fc5d93f

6) Greg Petro (May 24, 2016). Uniqlo, H&M, and Zara: Retailer’s Favored Long-Distance Runners. Retrieved from
https://www.forbes.com/sites/gregpetro/2019/12/24/uniqlo-hm-and-zara-retails-favored-long-distance-
runners/#14f2ff067dad

7) Ann Binlot (September 24, 2019). Uniqlo dismisses the idea that it’s Fast Fashion through the concept of
LifeWear. Retrieved from https://www.forbes.com/sites/abinlot/2019/09/24/uniqlo-dismisses-the-idea-that-its-
fast-fashion-through-the-concept-of-lifewear/#3ff91bab4464

8) The course case study: Usui, Tetsuya & Kotabe, Masaaki & Murray, Janet. (2017). A Dynamic Process of
Building Global Supply Chain Competence by New Ventures: The Case of Uniqlo. Journal of International
Marketing.

9) Brand Focus (October 22, 2019). Uniqlo Strategy – The differences with competitors H&M and Zara, Retrieved
from https://retviews.com/blog/focus/uniqlo-competitors/

10) Robyn Turk (November 01, 2019). 5 Reasons behind Uniqlo’s success. Retrieved from
https://fashionunited.uk/news/fashion/5-reasons-behind-uniqlo-s-success/2018110139764

11) Hitesh Bhasin (May 29, 2019). Marketing Strategy of Uniqlo. Retrieved from
https://www.marketing91.com/marketing-strategy-of-uniqlo/

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