Analysis of Uniqlo's Situation in the Indian Market - Case Study Example

UNIQLО ЕХРАND TО INDIАN MАRKЕT University Student Id Course Date Introduction UNIQLO operated in the clothing industry, and it managed to expand its operations in different regions globally. The company managed to develop varying strategies aimed at improving the performance of the company in the industry. The management of UNIQLO adopted competitive marketing strategies that helped the company in ensuring the competitiveness of its product globally. The resource capability of UNIQLO played a major role in improving its performance in the market where it managed to expand the operations to different parts of the world. For instance, its resource capability helped the company in investing in market research, innovation and product development with the aim of enhancing its competitiveness in the industry (Bhaumik, Driffield, and Pal, 2010). The increased overseas expansion was made possible because of the company resource capabilities leading to the development of innovative strategies that helped in offering competitive products. Analysis of UNIQLO’s situation in the global market using resource-based view The situation of UNIQLO in the world market is competitive considering its resources that led to its expansion in different countries globally. UNIQLO has competitive resources in the market that have played a major role in making it competitive in the global market. For instance, UNIQLO has continued experiencing an expansion in its market share in the Japanese fashion industry. It experienced wonderful expansion by introducing more than 500 stores an indication that it was gaining some competitive advantages in the industry. The overseas expansion continued, and the company introduced four more stores in London in the year 2002. UNIQLO was able to expand its operations in different region globally leading to its presence in the global fashion industry (Misra and Puri, 2011). The management of UNIQLO was in a position to increase its expansion in different parts of the world because of the availability of the necessary capital and high-quality human resources that helped in developing excellent market expansion strategies. Besides, the UNIQLO was very innovative in the market because of its ability to come up innovative strategies that ensured the competitiveness of its products. For instance, the outlets of the company in London were performing poorly, but the management developed innovative strategies that helped in remedying the situation. Some of the innovative strategies that were adopted by UNIQLO as a remedy included the use of fashion magazines, employing designers, hiring celebrities to help in marketing the company brands and acquiring smaller firms in the industry. Through acquisitions of the small firm helped UNIQLO continue improving its resources capability as it was able to increase its profitability. For instance, after employing the innovative strategies in London, the company was in a better position to improve its profitability an indication that it continued increasing its resource base. The management of UNIQLO was highly skilled leading to its success in the market despite the many challenges in the market. In some segment, UNIQLO could face some difficulties in the process of launching its products, but the management could come up with the best strategies that helped in addressing the market challenges. This is an indication that the company had a strong marketing team that had the necessary skills to market the company products successfully. The marketing team must have been motivated to work toward ensuring that the brand was successful in the London market. The company had highly qualified managed that could ensure proper management of the human resources to achieve the set objectives. Besides, the managed to align the organization operations with the set objectives to achieve success in the industry. The resources capability of UNIQLO helped in making sure that the ventures in the overseas countries were successful. Considering the fact that the company continued expanding its operations in different location globally is an indication that the company had invested in research. This is because for any successful launch an organization must conduct market research. It is through the market research that the company can be in a position to assess the market gas and develop the necessary products that can enhance the performance of the new product in the market. Therefore, it is the availability of the resources that helped the company in investing much in research and development (Luo and Tung, 2007). For instance, after UNIQLO launched the products in the London market and failed the management had to re-launch the product. UNIQLO continued with its venture in many other countries like South Korea, China, and New York. This is an indication that the company had enough resources to conduct market research in these overseas countries with the aim ensuring successful venture in the foreign market. Besides, the other resource capability of UNIQLO is the ability to manage change. The management of UNIQLO could work towards making sure that the expansion in the foreign market was successful. This was possible through conducting the necessary adjustments in the operations of the company in the foreign markets. The adjustments can only be possible through excellent change management strategies to ensure smooth operations of the company in the market. The technological capability is among the resources that helped UNIQLO in achieving competitive advantages in the market. The management made use of technology in the process of ensuring that the operations of UNIQLO were competitive in the industry. For instance, UNIQLO managed to open many stores globally due to its technological capabilities that helped in meeting the needs of the customers better in the market. Also, is through investing in technology that the company managed to be innovative in its operations leading to its successful operations in the market. Analysis of UNIQLO’s position in India. Micro level criteria The position of UNIQLO in India can be analyzed based on both the micro and macro environment facing the company. Using micro level criteria, UNIQLO the economy of India is stable leading to the improvement in the position of the company. This is an indication that consumers have the necessary disposable income necessary for improving the demand in the market as the customers can afford the products. For instance, the nominal Gross Domestic product of India is currently standing at 1.53 trillion American dollars thus making India be the tenth-largest economy in the entire world. In accordance to the purchasing power parity, the economy of India is the fourth largest in the whole world with an average purchasing power of 4.06 trillion American dollars. Moreover, the average growth of the Gross Domestic Product in every year have been 5.8 percent for the last several years hence making India have the fastest growing economy in the worldwide. However, the UNIQLO is also trying to arrive at 18 percent economic growth in every year. Importantly, the country India always has a great opportunity for growth because it has a well-organized retail industry which comprises of supermarkets, departmental stores and also hypermarkets. For instance, according to the research which was conducted in the year 2011, it showed that the value of the retail industry in India was almost 300 billion dollars and it was expected in the year 2015 it would have grown to around 637 billion dollars. Therefore, UNIQLO is likely to continue experiencing growth in the industry due to the good economic factors that are facilitating to its growth in the industry (Singh, 2010). Besides, the retailing industry in India has been increasing due to the favorable business climate that has led to the growth of the industry. For instance, currently, the retail market of India is the second fastest growing economy in the whole world. Some of the factors which have made the Indian retail market to grow at a faster rate include rapid urbanization, the high purchasing power of the Indians, a high number of working people and also a large number of working women among the others. Therefore, the India has become a lucrative market in which people from different parts of the world can do their investment (Singh, 2010). Also, the fact that India has been experiencing increased urbanization has contributed a lot to the expansion market for the products of UNIQLO hence leading to the company success in the market. The population of India population is an important determination of the situation of UNIQLO in the industry. The population size of India is large providing an important source of market and labor to the UNIQLO. The population of India is more than 1.21 billion hence India is a major source of market for the products of UNIQLO hence increasing the chances of improving the sales volume. Besides, more than 50% of the Indian population is comprised of the young generation hence they can be in better position to easily adapt to new fashions in the industry. This provided possibility of being successful in the Indian market because of the availability of a market for the company products. Macro level criteria There is low competition from the international firms as the Indian government has been discouraging foreign investments. This is an indication that the local firms are protected from the competition brought by the foreign firms in the industry. The fact that the local firms are protected from external competition is an advantage to the Indian firms (Athreye and Kapur, 2009). UNIQLO is negatively affected by the position of the Indian government of discouraging foreign investment hence being forced to establish a partnership with the Indian firms. This can make UNIQLO lack the necessary control over the company operations. For instance, for the several years, India has been resisting the international competition and also the foreign investment. In the year 1991, the country India initiated market reforms which were free thus created easy regulations on the direct investment in the foreign countries. The ministry of the Indian Industrial policy in the year 2008, revealed that any foreign investors who invested on a single brand of a product in the Indian retail market were allowed to have 51% of the total equity in the entrepreneurship. Therefore, for the UNIQLO, it meant that the investor had to form a partnership with a local firm which would own around 49% of the business in India. However, in the year 2010, Mr. Otoma who was the chief operating officer of the UNIQLO viewed this kind of regulation in a positive way. However, even though a large number of the foreign retailers recently can enter the Indian retail market, only a few of them who can form a partnership with the local firms hence there is the possibility of this regulation to change in future time. The increased regulations for operating in the Indian market is likely to negatively affect the success of UNIQLO as the partnerships regulations result in a decline in productivity in the industry. In Taiwan, foreign firms can directly invest in the clothing industry making it different from the Indian market where no direct investment are allowed. In India, there are many regulations discouraging foreign investments where foreign firms can only partner with the local firms with some agreements concerning the partnership made. However, in Taiwan, there are no regulations that discourage foreign investments. For instance, UNIQLO opened its first store in Taiwan in the year 2010, where it had control over the operations of the stores. UNIQLO’s entry strategy to the Indian market The best entry strategy that UNIQLO can use in the process of entering the Indian market is the distribution strategy. UNIQLO can partner with an Indian company to be the distributor of its products in the Indian market as foreign direct investments are not allowed in India as the government protects its local firms. India is usually the second market which is most popular in the whole world, and also it is the most complicated market for the investors to enter (Budhwar and Varma, 2010). This is because of the many regulations that are aimed at protecting the local firms from the international competition. As a result, coming up with the best strategy to enter the Indian market determine the success of the company. UNIQLO has to look for the best Indian company that they can enter into an agreement to be distributing the products of the company in the Indian market. Finding the right partner can help in making the company expand its operations into the Indian market and realize profits. India is usually the seventh largest economy in the worldwide regarding the Gross Domestic Product whereby it has a population of around 1.3 billion individuals. Also, it is also a complicated market for the best companies in India and even more complex to the foreign companies. Therefore, those businesses which have the pre-determined mindset and also little exposure concerning the international markets in most cases usually find the retail market of India to be intimidating (Johnson and Tellis, 2008). Hence, the identification of the right partner goes in hand with successful navigation on the complexities of entrance into the retail market of India. Furthermore, a local partner can provide a lot of assistance to the foreign investors in understanding the Indian market. Marketing mix (4Ps) UNIQLO while expanding its products to the Indian market has to consider its price, promotion, product and place. For instance, UNIQLO has to localize its products to meet the needs and the preferences of the targeted customers. India is a diverse country which comprises of a large number of different identities, cultures, Religions and also languages (Hennart, 2009). Therefore, it is always necessary to avoid making various generalizations or even assumptions concerning some local practices and also the behavior of the consumers. Therefore, developing products that can meet the diverse needs of the customers can be important in making the UNIQLO’s products competitive in the industry. Price is important in determining the demand for the products as according to the law of demand, the low the price the higher the demand hence the need to make sure that the prices are competitive to improve the product demand. It is always necessary for any foreign investor who is entering the retail market of India to understand well about the pricing strategy that is prevailing in the market (Waghmare, 2012). For instance, even though the economy of India is growing at a faster rate, there is still a low and also middle-income economy in that country. Place in marketing entails the positioning of the products in a way that the targeted customers can easily access them. The positioning of the products determines the sales where UNIQLO has to ensure that the distribution outlets are located in areas that have high demand for fashion products. The retail market of India is not a place where investors can make quick gains hence they are usually required to invest in their businesses for a long term (Mishra and Suar, 2010). However, even though the Indian market has got a high number of potential consumers, the entry into the market has got several challenges. Promotions are important in the retailing market in the process of making products competitive. UNIQLO can make sure that through the partnership the necessary marketing activities aimed at improving the demand for the company products are carried out in the market. Besides, UNIQLO can make use of social media platforms to make its products popular ass it is an efficient and effective way of marketing. References Athreye, S. and Kapur, S., 2009. Introduction: The internationalization of Chinese and Indian firms—trends, motivations and strategy. Industrial and Corporate Change, p.dtp007. Bhaumik, S.K., Driffield, N. and Pal, S., 2010. Does ownership structure of emerging-market firms affect their outward FDI? The case of the Indian automotive and pharmaceutical sectors. Journal of International Business Studies, 41(3), pp.437-450. Budhwar, P. and Varma, A., 2010. Guest editors' introduction: Emerging patterns of HRM in the new Indian economic environment. Human Resource Management, 49(3), pp.345-351. Hennart, J.F., 2009. Down with MNE-centric theories! Market entry and expansion as the bundling of MNE and local assets. Journal of International Business Studies, 40(9), pp.1432-1454. Johnson, J. and Tellis, G.J., 2008. Drivers of success for market entry into China and India. Journal of marketing, 72(3), pp.1-13. Luo, Y. and Tung, R.L., 2007. International expansion of emerging market enterprises: A springboard perspective. Journal of international business studies, 38(4), pp.481-498. Mishra, S. and Suar, D., 2010. Does corporate social responsibility influence firm performance of Indian companies?. Journal of business ethics, 95(4), pp.571-601. Misra, S.K. and Puri, V.K., 2011. Indian economy (p. 174). Himalaya Publishing House. Singh, K., 2010. Developing human capital by linking emotional intelligence with personal competencies in Indian business organizations. Waghmare, G.T., 2012. E-commerce; A Business Review and Future Prospects in Indian Business. Internet Marketing in India: Indian Streams Research Journal, 2(IV), pp.1-4. 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