Report on Uniqlo and H&M

Running head: REPORT ON UNIQLO AND H&M 1
Report on Uniqlo and H&M
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REPORT ON UNIQLO AND H&M 2
Abstract
The increased globalization has led to companies operating beyond countries boundaries
this has led to intensified competition in both domestic and global markets. In this context a case
analysis of two companies, Uniqlo and H&M will be analyzed looking at the market structure of
the industry they operate in and the level of competition in the Australian clothing industry. The
report also looks at the pricing strategies employed by both companies and recommends the best
pricing strategy that would be helpful for the growth and success of such companies. The last
part looks at the growth strategy that both companies use in their daily operations.

REPORT ON UNIQLO AND H&M 3
1.0 Introduction
Uniqlo is a Japanese based casual clothing designer and manufacturer and became a fully
owned subsidiary of Fast Retailing and has extended its operations in several countries such as
Australia. The company has its origin as a Yamaguchi-based enterprise that was established in
1949 and only stocked men’s clothing in its shops. However, in 1984, the company started
retailing casual wear that was unisex in Fukuro-machi. However, as of 2005, Uniqlo expanded in
overseas territories in countries such as Australia and the United States of America with total
sales scaling all the way up to the tune of $4 billion in 2006 and became number five among the
top international retailers joining the list of other reputable companies such as H&M.
The Hennes & Mauritz AB commonly known as H&M is a multinational company in the
clothing retail industry that has roots from Sweden. The company was established by Erling
Persson in 1947 when it operated its first store in Vasteras. One particular shop referred to as
Hennes was responsible for retailing exclusive women clothing. The company went further in
acquiring Mauritz Widforss which led to the incorporation of menswear fashion in its product
portfolio is popular for its fast-fashion apparel among women, teenagers, and men among other
niches. H&M operates in more than 60 countries and has more than 4500 stores and employed
more than 130,000 employees in 2015 (Duncan, 2017). The company has been ranked as the
second largest global retailer in clothing. H&M has a substantial online presence with more than
30 countries having access to online shopping. The report analyzes the market rival of Uniqlo
and H&M in the Australian market.
The first part of the report looks at the market structure of the clothing industry in which
both Uniqlo and H&M operate. Issues such as barriers to entry such costs associated with land
use and land prices in Australia are analyzed as one of the entry barriers. A detailed analysis of

REPORT ON UNIQLO AND H&M 4
the market share by both companies is also looked in this part of the report. The second item
analyzes the growth strategies employed by both companies where there were similarities in
growth strategies by both companies as both aimed at increasing the number of stores as part of
their growth strategy. Also, the use of online platforms as part of the growth strategy is looked at
particularly in the case of Uniqlo. The last component in the first part is the pricing strategies
used by both companies. H&M employs the cost-cutting pricing strategy enabling it to offer
lower prices compared to those offered by its competitors. Uniqlo, on the other hand, uses non-
pricing strategies such as media campaigns and promotions to lure and increase their sales target.
The second part deals with the conclusion that highlights the summaries of other parts together
with discoveries and recommendations that could help improve the market under which both
companies operate.
The report uses secondary sources as sources of information. There has been the use of
data from individual company websites entailing markets share, profitability and sales margins to
support the information provided in the report. The report has adopted the descriptive design
where other sources of information have given detailed information regarding Uniqlo and H&M.
2.0 Pricing and non-pricing strategies
Hennes & Mauritz commonly known as H&M is a Swedish based fashion retailer and
adopts a pricing strategy that is based on the needs of customers and in this case uses low prices
and quality fashion (Pandey, 2017). The main question is how the company manages to strike a
balance between quality products and low price. H&M attains this through outsourcing
production to nations where labor is cheap and readily available. The outsourcing is organized in
different countries depending on the products and their lifecycle. For instance, for high fashion
products that target the European market are manufactured in Turkey since the life cycle of such