Operational Issues and Strategies for Uniqlo in North America

This report examines the operational challenges faced by Uniqlo in the North American market. The primary issue identified is intense competition from international fashion brands, online retailers, and local businesses. The report analyzes the dynamics of the US apparel market, highlighting the impact of changing fashion trends, weak retail conditions, and consumer behavior on Uniqlo's performance. The study delves into the company's struggles with brand recognition and market share, particularly its expansion into suburban shopping malls. To address these challenges, the report recommends strategies such as brand positioning to improve customer perception, differentiation to create unique products, and niche marketing to target specific consumer segments. The report concludes that Uniqlo needs to focus on these strategic approaches to enhance its competitive advantage and improve its market presence in North America.

International Business 1
International Business Management

International Business Management 2
Executive Summary:
The main aim of this assignment is to discuss the operational issues faced by Uniqlo in the
international market of North America. Presently, high and fierce competition is the biggest
operational issue faced by this Japanese organization in the market of USA. This organization
mainly competes with the other international fashion brands and also with the local shopkeepers.
Different strategies are recommended for Uniqlo in terms of dealing with the issue and ensure
their strong position in the market.

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Contents
Executive Summary:....................................................................................................................................2
Introduction:...............................................................................................................................................4
Discussion:...................................................................................................................................................4
Operational Issue:....................................................................................................................................4
Strategies & Recommendations:.............................................................................................................6
Conclusion:..................................................................................................................................................6
References:..................................................................................................................................................7

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Introduction:
Global competition is defined as service and products offered by the competitors of the business
organization which serves in the international market. While operating its business in
international market, organization face number of operational issues and it is necessary for the
organization to pay attention to these issues. Because of the easy accessibility of guidance and
resources, there is high competition in international market also, and it becomes necessary for the
management to monitor the competition on continuous basis and take relevant actions in this
context (Wolf, 2017).
The main aim of this assignment is to discuss the operational issue faced by Uniqlo while
expanding its business in North America and how this issue affects the performance of the
organization. Further, this assignment discusses the strategies and procedures required by
organization to deal with this issue.
Uniqlo Co. Ltd. is the Japanese organization of casual wear designer, manufacturer, and retailer.
Currently, this organization is wholly owned subsidiary of Fast Retailing Co. Ltd. and present
this organization conducts its business operations in Japan and other parts of the world (Uniqlo,
2018). Structure of this assignment includes the section of discussion which covers both the
above stated points, and this is followed by brief conclusion in terms of concluding this report.
Discussion:
Operational Issue:
Market of US apparel is considered as largest apparel market across the globe, and in 2016 store
based retailing of this market was almost 292 billion US dollars (Statista, 2017). The dynamics
of the apparel industry in North America are changing dramatically, and in terms of succeeding,
it becomes necessary for the organizations to frame the required strategies. At the initial level,
there is the culture of changing fashion trends. It becomes important for the organizations to
adopt these changes on continuous basis.
Weak conditions of retail sector and high cost make it difficult for the organizations to survive in
the apparel retail market of North America in recent years. These situations impose pressure on
number of famous brands to reframe their strategies in terms of dealing with the high
competition. There are number of competitors in apparel retail sector of North America and these
competitors mainly includes the international brands of fashion, online retailers, and also the
local shops. All these things completely changed the way through which customers spend on the
retail purchases. In terms of clearing the excess stock and attracting the demand of customers,
retailers have given the heavy discounts and other offers to the customers and because of this
consumer have become accustomed to buying the items on sale. At the similar time, weak
consumer sentiments encouraged the bargain hunting and because of this price become the most
important variable of competitions.

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Online retailers become well positioned in terms of getting the advantages of these trends, and
this happen because online stores low overheads in comparison of the retailers operating the
stores in market. This is the reason because of which online retailers offer more competitive
prices to the customers in international markets.
Easy and accessed technology normalized the online transactions, and it becomes easy for the
customers to reach the online retailers and purchase. This facility is accompanied with the tablets
and smartphones which help the online retailers to grab the large portion of market in
comparison of traditional retailers. Traditional retailers and store holders struggled to compete in
the US market for consumers, and this happen because consumers quickly compare the price of
online goods.
The head of Uniqlo stated in the year 2016 that organization is trying to restore their position in
the U.S. market, and the operations of the U.S, market was on their top priority. In other words,
organization is struggling to revamp their casual clothing brand in the market of U.S. Market of
North America is important for this organization and because of the high competition, it becomes
difficult for the organization to retain their market share (Reuters, 2016).
This brand is recognized in New York, but not in other areas of North America. In terms of
dealing with this issue and enhancing the brand awareness, required strategies are framed by the
organization which help the organization in competing with the fast fashion brands such as Zara,
H&M, Inditex’s, etc. However, the main target of this organization is the local shoppers in the
major metropolitan areas.
Uniqlo not always shows the profit data related to its U.S. business operations, but still this
organization lost money on constant basis after the business drive it conducted before five years.
Strategy of the organization to expand its business in the shopping malls of sub-urban areas fails
to work well for the organization. This mainly happen because this organization struggled very
hard to compete with the local shoppers with its simple and cheap items.
Another issue because of which Uniqlo failed to conquer the U.S. market non-acceptance of
Asian brands, as consumers of U.S. less preferred the Asian brands in their markets.
High competition in international market affects the organization in adverse manner, and some of
these effects on Uniqlo are defined below:
 Low share of market is the biggest side effect of high competition, as Uniqlo fails to
capture the market of USA because of the high competition.
 Poor sales performance is another adverse effect of the high competition on the
operations of Uniqlo in the US market. It restricts the growth opportunities of the
organization in near future and also endangered the survival in the market of US (Li,
2017).

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 Lack of brand recognition restricts the organization to expand its business in the other
markets of USA, and this further restricts the future expansion opportunities for the
organization.
Strategies & Recommendations:
As stated above, high competition is the biggest threat which is currently faced by the Uniqlo
while expensing its business operations in the North America. Local shoppers, online retailers,
and international fashion brands are the most important aspects of competition which required
the focus of Uniqlo experts in terms of ensuring their success in the apparel retail industry of
USA. It is necessary for the organizations to deal with the challenge of high competition in terms
of capturing the market of USA. Following are the important strategies which are recommended
to the Uniqlo in terms of dealing with the operational issue-
Brand positioning- Positioning mainly refers to the place where brand occupies the mind of
customers, and how their product is different from the product of competitors. In other words,
brand positioning is the concept through which organization focus how brand occupies the mind
of target audience. Positioning is deemed as effective marketing strategy which helps the users in
gaining the market share. Uniqlo face the issue of less brand recognition in the market of North
America, and because of this it is easy for competitors to break down the market of Uniqlo
(Fuchs and Diamantopoulos, 2010).
In the environment of high competition, it is necessary for Uniqlo to acquire the strong brand
position and also the clear defined product against the online retailers and international fashion
brands. Consumers are expecting number of these things from the apparel retail industry,
because of this it is necessary for the Uniqlo to focus on the target market and identify the factors
which drive the purchase decision of consumers. This can be understood with the help of
example, Zara adopt the usage based positioning strategies in terms of capturing the market of
USA, and these strategies of Zara clearly highlights the customers centric approach of the
organization (Sengupta, 2005).
Differentiation Strategy: Unique products and services are the most important features which
can be adopted by the organization in terms of increasing their sales volume. Differentiation
products are the drivers which help the organizations in attracting the customers and capture the
large market share (Rothaermel, 2015). It becomes difficult for the competitors to replicate the
differentiation products of the organization. This strategy promotes the special features which
automatically helps the organization in brand positioning and brand awareness among the
customers. However, adoption of this strategy involves the high cost but through this strategy
organization can gain the higher profits. It further helps the organization in gaining the
competitive advantage over is competitors and capture big portion of market. This can be
understood with the example of H&M, as this organization adopts the differentiation strategy in
terms of its customer services which automatically helps the organization in attracting the
customers (Zott and Amit, 2008).

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Niche Marketing Strategy: This is another strategy which can be used by the Uniqlo in terms of
dealing with the high competition and ensures its growth in the market of North America. Niche
market is the customer oriented strategy which focuses on the accessible segments of the market
by conducted survey in the market and determine the needs of customers and their preferences.
This strategy helps the Uniqlo to deal with the competition given by local shopkeepers by
developing such feature in their products and services which match the requirements of
particular segment of Niche. The effectiveness of this strategy mainly deals with the fact how
organization identifies the needs of the customers and the manner in which products of the
organization satisfy those needs (Toften and Hammervoll, 2009)
Conclusion:
After considering the facts of this report, it can be said that high competition and lack of brand
recognition are the biggest operational issues faced by the Uniqlo while expanding its business
activities in the market of North America. Weak conditions of retail sector and high cost make it
difficult for the organizations to survive in the apparel retail market of North America in recent
years. These situations impose pressure on number of famous brands to reframe their strategies
in terms of dealing with the high competition. Uniqlo is struggling to revamp their casual
clothing brand in the market of U.S. Market of North America is important for this organization
and because of the high competition, it becomes difficult for the organization to retain their
market share.
Local shoppers, online retailers, and international fashion brands are the most important aspects
of competition which required the focus of Uniqlo experts in terms of ensuring their success in
the apparel retail industry of USA. In terms of dealing with the issue, few strategies are
recommended for the organization such as Niche marketing, differentiation strategy, and brand
positioning. It must be noted that, Positioning is deemed as most effective marketing strategy
which helps the users in gaining the market share. Uniqlo face the issue of less brand recognition
in the market of North America, and because of this it is easy for competitors to break down the
market of Uniqlo.

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References:
Fuchs, C. and Diamantopoulos, A., 2010. Evaluating the effectiveness of brand-positioning
strategies from a consumer perspective. European Journal of Marketing, 44(11/12), pp.1763-
1786.
Li, X. (2017). Why UNIQLO failed to dominate US market?. Available at:
https://medium.com/@avex1994/why-uniqlo-failed-to-dominate-us-market-e7f3d4d6ecc1.
Accessed on 06th December 2018.
Reuters, (2016). Uniqlo's Yanai says revamping U.S. operations a top priority. Available at:
https://www.reuters.com/article/us-uniqlo-ceo-idUSKCN0YG1A0. Accessed on 06th December
2018.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education,.
Sengupta, S., 2005. Brand positioning: Strategies for competitive advantage. Tata McGraw-Hill
Education.
Statista, (2017). Statistics & Facts on the U.S. Apparel Industry. Available at:
https://www.statista.com/topics/965/apparel-market-in-the-us/. Accessed on 6th December 2018.
Toften, K. and Hammervoll, T., 2009. Niche firms and marketing strategy: An exploratory study
of internationally oriented niche firms. European Journal of Marketing, 43(11/12), pp.1378-
1391.
Uniqlo, (2018). About Us. Available at: https://www.uniqlo.com/us/en/company/about-uniqlo-
us.html. Accessed on 06th December 2018.
Wolf, (2017). Uniqlo Wants to Be America’s Perfect Fit. Available at:
https://www.racked.com/2017/4/11/14962056/uniqlo-wants-to-be-americas-perfect-fit. Accessed
on 06th December 2018.
Zott, C. and Amit, R., 2008. The fit between product market strategy and business model:
implications for firm performance. Strategic management journal, 29(1), pp.1-26.