Unique Clothing Warehouse: Expansion Policy - Case Study Example

UNIQLO MARKETING PLAN Table of content Page Executive summary……………………………………………………………………..3 Background information……………………………………………………………….3 Company Analysis………………………………………………………………………3 Market Analysis ………………………………………………………………….…....4 Discussion……………………………………….…………………………………….5 References………………………………………………………………………….…6 Executive summary UNIQLO is one of the best fashion retailers in the world. Basing its marketing and profitability on the fashion retail industry (clothing), UNIQLO is a wholly owned subsidiary with it’s headquarter in Tokyo Japan. The company has become Japan’s biggest retailer and almost the world’s largest after the current chief executive officer, Tadashi Yanai took over the company in 1984. In a fast developing business world, UNIQLO offers modernized and traditional designer clothes that suit every tastes and preferences in almost all corners of the world. The purpose of this plan is to form an international strategic marketing plan for UNIQLO Co, LTD, a wholly owned subsidiary firm, large in size and located in Japan. The theoretical aspect of this plan will represent the marketing and international business orientation of UNIQLO in terms of the clothing industry and also the challenges that the providers of clothing and other wears face when it comes to marketing different products and updates of their marketing plans. The plan will adopt a strategic research study to come up with qualitative data that will be analyzed for content analysis. More than that, in-depth examinations were conducted with the stakeholders of the company, such as owners, employees, as well as some of its customers. The result of all the analyzed components will be the basic strategic course outlining the strategy or course of action plans on the best ways that the UNIQLO should have its marketing proceeds. Background information As stated above, UNIQLO is the world’s sixth apparel retailer with over 944 stores in the world. Established in 1984, the company has manifested a steady growth, especially after its reestablishment by the current CEO, Tadashi Yanai, to a company that makes sales of over 568.4 billion yen (Hasegawa, 2010). It has a great goals and mission of being the world’s largest clothing retailer after its reestablishment. The table below illustrates the net sales and profit between 2002 and 2013. Sourced from: www.fastretailing.com/eng/group/strategy/tactics.com The company’s current position is of high fashioned clothes, with high quality and low process. This has been the focal point of its speedy growth over the decades to establish itself among the best selling apparel retailers in the world and the best in Japan (Haghirian, 2009). Its store performance and focuses are illustrated in the table below; Table 2: Flagship brand development FY to Aug. 2011 FY to Aug. 2012 FY to Aug. 2013 (Forecast) End Aug. YoY End Aug. YoY End Aug. YoY Japan 843 +35 845 +2 854 +9 China 80 +26 145 +65 225 +80 Hong Kong 15 +2 16 +1 18 +2 Taiwan 1 +1 17 +16 37 +20 South Korea 62 +14 80 +18 105 +25 Singapore 5 +2 7 +2 11 +4 Malaysia 2 +2 5 +3 8 +3 Thailand 0 0 4 +4 9 +5 Philippines 0 0 1 +1 6 +5 U.K. 11 -3 10 -1 10 +0 U.S. 1 0 3 +2 7 +4 France 1 -1 2 +1 3 +1 Russia 3 +2 2 -1 2 +0 UNIQLO Total 1,024 +80 1,137 +113 1,295 +158 Sourced from: www.fastretailing.com/eng/group/strategy/tactics.com UNIQLO has enjoyed market advantage in the clothing industry due to its four key business advantages: I. Development of products of exceptional high qualities II. Rapid expansion in international scene y becoming globally relevant in its products and services III. Expanding market share, especially in Japan and thus becoming the Japanese top brand IV. Forming a merger with an industrial suited company, Toray, and thus forming HEATECH and becoming a uniquely function al line of innerwear of great qualities Focusing on its international marketing strategic plan, this report focuses on the international market segmentation as well as international targeting. Putting real analysis of the company in a potential market, United Arabs Emirates (UAE), that is also an economic hub of the gulf region, this paper seek to make relevance of the marketing progress in the world of the company (Hasegawa, 2010). In this case therefore, the report looks into the modes of entry into the United Arabs Emirates market and the international ‘‘4ps’’ in the UAE market (the price, product, positioning, place) (Haghirian, 2009). The organizational framework of this strategy will focus on the microenvironment issues as well as the micro-environmental marketing factors in UAE. These ill form the motivations or the obstacles of the company. Therefore, considering the company analysis in terms of the strategic analysis such as SWOT analysis, the marketing plan will show the relevance of the company’s suitability to increase its international market share even into the gulf region. The main objective of the international marketing plan is to bring the company closer for trading and increasing its large scale sales in the countries like United Arabs Emirates. In addition, the company’s plan is to expand its marketing niche as well as achieve its sales objective. The growing economy of the United States Emirates is well suited to offer the relevant marketing experience for the company, and considering that the country is an economic hub in the gulf region, the company can opt to opening its subsidiary in the country. Company Analysis The strategic analysis of UNIQLO is based on the facts that make the company the largest retailer in order to achieve the two trillion JPY per year sales (Haghirian, 2009). This is a great objective but with international strategic standards, the company can put its reliance on value production for customers and above its competitors. This objective also stands for the brands position, brand communication campaigns, current management conventions and conditions of the company, identification of the opportunity, as well as channeling proper information into unique selling point (Worthington, 2012) considering the company SWOT analysis below, the international marketing balancing can be will created if the market opportunity, as identified in the United Arabs Emirates becomes a welcoming real marketing niche. UNIQLO international business strategy As stated above, the company’s international strategy is aimed at developing products of exceptional qualities, becoming world top brand in apparel products by expanding its market share, in Japan and in the world, and rapid internal expansion (Kaputa, C. 2012). In order to ensure achievement of the first aim, UNIQLO has designed an excellent strategic model that specialize in store retailing of private label apparel (SPA) that controls designs, plans procurement for materials as well as sales. In this way, the company creates clothing with new and unique values that can satisfy customers worldwide, and especially the customers on the United Arabs Emirates. In line with the UAE customer tastes and preferences, the research and development team of the company is to advance in its extraction of the customer opinions of the UNIQLO product, since this would play a critical role in product development (Hasegawa, 2010). Customer feedbacks are very important for the company because these feedback comments make the company to produce the high quality apparel that it has been known for. Considering the improved brand of the UNIQLO products worldwide, the company intends to open various outlets in UAE as a marketing taste in order to later on generate strong sales and popularize itself with the UAE potential customers. Just as UNIQLO became Japan's leading apparel retailer by developing a network of mainly regional roadside stores, this move would be will employed in the UAE market (Kaputa, C. 2012). With the increasing creation of new and sensitive product orientations, these will also meet the sensitive customer in the UAE, considering the customer behavior patterns. The speedy and flexible decision making process of the UNIQLO management will aid in the speedy implementation of the ‘to be’ adopted marketing plan in United Arabs Emirates (Haghirian, 2009). The SWOT analysis of UNIQLO Co. Ltd The SWOT analysis of Uniqlo takes into consideration the fact its parent company, Fast Retailing Ltd operated in a weaker industry than the current industry. With an innovation based slogan, ‘driven by innovation’ the company operates in the unique high fashion USP and has segmented its market into retail stores chain and targets both the middle class and the premium class households (Kaputa, C. 2012). The company is positioned in the huge variety of styles and high quality products at affordable rates. Strength Uniqlo has an advantage of being the Japanese number one in casual wear brand, both in profits and sales. With over 30,000 employees worldwide, the company has a great value creation and products accessibility all over the world. Its international outlook in several countries in the world beyond Asia into Europe and even America makes it posses an innate strength (Worthington, 2012). The company also has a wider range of products that suit different tastes and preferences of both the male and female. In addition, these products are high quality. At the same time, the production cost of the company’s products s low as well as its management system. In this way the company’s growth has been established on its consistent productivity and creativity all the seasons. Its products are very fashionable and at the same time very essentials. Finally, the company’s well established outsourcing practices with other cooperates in China makes the firm produce products at cheaper costs. Weaknesses The company faces unusual high cost across boarders due to import tax and currency conversion issues. Low strong brand loyalty compared to its world competitors and product variety and launching based on the four seasons, the company showcases some of its weaknesses Opportunities Globalization of the modern world business has energized fashion trends around the world far into countries like the United Arabs Emirates that advantage a firm like Uniqlo. There is brand awareness of its products. At the same time, the emerging trends in the clothing and apparel markets favor firms that operate in the global arena and seek to expand. Economic growth and civilization development are contributing to the high demands of consumer market and therefore with the growth of Innovations in information technology, the speed with which information travels throughout the world is increased (Hasegawa, 2010). Low-price clothing and apparel are welcomed in Japan, presenting a huge business opportunity, not only in Japan, to all parts in the world, especially in UAE. Threats The difficulties witnessed in getting more market share due to increased competition in the apparel market in the world may make the company’s establishment in the UAE. This may also be due o the low brand awareness in the region. Some countries have poor response to products from some countries and this may pose great threats to Uniqlo (Kaputa, C. 2012). Finally, the changes in the political, economic, natural disasters as well as the legal environment in emerging economies such as UAE could result in adverse impact to its business results. Market Analysis Marketing analysis of the UAE market considers the ethnocentric, polycentric, region-centric as well as the geocentric aspects of the market (Ansoff, 2004). With the global trend in business world, business management should encompass some dynamic management techniques that are always proactive to issues that may affect the company’s business since this would be the motivating elements of marketing. More than that, marketing analysis also involves the internal and external as well as other methodological obstacles that may stand before the company’s expansion in the region. Some of the internal obstacles, according to Worthington, (2012), such as lack of competent management, marketing and language, lack of infrastructures, as well unwillingness to accept new ideas may derail the company’s progress in the region. Unforeseeable circumstances from foreign market place, such as political, legal entities, natural disasters and consumer behaviors may also influence the expansion progress in a region. With the Uniqlo aim of increasing its turnover in the next four years after its continued expansion in Singapore since 2009, the company has to increasingly open new flagships in other regions such as UAE. With the successes of the brand image in the UK and the U.S., it is paramount that it is also capable of expanding to other new regions (Haghirian, 2009). Based on the fact that South America, India, and Australia as well as other emerging markets have different cultural and economic diversities that would challenge the company’s progressions in such regions, the company is highly determined to prosper in countries like the United Arabs Emirates as well. Considering the market attributes of United Arabs Emirates, and especially in Dubai, the following attributes make the region a good marketing ground for Uniqlo (Kaputa, C. 2012). Dubai (UAE) has emerged as the leading regional commercial hub in the gulf region and according to Worthington, (2012), has the state of art infrastructure and world class business environment. The middle east term Dubai as the best and logical place for international business since it provide investors with unique and comprehensive value added platform for doing business. it therefore has a great potential in providing the necessary brand promotion of the Uniqlo product into the larger gulf region. According to Cateora, & Graham, (2008), UAE has transformed itself since 1971 from oil and gas based economy into a broadly diversified, with diversified cultural orientations, country that can easily accommodate international firms and products into its markets. Considering the geocentric aspects of the international marketing, Dubai for example is at the centre of a region that is considering an emerging as a source of global economy. It stretches from North Africa to the Southern part of the larger Asia and the Caspian to the Southern par of Africa (Hasegawa, 2010). As it seems from facts, the region captures 42 countries, with most of them considered world’s fastest emerging economies. From the political-centric and the economic-centric perspective of the international marketing, the region has a well established reputation of being low-crime and politically stable country. This means that the country is stable and has the ability to withstand the impacts of global financial crises (Cateora, & Graham, 2008). The economy of United Arabs Emirates has an open economic policy that have minimal government control and this means that the private sector regulations are very flexible for foreign firms and this has played greater role in attracting foreign firms, looking by its foreign direct investments (FDI). The country, especially Dubai has an excellent infrastructure, with its transport systems, telecommunication, energy, as well as industrial infrastructure offering world class infrastructure suitable for international business. With a firm like Uniqlo looking for global expansion, the market situation in, UAE offers an excellent platform for expansion. UAE has an extensive foreign trade networks and this give the foreign firms the advantage at an extended global marketing choices for their goods and services. Dubai particularly is the large largest export and re-export centre after Hong-Kong and Singapore. As Uniqlo plans to extend it products and services by introducing its brand in this region, it is very appropriate that all avenues are clear for the expansion (Haghirian, 2009). The company should use the region as a way of extending its global lead in the apparel products in the world and achieve its global objective. The region offers a market that is composed of multi-cultural communities. This would readily accept the highly designed product of Uniqlo that would be readily made to suit the different tastes and preferences of different cultural orientations in the region. Discussion With the transformative leadership of the company, the management effort to expand the company’s image and make it successful and complete according the company’s CEO would be easily achieved if it diversifies its markets to United Arabs Emirates. With the retail model adopted from the parental firm, ordering new lines many times can be well accommodated in emerging and strong market economies like UAE. Innovative charismatic and drives would drive UNIQLO to the helm of global lead in the apparel and clothing products, especially if the company establishes itself in economically vibrant economies like UAE. The company offer of varied varieties that are of higher qualities and of cheaper prices is an added advantage that will make its image be a success in the region. Taking its low production cost experience with collaboration with other Chinese firms, the company will survive the challenges that would arise in the region. This will also offer greater advantage over its supposedly competitors (Haghirian, 2009). The business environment in UAE is very favorable both internally and externally and with the business strategies supported by the company’s management, strict marketing decisions to advance to the Dubai market will be fast and strategic (Doole, & Lowe, 2008). The microenvironment of Dubai as described above will offer clear advantage of the innovative driven Uniqlo and will have an immediate impact in the industry. In the same way, Uniqlo cooperate social responsibilities corresponds with the business expectation of the UAE. Besides making the products affordable, accessible, fashionable, the company intends to recycle products and redesign them based on the emerging clothing trends in the market (Young, 2010). More than that, the company will advance in its customer service relations by ‘changing the world for better through clothing’ determination through its CSR activities such as products recycling initiatives, sponsoring of special Olympics, employing employees with disabilities in the region as well as steeping its effort for cleaner environment. Conclusion Uniqlo expansion policy undergoes through major breakthrough with its advancement into the gulf markets such as Dubai. With all platforms for business ready and favorable, all that remains are the management declarations. With the current trend, the company stands a high chance of achieving its global objective. International marketing is closely connected to the company’s global marketing strategies. Economies like United Arabs Emirates offer an unimaginable speed to success because it has an extensive market at the innovative standards of the company. References Ansoff, H. I. 2004. 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