Strategic Analysis of Uniqlo: A Business Development Report

This report offers a comprehensive strategic analysis of Uniqlo, a global fast-fashion retailer. It begins with a Porter's Five Forces analysis of the fashion retail industry, assessing its attractiveness and potential evolution. The report then evaluates Uniqlo's resources and capabilities using the VRIO framework to identify sustainable competitive advantages, followed by an examination of the company's strategic capabilities and their impact on business performance. Furthermore, the report critically analyzes Uniqlo's implementation of Porter's generic strategies and explores its growth strategies through the lens of Ansoff's matrix, assessing their impact and suggesting future strategic options. The analysis includes a radar plot to visualize the strength of the five forces, and the report provides a detailed overview of Uniqlo's business model, competitive positioning, and growth prospects in the global market. The report also incorporates the analysis of how Uniqlo has adapted to the dynamic changes in the fast fashion industry, the impact of its company culture, and its ability to maintain a strong market share through innovation and customer-centric strategies.

Running head: STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
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1STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
Table of Contents
Introduction......................................................................................................................................2
Porter’s five forces analysis of fast fashion retail industry..............................................................2
Radar plot technique based on Porter’s five forces analysis.......................................................4
Resources and capabilities analysis of Uniqlo – VRIO analysis.....................................................4
Strategic capabilities of Uniqlo and its impact on business performance.......................................6
Critical analysis of the Porter’s Generic strategy implemented by Uniqlo.....................................7
Critically examine the growth strategies adopted by Uniqlo using Ansoff’s strategies for growth
and its impact...................................................................................................................................8
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

2STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
Introduction
Uniqlo is a fast fashion based retail chain that was established in the year 1972 by
Tadashi Yanai who had inherited the chain of 22 men’s tailoring stores from his father. The new
store that had been developed by Tadashi had led to the proper expansion of the processes of
Uniqlo in the fast fashion based retail industry. Tadashi Yanai had been able to enhance the
quality of products offered to the consumers and has also improved the product portfolio in an
effective manner. The rapid expansion of its operations have been able to provide a key position
to Uniqlo in the fast fashion based retail industry (Uniqlo.com, 2020). Uniqlo has developed
more than 800 stores in Japan and the company has provided net sales of 872.9 Billion in the
year 2019. The report will be mainly based on the study of the industry in which Uniqlo has its
operations and the competition that is faced from other firms as well. The internal environment
of Uniqlo will be analyzed with the application of VRIN framework. Porter’s generic strategy
applied by Uniqlo will also be discussed in the report in detail. The growth strategies used by
Uniqlo and the future growth aspects of the organization will be analyzed as well.
Porter’s five forces analysis of fast fashion retail industry
Threats of new entry – The new entrants in fashion retail industry of Japan have started
their operations with the help of their diverse product portfolio. The apparel industry is
considered to be buyer driven in nature and the low barriers that are faced by firms are related to
the intense levels of competition. However, the development of consumer loyalty and brand
awareness in the fashion industry prove to be quite expensive for the new firms. The brand value
gained by Uniqlo is considered to be a major asset or resource of the organization which has
reduced the threats from new firms (Abratt and Bendixen 2018).

3STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
Threats of rivalry – The rivalry faced by Uniqlo is considered to be quite different in case
of the host countries and its home country. The size and operations of competitors of Uniqlo are
different and this has played a key part in enhancing the levels of competition. The
responsiveness of the organization towards competition in the industry is considered to be a key
aspect that is related to the quality of the products offered by Uniqlo. The products offered by
Uniqlo are considered to be a major source of its competitive benefit that is gained in the retail
industry. Uniqlo has also been able to develop the ability of adapting to the new trends that are a
part of the industry (Aguinis, Edwards and Bradley 2017).
Threats of the substitutes – The different types of products that are offered by Uniqlo to
the consumers mainly include casual wear, active wear, semi-casual clothes, business casuals
and many more. The organization is able to offer the products to different types of consumers
within a single umbrella. The development of substitutes for the products offered by Uniqlo are
considered to be quite tough for the rivals. This is able to reduce the influence of substitutes on
the processes and levels of profitability that have been gained by Uniqlo in fast fashion industry
(Angulo-Ruiz et al. 2018).
Threats of the suppliers – The availability and prices of the fabrics that are used
commonly for development of the products of Uniqlo are considered to be important for the
prices that are set by the organization. The costs of raw materials are able to influence the
processes and product portfolio of Uniqlo as well. The production based costs of Uniqlo are
thereby influenced by the suppliers of the organization. However, Uniqlo has been able to gain
full control of its supply chain and production process over the last few years of its operations in
the industry. This has been able to reduce the threats that are provided to the organization by
these suppliers (Bakri 2019).

4STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
Threats of the buyers – The apparel industry is able to reach a diverse group of customers
with the help of products that are provided by the organizations The price and quality of products
are able to play a key part in appropriate enhancement of consumer base of the firms in fashion
retail based industry. The preferences of buyers in fashion retail industry have been mainly based
on the quality products that are offered at low prices. The minimalist strategy has been
implemented by Uniqlo in order to sell its products to the consumers with the help of specialty
store based marketing (Blakeman 2018).
The retail industry of Japan is considered to be attractive for proper maintenance of
profitability levels of Uniqlo and attracting consumers as well.
Radar plot technique based on Porter’s five forces analysis
1/1/2015 1/1/2016
1/1/2017
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1/1/2019
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Revenue growth (Billion Dollars) Net worth (Million US Dollars)

5STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
Resources and capabilities analysis of Uniqlo – VRIO analysis
VRIO analysis can be implemented for the purpose of analyzing the internal resources
that have been gained by Uniqlo in the fashion retail industry in order to maintain its processes in
the industry.
Valuable – The financial resources gained by Uniqlo are considered to be highly valuable
for the purpose of maintaining a competitive benefit in the industry. The local fashion products
that are offered by Uniqlo are considered to be valuable for the organization to enhance the
position that it has gained in the industry. The loyal employees in Uniqlo have been able to
provide key value to the organization and their retention will be able to play a crucial part in
maintaining value of the brand. Research and development activities that are performed by
Uniqlo are able to play a vital role in enhancing the value of the firm (Daspit et al. 2017).
Rare – The patents and financial strength of Uniqlo are considered to be rare resources
that have been gained by the organization. Uniqlo has also been able to maintain a highly
efficient supply chain that has provided the organization with a different place in the fashion
retail industry. The supply chain and distribution network can be considered as a rare resource
that has been gained by Uniqlo in the industry.
Imitable – The other companies that are a part of the fashion retail industry are not able to
imitate the patents that have been gained by Uniqlo for the purpose of maintaining its operations.
The imitation of the distribution process and network of the organization is also considered to be
quite difficult for the organizations that are a part of the fast fashion based industry (David and
David 2016).

6STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
Organized – The patents that are gained by Uniqlo are not well organized in nature and
the company is not able to use them to up to the full potential. The unused competitive
advantages gained by the firm are able to play a key part in increasing competitive that is faced
from the other firms (Durand, Grant and Madsen 2017).
Strategic capabilities of Uniqlo and its impact on business performance
The success gained by Uniqlo is mainly based on the strategies implemented by the
organization that have contributed to its growth. The six major elements of the strategy of Uniqlo
that has supported its operations and growth in the industry are as follows,
1. Uniqlo has developed a clear vision of the brand – The organization aimed at providing
high quality and performance enhancing casual wear at low prices. The in-house designs
and fabric innovations have been able to offer unique and exceptional functional
performance to the consumers (Grzegorczyk 2017).
2. Uniqlo has promoted the innovations – The sustained performance and quality based
positioning has been provided with the help of innovations implemented by Uniqlo. The
company has been able to form a different brand value with the support that is offered by
the innovative products.
3. The operational strategy is able to provide most agility and cost advantage – The low cost
based operations of Uniqlo is able to provide an ownership of the processes of product
planning, designing, manufacturing and distribution based advantages as well. The stock
of the organization is upgraded on a weekly or daily basis in order consider the demands
and needs of consumers (Hanson et al. 2016).
4. Driving force of success of Uniqlo is the charismatic founder or owner – The owner of
Uniqlo, Tadashi Yanai is a leader who aims at support the unique culture which cannot be

7STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
duplicated easily. The goals and values of Uniqlo are also influenced by the owner that
helps in translating the efforts into measures, processes, people and organizational
structure as well. The organizational structure of Uniqlo is considered to be flat in nature
and the employees are encouraged to provide their suggestions. A rare decision had been
made by the owner of the firm of conducting the business operations in English in a
country like Japan (Hitt, Ireland and Hoskisson 2016).
5. The emphasis of operations is mainly on in-store based experiences that is over-the-top in
nature – The hiring, training and the micro-managing of various touch points have been
able to influence the experiences that are offered to the customers. The activities that are
performed by the employees have the ability to influence the service levels offered to
consumers. The employees are mainly made to practice the methods by which they can
interact with the consumers (Keller 2017).
6. The organization always thinks big – Yanai has aimed at moving beyond primary mission
that has been developed by Uniqlo to enrich the lives of people and different types of
individuals all over the world. The company had aimed at exceeding its major
competition Zara with respect to the revenues that have been earned in the fast fashion
based retail industry. The ambition of Uniqlo grew with the support provided by the
theme “Changing Clothes. Changing conventional wisdom. Change the world.” The
corporate social responsibility based activities of the firm have been considered to be
important and this has been able to provide major contribution to the society at large
(Kingsnorth 2019).

8STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
Critical analysis of the Porter’s Generic strategy implemented by Uniqlo
Uniqlo is a major multinational organization that has been able to develop high
recognition in the various target market segments. The intense levels of competition in fast
fashion retail industry has provided major levels of challenges to Uniqlo in order to maintain a
leadership position. The critical advantage can be maintained by Uniqlo with the support that is
provided by an effective combination of the three types of Porter’s generic strategy. The generic
strategy has been able to support the growth of Uniqlo in the fashion retail industry and it has
also been able to become a global brand (Kowalkowski, Gebauer and Oliva 2017).
The cost leadership strategy has been implemented by Uniqlo in order to offer the
products at low prices that further helps in enhancing the shares in the fashion retail market. The
generic strategy of differentiation is used by Uniqlo in order to build the competitive benefit and
achieving the growth based objectives as well. The focus strategy on the other hand is applied by
Uniqlo in order to concentrate the resources on proper expansion of the narrow target based
segments (Martinroll.com, 2020). The combination of three generic strategies has been
implemented in order to enhance the competitive position of Uniqlo in the highly competitive
fast fashion retail industry. The organization has been able to enhance the levels of growth with
the support that is provided by the proper combination of various generic strategies. The
implementation of Porter’s generic strategy in the operations of Uniqlo has led to huge success
of the organization. The owner or founder of the organization is able to support the growth of
Uniqlo in the industry (Mathews et al. 2016).

9STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
Critically examine the growth strategies adopted by Uniqlo using Ansoff’s
strategies for growth and its impact
The Ansoff matrix can be implemented in order to examining the growth strategies of
Uniqlo in the fast fashion retail industry. The four types of strategies that are an important part of
the Ansoff matrix analysis include product development strategy, market development strategy,
diversification strategy and market penetration strategy (Imrg.org, 2020). The intensive growth
based strategy that has been implemented by Uniqlo has been helpful for development of the
new markets or products in order to accomplish the corporate growth related objectives
(McDONALD 2016). A multinational organization like Uniqlo has considered the strategies in
order to understand the ways by which it can penetrate the existing markets or create new
markets as well. The combination of the three Porter’s generic strategies can lead to the
implementation of intensive growth strategies for operations of Uniqlo in the future (NEAMŢU
and NEAMŢU 2016).
Market penetration strategy (primary strategy) – Market penetration has been
implemented by Uniqlo in order to offer the products to consumers at low prices in comparison
to the competitors in the industry. The deals and discounts that are provided by Uniqlo are also
considered to be a vital part of the market penetration based activities that are performed by the
firm (Imrg.org, 2020). The strategic objective that is mainly related to market penetration is
based on development of leadership position in the industry based on low costs. The ability that
Uniqlo has to differentiate itself from the other organizations based on low prices is related to the
implementation of market penetration strategy (Newburry, Deephouse and Gardberg 2019).
Product development strategy (secondary strategy) – The product development is
considered to be the secondary intensive growth strategy that is implemented by Uniqlo in order

10STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
to achieve the growth objectives. Uniqlo is a major growth seeking organization and the
implementation of this strategy is based on the enhancement of growth in the industry. The new
products are mainly introduced by the company for the purpose of enhancing the consumer base
and its position in fast fashion retail industry as well (Sheth, Sinha and Shah 2016). The research
and development strategy of Uniqlo is able to support the development of new products by the
organization. Innovative strategies can play a major role in proper implementation of the new
product development based strategy by Uniqlo. The reinvention and replenishment various
products is considered to be an vital part of the new product development based strategy of
Uniqlo (Olson et al. 2018).
Market development (supporting strategy) – Market development strategy is also an
important part of the Ansoff growth matrix. The strategy is able to support the development of
new market areas in various countries. The success of the entry of Uniqlo in various markets has
led to the development of a global brand and worldwide presence of the organization as well.
The investments also have to be made by the organization in research and development for the
purpose of effective market development in various countries (Mathews et al. 2016).
The Ansoff growth matrix has been implemented in order to understand the various
intensive growth strategies that have led to the success and growth of Uniqlo in the fast fashion
based retail industry. The culture and visionary leadership of Uniqlo has been able to play a key
part in proper formation of its position in retail industry and its success on a global basis as well
(Imrg.org, 2020). The flat organizational structure of Uniqlo has been able to encourage the
employees to provide their suggestions and contributions towards the development of the firm
(Hitt, Ireland and Hoskisson 2016).

11STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
Conclusion
The report can be settled by stating that Uniqlo has been highly successful in maintaining
its operations in the highly competitive fast fashion retail industry. The external environment and
industry based forces have been able to impact the approaches that are applied by Uniqlo in order
to maintain its growth. The generic strategies and intensive growth based strategies of Uniqlo has
been able to support the growth of the organization in the industry. The organization can face the
competition with support that is provided by the effective strategies.
Recommendations
The future strategies can be suggested to Uniqlo so that the firm is able to further enhance
its place in the competitive retail industry. The strategies for future growth of Uniqlo are as
follows,
 Uniqlo needs to further enhance the quality of products rather focusing only on
the prices for the purpose of attracting different types of consumers.
 Uniqlo needs to increase the e-commerce or digital operations for the purpose of
reaching the consumers in different countries. The company has already started
the online operations with the opening of its online store in the US (McDONALD
2016).

12STRATEGIC ANALYSIS OF UNIQLO CASE STUDY
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