UNIQLOs Current CSR Policy and Current Campaigns - Report Example

Marketing Table of Contents Introduction 3 Discussion 3 Justify the Choice of Country and Market Entry Mode 4 Internal and Internal Environmental Analysis 5 Required Market Research Type and Research Instruments 9 UNIQLO’s Current CSR Policy and Current Campaigns 10 Sustainability of the Business Model 11 Role of the Customers 12 Conclusion 13 References 14 Introduction Global business environment is becoming highly competitive as several leading organizations are trying to implement unique strategies in the business operation processes in order to gain potential competitive advantages in this competitive global business environment. Global fashion retail industry can be considered as one of the profitable and emerging industries as this industry is contributing significantly to the growth of global economy. UNIQLO can be considered as one of the leading Japanese clothing retailers. This fashion brand is popular for its high quality products in reasonable price level. It is true that global fashion retail market is highly competitive as several leading multinational and domestic fashion brands are trying to implement unique strategies in the business operation processes in several countries in order to maintain their core competencies. Expansion of business activities in emerging economies has become a significant trend for several organizations. Being one of the leading fashion retailers, UNIQLO has also tried to expand its business operation activities outside Japan. It is a Japan based fashion retail brand. This fashion retailing brand was originated in the year 1985 by Tadashi Yanai. Fast Retailing is the parent organization of UNIQLO. Since then, the organization has expanded its business operation activities in several countries across the globe. Recently, the organization is trying to enter in the emerging Indian market due to adequate industry growth rate and potential business opportunities. This particular essay will develop a suitable and appropriate marketing plan for UNIQLO in Indian market. Discussion This part of the essay will discuss about several important factors that are required to develop an effective marketing plan for UNIQLO in Indian market. Justify the Choice of Country and Market Entry Mode It has been mentioned earlier that the popular Japanese fashion retail brand, UNIQLO is trying to enter in the potential Indian market. India is one of the developing and emerging economies in this world. It is true that UNIQLO always tries to manufacture high quality, trendy, fashionable and casual outfits. On the other hand, demand for these types of fashionable outfits is increasing comprehensively among the people of young generation in India (Kaur, 2007, p.12). India can be considered as one of the largest consumer markets in this world. In addition to this, kids and young people of India are the major target audiences of these types of fashion accessories. However, number of target customers of fashionable clothes is increasing significantly in India. Moreover, the organization can get all types of business operation resources in reasonable cost in India that is required to run the business operation activities (Farrell, 2004, p.19). Therefore, it can be stated that the decision of UNIQLO to enter in the emerging Indian market can be justified through the above mentioned favourable facts and aspects. It is true that Indian fashion retail industry is becoming highly competitive as several leading domestic and multinational fashion brands are competing with each other. On the other hand, the brand recognition and brand equity of UNIQLO is quite low among the target customers in Indian market. Therefore, it is highly important for the brand to consider an appropriate market entry strategy. The organization should consider joint venture as the market entry mode strategy to enter in Indian market. It will help the organization to manage and allocate business operation resources quite easily. In addition to this, this aspect will help UNIQLO to get a developed and potential customer base of its joint venture business partner. Most importantly, joint venture market entry mode will help the organization to use the established supply chain network of its joint venture business partner. Sharing of risks in the business management process also can be considered as the advantage of this model (Halepete, 2008, p.11). Therefore, it can be stated that the joint venture market entry mode will be effective for UNIQLO to enter in the potential and emerging Indian market. Internal and Internal Environmental Analysis This part of the report will conduct an internal and external environment analysis of UNIQLO in Indian Market. Internal Environment (SWOT) Analysis SWOT analysis can be considered as an effective strategic marketing tool that helps an organization to determine its internal strengths, weaknesses and external opportunities, threats. The following SWOT analysis has been conducted with respect to UNIQLO. Strengths High quality of clothes and traditional Japanese fashion identity are the major strengths of UNIQLO. The organization always tries to avoid the third party involvement in the business operation processes. Therefore, the organization has the ability to offer trendy and fashionable outfits in reasonable and economic price level. Use of sophisticated textile technology and strong global brand image can help the organization to ensure effective business output in Indian market. Weaknesses Low brand equity, low brand recognition and inadequate brand awareness are the major weaknesses of UNIQLO. In addition to this, lack of potential loyal customer base and lack of access to an effective supply chain network at the initial stage of business operation activities can be considered as other weaknesses of this organization in Indian market. Opportunities Demand for traditional, trendy and fashionable casual Japanese outfit is significantly increasing among the people of young generation of India. In addition to this, emergence of online and social media marketing activities should be considered by UNIQLO in the business operation process to gain competitive advantages over its competitors. Last but not the least; it is true that the recent financial crisis and economic recession have affected the purchasing power of people. Therefore, it is highly important for the organization to adopt both differentiation and cost leadership business level strategy in the business operation process to offer high quality differentiated products in economic price level. Threats Intense market competition and low purchasing power of consumers are the major threats for UNIQLO. On the other hand, government of India has developed some strict policies for the business organizations in order to maintain social, economic and environmental sustainability that may pose real threat to UNIQLO in India. External Environment Analysis Porter’s five force analysis and PEST analytical framework can be considered in this part of the marketing plan in order to determine the impact of external environmental factors and external industry competitive factors on the business performance of UNIQLO. Porter’s Five Force Analysis Consideration of Porter’s five force analysis will help UNIQLO to determine the impact of industry competitiveness on its overall business performance in India. Buyer’s Power It is true that recent economic downturn affected the purchasing power of Indians. In addition to this, several domestic organizations are offering high quality fashionable clothes in economic price level to gain potential competitive advantages (Bruce, 2006, p.2). Therefore, it can be stated that the threat of buyer’s bargaining power is high for UNIQLO. Supplier’s Power Huge availability of suppliers can help the organization to source resources and raw materials in reasonable cost. In addition to this, decision to enter in Indian market through joint venture entry mode strategy can give UNIQLO the opportunity to have access to an effective supply chain network quite efficiently. It will help the organization to source materials and supply end-products in reasonable and low cost. Therefore, it can be stated that the threat of supplier’s bargaining power is low for the organization. New Entrant’s Threat Indian fashion retail industry is highly competitive as well as saturated due to the presence of several potential domestic and multinational brands. In addition to this, the new players have to face several entry barriers to develop new business in India. Looking into these aspects it can be stated that the threat of new entrants is low for UNIQLO. Substitute’s Threat It is true that demand for corporate, executive and smart outfits is also increasing significantly among the Indians. These are the substitutes of UNIQLO’s trendy and casual outfit. Looking into the growing demand for substitute products, it can be stated that the threat of substitute is moderate for UNIQLO. Industry Rivalry It has been mentioned earlier that the Indian fashion retail industry is becoming highly competitive due the presence of several leading domestic and multinational apparel brands. Each and every organization is trying to pose competitive threats to its competitors in order to grab each other’s market share (Kumar, 2009, p.21). Therefore, it can be stated that the degree of industry rivalry is quite high for UNIQLO in Indian market. PEST Analysis Following PEST analysis will help to determine the impact of external environmental factors on the business performance of UNIQLO in India. Political India is a politically stable country. The government of India is trying to influence the foreign companies to enter into the Indian market as it will help the country to mitigate several economical challenges, such as high unemployment rate. Therefore, it can be stated that the political environment is favourable for UNIQLO in India. Economical India is economically developing country but recent European financial crisis and global economic recession have affected the business environment of the country. Affected purchasing power of people is the major consequence of this global economic slowdown. Therefore, it can be stated that the Indian economic environment is slightly unfavourable for UNIQLO. Social Social demand for trendy and casual fashion apparel is changing slowly and steadily among the Indians. It is true that the demand for trendy, casual, traditional and colourful outfit is significantly increasing among the people of young generation in India. These are the major target customers. In addition to this, India is one of the largest consumer markets in this world. Therefore, it can be stated that the social environment s favourable for UNIQLO in India. Technological India is technologically developing country. The organization can adopt and implement advanced textile technological instruments, tools and processes in the business operation process as these are easily available in this country. Moreover, the organization can adopt and implement advanced technological tools in supply chain management process in order to bring efficiency in overall supply chain management activities (Sreejith, 2007, p.7). Looking into these aspects, it can be stated that the technological environment is highly favourable for UNIQLO in India. Required Market Research Type and Research Instruments There are two types of market research, such as primary market research and secondary market research. In this situation, UNIQLO should try to adopt and implement primary market research process in order to make effective decisions and develop several required business operation strategies. Although it is a time consuming process, but this primary market research process will help the organization to gather and source original, live and raw data. It can help the management of the organization to evaluate most informative database that is managed through primary market research process. Under the primary research, the management of UNIQLO should try to consider questionnaire and sample survey method in order to levy these data. It will help the organization to determine the market demand and market trend (Jin, 2010, p.16). Ultimately, it will help the organization to develop a strong and effective branding strategy based on the market demand and customer preferences. UNIQLO’s Current CSR Policy and Current Campaigns It is clear from the provided case study, that the management of UNIQLO has initiated several CSR activities throughout the years. Product recycling in several operating countries can be considered as the major CSR initiative. In addition to this, the organization has initiated several valuable CSR activities, such as providing employment opportunity to disable employees, providing sponsorship in Special Olympics and ensuring social business activities in Bangladesh. However, these corporate social responsibility activities have increased its brand image and brand equity among its external and internal stakeholders across the globe. Recently, the organization has initiated a CSR activity campaign considering recycling of products by developing a slogan i.e. “Changing Clothing, Changing Conventional Wisdom. Change the World. Most importantly, the management of the organization is trying to run the campaign in each and every operating country to maintain social, economical and environmental sustainability (Dwyer, 2003, p.9). Recommended CSR Campaign and Kind of CSR It is true that India is growing economically, socially and technologically. But, it is also true that some citizens of India can be considered under below poverty line level. Moreover, the kids and children of these families find it difficult to ensure proper shelter, food, drinking water, clothing and education as the family members or parents of these kids or children are deprived of any kind of employment opportunity. Therefore, campaigns like “Salam India” can be effective for UNIQLO in India through which the management of the organization should try to ensure good food, clothes, shelter and education for these children. Moreover, the organization can employ the jobless family members in some activities so that the effective corporate social responsibility can be enhanced. It can help the organization to increase its brand awareness as well as brand image among Indians. Moreover, the management of organization can get huge morale and legal support from the government of India (Mathew, 2012, p.23). It will help the organization to ensure successful and conflict free business practices in India. Sustainability of the Business Model It is true that the business model of UNIQLO has been criticised in recent years due to several casualties and injuries that has happened in a Chinese factory caused by building collapse. The organization always tries to offer quality products in low price level by reducing some business operation costs. Day-by-day, the customers are getting aware of scare resources and unsustainable consumerism. In addition to this, the organization used to offer outdated and old products in low price during the time of seasonal discount in some cases. It is actually affecting the brand image of UNIQLO as the management of the organization is finding it difficult to maintain sustainability in the business operation processes (Briti, 2008, p.3). However, it is not the fault of UNIQLO. Fast retailing group believes in these unsustainable strategies and activities in order to offer products in low price by reducing business operation cost in an unethical and unsustainable way. However, it is quite important for the organization to look after these issues in Indian market as the consumers of India always prefer high quality goods and sustainable consumerism. Role of the Customers It is true that Tadashi Yanai is implementing push marketing strategy in global market places by adopting and implementing aggressive marketing and promotional strategy to increase the sales of products at a rapid pace. It is true that the organization is facing issues like high employee turnover in Japan. Ultimately, these issues can affect the business performance of UNIQLO in Indian market (Nordas, 2004, p.18). Therefore, it would be effective for the organization to prefer joint venture as market entry mode strategy as it will help the customer to recognize the brand. Recommended Marketing Strategy to Yield Higher Brand Equity It is clear from above discussion and analysis that the business environment and consumer behaviour of India are slightly different from other countries. Therefore, it is important to select joint venture entry mode strategy in order to enter in the potential and emergence Indian market. Moreover, the organization should try to target the major business cities and metro cities as the target areas in India. Mumbai, New Delhi, Bangalore, Chennai and Kolkata are the major five metro and business cities in India. The management of UNIQLO should also try to capture the sub-urban areas through the help of its joint venture business partner’s supply chain network. Adoption of both cost leadership and differentiation strategy will help the organization to target the people of both urban and semi-urban areas as this strategy will support the purchasing power and needs of each and every Indian. Moreover, consideration of social media marketing strategy in business operation process will help the organization to create significant brand awareness among the target customers in India. Conclusion It is clear from above discussion that being one of the leading fashion retail brands, UNIQLO is facing several challenges and issues in global market places due to unsustainable business operation activities. It is true that the organization has initiated several unique and valuable corporate social responsibility activities. But, it is also highly important for the organization to ensure effective and sustainable business operation activities. It is true that Indian fashion retail market has become highly competitive as well as saturated due to the presence of several leading domestic and multinational organizations. Therefore, it will be difficult for the organization to find cost effective supply chain network and business operation resources. Adoption of joint venture market entry mode strategy will help the organization to offer products according to the needs of target customers and current market trend. It can help the management of UNIQLO to have greater access to a cost efficient supply chain network. In addition to this, the organization can enjoy an already established potential target customer base in Indian emerging market. References Briti, M., 2008. Towards a Sustainable Fashion Retail Supply Chain. International Journal of Production, 25(1), p.3. Bruce, M., 2006. Buyer Behaviour for fast fashion. International Journal of Fashion marketing and Management, 75(5), p.2. Dwyer, C., 2003. Co-modifying Difference. Environment and Planning, 63(2), p.9. Farrell, D., 2004. Beyond Off shoring. Harvard Business review, 43(2), p.19. Halepete, J., 2008. Wal-Mart in India: A success or failure? International Journal of Retail, 19(1), p.11. Jin, B., 2010. Comparison of Chinese and Indian consumers evaluative criteria when selecting denim jeans: A conjoint analysis. Journal of Fashion Marketing and Management, 32(2), p.16. Kaur, P., 2007. Uncovering Retail Shopping motives of Indian Youth. Young Consumers: Insights and Ideas, 26(1), p.12. Kumar, A., 2009. Indian Consumers’ Purchase Intention toward a United States versus Local Brand. Journal of Business Research, 56(3), p.21. Mathew, S., 2012. Adoption of Business Intelligence Systems in Indian fashion Retail. International Journal of business information system, 81(2), 23. Nordas, H., 2004. The global textile and clothing industry post the agreement on textiles and clothing. World fashion Retail, 45(3), p.18. Sreejith, A., 2007. Organized Retail Market Boom and the Indian Society. Journal of Retail Management, 21(2), p.7. Read More