UNIQLO Supply Network Design

Running head: UNIQLO 1
UNIQLO Supply Network Design
Student
Institution

UNIQLO 2
Introduction
In a period of 20 years, UNIQLO’s growth was unstoppable and grew to become the 4th
largest retail and consumer goods Company in the world. In Japan, UNIQLO remains as the
biggest and fast-growing retailer; and a strong retail and consumer goods player in the Asian
Pacific countries like Taiwan, China, and Korea (Yen & Lentini, 2016). UNIQLO has since 1998
realized double-digit growth in sales rates; and this is the result of the company’s aggressive
pricing policy integrated with top quality products and services; a combination that has proved
difficult for the Asian based customers to ignore and resist. UNIQLO’s success can be
associated with the use of an agile supply chain strategy bolstered by the “fast-fashion”
technique used by H&H and pioneered by INDITEX, the two biggest fashion retailers globally.
Also, the success of UNIQLO resulted from its reliance on the counter-current approach and its
inability to fully rely on the fashion trends when designing, manufacturing, and marketing its
clothes (Usui, Kotabe, & Murray, 2017). This report will analyze whether the strategies used by
UNIQLO in Asia Pacific countries could fit well is adopted worldwide. Also, the report will
analyze whether the low growth rate experience by UNIQLO in the US and Europe was caused
by its current network operations. Last, the report will provide suggestions on the approaches
that UNIQLO should adopt to boost its international business growth.
UNIQLO network operations had proved effective in the Asia Pacific region, but could the same
model be scaled worldwide?
UNIQLO’s success in Asia Pacific countries such as Korea, China, and Taiwan is
attributed to many strategies. First, UNIQLO used the aggressive pricing strategy combined with
a strategy of producing and selling high quality clothes; exactly what the Asian market
demanded/ wanted. Second, UNIQLO adopted the agile supply chain model/ strategy that made
its products to take a “fast-fashion” tune in the Asia region (Satoshi, 2017). Third, the model of
UNIQLO demanded that its suppliers offer competitive prices, and it also gave the suppliers a
constant technical support in the creation, development, and perfection of their clothes
production techniques; also, UNIQLO supported the suppliers with high flow of orders. After
some years of its operations, UNIQLO begun to partner with other companies such as Toray, a
worldwide company that manufacturer’s synthetic and composite fiber, whereby it excelled in

UNIQLO 3
the selling of natural materials (Anwar, 2017). Last but not least, UNIQLO used the “Just-in-
Time” model.
With these network models and operations proving effective in the Asian Pacific region,
an analysis of UNIQLO’s market case study is important to determine whether the same model
can be effective if scaled worldwide (Avex, 2017). Based on the case study, UNIQLO’s network
operations would prove effective if scaled globally. One of the main reasons behind this position
is UNIQLO’s position as the world’s only “LIFEWEAR” brand, SPA model implementation in
other countries was based on agile supply chain strategy, that suppliers were arranged in a
network-like structure, and that the business environment in Asia countries was the same like
most of other global markets (Anwar, 2017). In this case, UNIQLO focused on providing
fashionable, high-quality, affordable/ cost-effective, and comfortable clothing products not only
to the Asian countries but also to the world market. In the use of agile supply chain in its SPA
model, UNIQLO created tight partnerships with other global players even operating in the other
sectors.
Also, UNIQLO network operations model used in the Asian Pacific region would prove
effective if scaled worldwide because UNIQLO only limited its operations to this region, and
never focused on expanding internationally. In the case, the Asian customers were becoming
bored with UNIQLO’s trendy fashion apparel while the other regions were demanding the same
products (Chow & Li, 2018). The aggressive market expansion model would greatly help
UNIQLO expand globally and exploit more markets hence more profitability. In terms of
population, UNIQLO focused on Chinese regions with over 5 million people, while other world
cities would still have more population than the company’s target in the Asian regions. In
addition, the JIT inventory system would be highly cost effective for UNIQLO if applied in other
worldwide markets because it was risk free and one of the most convenient models for UNIQLO
in Asia Pacific Countries (Reboux, 2017). The other reason is that UNIQLO could launch private
labels in these other markets and still thrive with trading partners.
Was the low growth rate UNIQLO experienced in the US, and particularly Europe, also due to
the limitations of its current network operations?