Fast Retailing Group- Gaining an Edge through Continual Adaptation - Essay Example

Fast Retailing Group- Gaining an Edge through Continual Adaptation Executive Summary The reason behind the success of Fast Retailing Group (FR) has been the visionary approach of its CEO Tadashi Yanai. The objective of Tadashi Yanai had been to continually understand and grasp the emerging market trends in both the local and international markets and to adapt the company’s managerial and marketing policies in response to these ground level realities. There is no denying the fact that Tadashi had been able to do much to expand the market presence and customer share of the Fast Retailing Group (FR), by helping it grow from a single store specializing in men’s wear to a retail chain that offered casual ware for all types of customers. The progress of the Fast Retailing Group had been slow but consistent. This clothing concern grew from being a single store to being a regional chain and then to grow up to have an international presence. It would not be wrong to say that the Fast Retailing Group (FR) did face many setbacks and failures during this process. However, the amazing thing about this company is that its management learnt and drew up lessons from these setbacks and failures and continually adapted the company to the ground level realities and challenges. The objective of this report is to analyze as to how the Fast Retailing Group gained an edge in the apparel retail business by having a policy of continual adaptation to the changing market trends and customer preferences. Table of Contents Executive Summary …………………………………………………….. 2 1.0 Introduction ………………………………………………………….. 4 2.0 Discussion ……………………………………………………………. 4 2.1 Company with a Vision ………………………………………………. 4 2.2 The Right Management Values ……………………………………… 5 2.3 The Right Business Models ……………………………………….. 6 2.4 Thrust on Leadership Development …………………………………… 6 3.0 Recommendations ……………………………………………............... 7 4.0 Conclusions ………………………………………………………………. 8 References ………………………………………………………………… 9 1.0 Introduction The one big thing that differentiates Fast Retailing Group (FR) from other apparel chains is that it is a company that has a clear and precise vision and mission. The management and marketing practices of this company happen to be a direct outcome of this mission statement and vision. The ultimate goal of the fast retailing company since its current CEO Tadashi Yanai took over business had been to manufacture “great clothing” that satisfies the needs and preferences of a great variety of consumer segments. The move on the part of the Fast Retailing Group (FR) to diversify into a retail apparel chain was to a great extent motivated by the success achieved by many apparel retail chains in the West and the Asian markets. However, Tadashi Yanai was very practical in his vision in the sense that he made it a point to learn from the trends influencing the local markets. The company did make an effort to learn from the management and sales and marketing policies of the Western retail apparel chains. However, it does need to be mentioned that the Fast Retailing Group faced many setbacks during its expansion moves. However, the top management at Fast Retailing Group systematically studied and analyzed these setbacks and mistakes and made the necessary corrections to the subsequent policies and plans. Thereby, the ability to adapt to the local and emerging customer preferences and the need to contrive the overall management, manufacturing and sales and marketing policies in tandem with these changes did help Fast Retailing Group (FR) command a space in the local and international apparel retail business. 2.0 Discussion The objective of this report is to study and understand the factors that helped Fast Retailing Group (FR) grow from being a single store dealing in menswear to being an apparel retail chain having a global practice. The conclusions drawn from this analysis will provide much insight as to the policies and practices that can help the small businesses evolve into chains having a global presence. 2.1 Company with a Vision The one big factor that made Fast Retailing Group (FR) different from the other apparel chains operating in Asian and Western markets is that this company happens to have a clear and precise vision. Though the top management at Fast Retailing Group (FR) did not exactly know as to the consumer preferences and market challenges they will come across, yet the CEO Tadashi Yanai did have the capacity to think about a future that he desired for the Fast Retailing Group (FR), and to consider the steps that the company needed to take to achieve this vision. This very ability did play an important role in allowing the Fast Retailing Group come out with some of the very successful apparel brands in the local and overseas markets. The special thing about Fast Retailing Group (FR) is that not only it has a formal vision, but the top management made it a point to spread this vision across the company branches and stores. Tadashi Yanai right from the start had a clear picture as to the shape that he wanted his company to take. He also had a clear picture regarding the kind of management and employees that will help him achieve this goal. This vision helped the top management at Fast Retailing Group (FR) come out with a mission statement that was to direct and guide the company’s expansion policy over the next couple of years. The other thing about this company vision was that it happened to be clear and exact that helped the company identify the steps to be taken to achieve success and the things that it needed to avoid to prevent setbacks (Hess 151). One thing that was peculiar about the Fast Retailing Group (FR) was that its vision happened to be alive that managed to incorporate and analyze the failures and setbacks that the company faced during varied stages of its diversification and expansion plans. Hence, as per the aspirations of the CEO Tadashi Yanai, Fast Retailing Group (FR) happened to be a company that believed in continual learning and adaptation. It was this capacity of this apparel retail chain that allowed it to meet the competition it faced during its diversification and expansion plans. During the tough times that the group faced during its expansion process, it was this vision of the company that provided it with a sense of direction and purpose (Hess 151). 2.2 The Right Management Values The thing that needs to be understood is that a vision or a mission could prove to be a dead and useless document if the values given in this vision document are not adopted by the businesses (Kamoche 22). The other good thing about Fast Retailing Group was that during its growth process it was able to adopt the right values in the management, manufacturing and sales and marketing areas of business (Ijiri 254). In line with the values drawn from its mission statement, the Fast Retailing Group (FR) was able to chalk out and establish the standards of conduct and practices that it wanted its managers and employees to adhere to. The top management at Fast Retailing Group (FR) made it a point to learn from the mistakes made by the company and to draw out lessons from these mistakes to build a corporate culture that helped the company progress in the local and overseas markets. When one talks about the organization values at Fast Retailing Group (FR), excellence did come out as one important value that continually encouraged the company to achieve success in its diversification and expansion endeavors. Fast Retailing Group (FR) never got satisfied with the way the business was run at its manufacturing and designing facilities and at its stores and made it a point to continually identify the mistakes that the company was making and took steps to correct these mistakes. The company always made it a point to come out with better products offered at the prices which provided the customers with the right mix of quality and price. Throughout its expansion endeavors, the company always tried to view the emerging issues and challenges from the point of view of the customers and to churn out new products that happened to be as per the customer preferences (Lee & Johnson 27). It was this sensitivity of the company towards the customer expectations and preferences that happened to be a business value that helped the company a lot in expanding its business across Asia and the West. The other big management values that helped the company a lot was that the Fast Retailing Group was always open to innovation. Instead of getting discouraged by the coming failures and losses, the management at Fast Retailing Group (FR) always took the challenge to innovate and change, a value that continually helped the company emerge to be a winner and a survivor. The company always tried its best to consider and analyze the setbacks that it received in the new markets and used the lessons learnt from those failures and setbacks to take steps that fulfilled the customer needs and expectations. The company always went ahead to study and understands the practices and products that defined the markets in which it wanted to grow, and adapted its manufacturing, designing and sales and marketing policies to adapt to those practices and customer expectations. Hence, it can be said that it were the organizational and business values at Fast Retailing Group (FR) that were based on the organizational vision and the lessons that the company learnt in the new markets that helped it compete well. 2.3 The Right Business Models The one big factor that immensely aided the Fast Retailing Group (FR) was the choices of right business models (Stanton 138). In a simple sense a business model pertains as to how a company runs business (Stanton 138). Choosing the right business model could go a long way in helping a company achieve success. Thereby, the components that the Fast Retailing Group (FR) incorporated in its business models helped it a lot in gaining a competitive edge. The thrust of the Fast Retailing Group (FR) business model comes out as being the tendency to create value for customers. The company not only made it a point to create value for customers but also assured that the customers did get to know that it was offering to them the value for money. One important aspect of Fast Retailing Group business model was that it tended to produce new products on the basis of the feedback extended by the customers. The interesting thing is that right from the start the company understood the value and importance of gathering feedback from the customers regarding their products. This feedback indeed made it possible for the management to get into the mind of the customers and to understand as to what they expected from the products being offered by the company. The endeavor made by the company to alter and change its products in diverse markets as per the customer feedback, it showed to the customers that the company cared for them (Griffin 182). The other good thing about Fast Retailing Group’s business model was that it happened to procure materials from around the world. This allowed the company to achieve the economies of scale and to offer the best products to their customers at the minimal price. The other big thing that went a long way in popularizing the Fast Retailing Group (FR) products amongst the consumers in diverse markets was the ability of the company to manage customer opinions and values through advertising in the old and new media. In that context the company was able to convey to the customers in varied markets the desired message that the company intended to provide its customers with the quality products at an affordable price. Thereby, the close connectivity between the customers and the product designers, manufacturers and sellers at the Fast Retailing Group (FR) made it possible for the company to gain an acceptance amongst the customers in the markets in which it placed its stores. Thereby, the business model of the Fast Retailing Group (FR) happened to be versatile, innovative and flexible, which allowed it to respond in a prompt and timely manner to the changing consumer preferences and expectations in diverse markets over time. This model allowed the company to always being in a learning mode, and to gain competence by evaluating its mistakes and experiences. 2.4 Thrust on Leadership Development One strong aspect of Fast Retailing Group (FR) was that the company was indeed able to identify the link between customer expectations, the company’s bottom line, employee commitment and organizational leadership. The company was indeed able to identify at a very early stage that there existed a marked link between the leadership within the organization and as to how the customers perceived the products being offered by the company in varied segments and markets (Avolio 11). Thereby the company came out with a Fast Retailing Management and Innovation Center (FRMIC) with the objective of preparing a leadership for the future that was set to come out with new and innovative ideas. The CEO of the company did have an intuitive understanding of the fact that extending to the managers and the employees the opportunities to become leaders of the future could go a long way in strengthening and consolidating the position of the company in times to come. This extension of leadership opportunities to the employees through FRMIC did yield many advantages to the firm in the form of increased sales, an improved performance by the stores that were underperforming, a strong team work and cooperation between the management and the staff and an increase in the revenues. 3.0 Recommendations The report makes following recommendations to the fast retailing group: The company should always keep in mind that its vision happened to be the key to its success. The top leadership in the company does evince a commitment to success right from the start. Initiatives need to be taken to assure that this commitment to management excellence spreads across the vertical and horizontal channels of influence across the company to influence the managers operating across the length and breadth of the company (Allenman 225). Going by the apparel retail industry today, management excellence is the need of the hour. Hence the company leadership should build on the initiatives to learn from the mistakes and to take appropriate steps to dilute the excess operational costs out of its future operations, to improve and better the associated business processes as it spreads its operations across the new markets, and to keep on building on the measures to enhance the quality of their products while keeping the prices within the reach of the customer segment that is looking for quality. The leadership should lay more stress on performance management as it takes measures to venture into new markets. The top leadership should opt for a systematic introduction of the professional quality management systems within its organizational frameworks so that it could continually go on improving the organizational performance in tandem with the incoming customer preferences and trends (Preece & Antony 54). The top management ought to gradually shift the organizational visions towards the objective of achieving balanced results, where the objective of creating value for customers gets balanced against the need to keep the prices competitive. The company should hold on to its specialty of leading with vision and inspiration as it did right from the start. In addition the company should also consider the need to building strategic partnerships in the new markets, so as to be more competitive and efficient. The company should keep the organizational vision flexible that could be changed and adapted to the changing market realities. The company need to realize that as it enters the new markets in China and the US and increases its points of distribution, the competition there is getting indeed tougher. In the past few decades, the decline in the transportation costs and the new developments in the information technology have vastly redefined the apparel retail industry. Thereby the company does need to take these factors into consideration while entering the new markets. While progressing in the new markets, the company does need to reinvent and redefine its supply chain in consonance with the characteristics and peculiarities of these markets, to be a success. The company should take a regular inventory of its key organizational values. The business models of the company bust be regularly revised and reconfigured in tandem with the emerging changes. The company should go on taking an audit of the diverse stakeholder needs and must build on the initiatives to reconcile the diverse stakeholder needs both from inside out and from outside in. The company must take steps to register a presence in the societies in which it introduces its distribution points and must start social programs that happen to build relationships with the societies in which the company expands its business (Woodside 27). The company needs to take notice of all the processes that account for all of its stakeholder management needs, and must further refine and reinvent these processes with regards to the new markets it enters. The future leadership should be given a firm grounding in the right theoretical inputs and the complementary practical realities. The company must establish a two way relationship with the future organizational leaders, where the important organizational values are introduced to the future leaders and they are continually encouraged to come out with new and innovative ideas and suggestions. 4.0 Conclusion It is a fact that Fast Retailing Group (FR) does comes out as a company that kept on reinventing itself to achieve the right mix of a sound business vision, the right an appropriate business values, the complementary business models and the need to prepare leadership for the future. The company was able to evolve from a single local store dealing in menswear to an international apparel retail chain owing to the sound business vision contrived by its CEO right from the start. The business vision at Fast Retailing Group (FR) happened to be organic that continually learnt from and adapted itself to the altering market scenarios. The company also did much to complement this business vision with the appropriate organizational values. The business values at Fast Retailing Group (FR) happened to be highly customer driven that forced the management and the employees to evolve and change with regards to the fast changing customer preferences and choices. It was this mix of the right business values when complemented with the appropriate business models that allowed the company to enter and grow in the overseas markets. One simply cannot deny the value and relevance of the right leadership at the Fast Retailing Group (FR). The leadership at the company always happened to be flexible and open to change and believed in learning from mistakes. The leadership encouraged the managers to be proactive and to contrive such policies and measures that aimed at catering to the needs and expectations of the end customers. The company well understood the fact that its future success depended a lot on the quality of its future leaders. Thereby it built the organizational mechanisms to train the future leaders. References Allenman, Glen B. Performance-Based Project Management. New York: American Management Association, 2012. Print. Avolio, Bruce J. Leadership Development in Balance. Mahwah, NJ: Lawrence Erlbaum, 2005. Print. Griffin, Jill. Customer Loyalty. San Francisco: Jossey-Bass, 2007. Print. Hess, Edward D. Growing an Entrepreneurial Business. Stanford, CA: Stanford Business books, 2011. Print. Ijiri, Yuji. Creative and Innovative Approaches to the Science of Management. Westport, CT: Quorum Books, 2002. Print. Kamoche, Ken N. Understanding Human Resource Management. Buckingham: Open University Press, 2009. Print. Lee, MiYoung, & Kim KP Johnson. “Customer Expectations for Service at Apparel Retail Outlets”. Journal of Family and Consumer Sciences 89.4 (1997): 26-30. Print. Preece, David, & Jiju Antony. Understanding, Managing and Implementing Quality. New York: Routledge, 2009. Stanton, Thomas H. Why Some Firms Thrive While Others Fail. New York: Oxford University Press, 2011. Print. Woodside, Arch G. Market-Driven Thinking. Boston: Butterworth-Heinemann, 2010. Print. Read More