UNIQLO REEXPANSION IN NORTH AMERICA
It has continued to be successful due to its value for consumer preferences; global economies of scale in the value chains and fostering of supplier links. It has developed marketing platforms based on Web and retailing trends. PESTEL Analysis of Uniqlo Political/Legal Factors Political situation at the Uniqlo markets is not very steady in the United State of America, Latin Markets as well as the Asian markets. Especially in the United States of America, if Uniqlo is thinking of expanding, it should then consider adopting new marketing strategies at the quiet periods up to the moments that the financial statements are steady. i Political stability between Canada and Japan has resulted into more significant economic and political relations. The telecommunication act (1996), which gives the federal communication commission the right of refusing to give license to any company which indirectly or directly owns controls other company which has over 25 percent of the voting power for the capital stock or foreign voters.
The FCC would refuse to give the license due to safeguarding the public interest, and the refusal or revocation would serve the national security. Socio-cultural/ Demographic Factors North American culture is of great value, and it is recognized in media and pop-culture. North Americans are attracted to Japanese premium brands in fashions. Toronto in Canada is overpopulated with individuals who are fashion conscious and will always go for high-quality brands in Uniqlo. Japan and Canada have strong industrial relations and at the same time have excellent trade relations. Canada is extremely committed to getting new opportunities to enhance its economic ties with Japan. North American customers became more cost conscious and are likely to look for clothes of better quality with greater durability.
ix To fit in the American market, Uniqlo makes designs that make its customers look fashionable in the current world of fashion at meager prices through the use of its compelling business model. Global Factors Uniqlo has announced her position and objective of becoming the world leading brand by 2000. There were some elements of great potential in other countries markets. However, there were some dangerous risks. The North Americans have great respects for the Japanese brands due to the quality that is usually associated with such products, but the Japanese image which they put on the products has high chances of volatility among the Chinese general public. It sometimes triggers an eruption of demonstration for the anti-Japanese products. Despite those challenges, the Uniqlo Company has been able to have 472 stores in the North American markets.
xii Canada is very elevated from 246 to 686 feet above the sea level at the North York point, the changes in the weather patterns results in the increase in the number of tourists during the warmers seasons since the climate is very enjoyable to visitors. xiii Therefore, the physical environment in the United States is unique, and the Uniqlo must have adequate preparation to meet their demand, it may even prompt the company to consider tailor is making the products for specific customers so that they can satisfy their diverse needs. Unlike in Japan where people had similar values making easy the work of creating the product since you have learned what the community prefer then it would be marketable. Summary The political stability between Canada and Japan has been in favor of Uniqlo offering a business-friendly environment.
The company takes advantage of American love for Japanese brand to expand its territories and stores in the United States. Uniqlo excellent condition at low prices has enabled it to be substantially different from other brands. It has been difficult for new companies to enter the industry since they cannot match Uniqlo superior quality and at the same time maintain the low price Bargaining Power of Suppliers Since the market is oversaturated, the competitors will always set the pace for the suppliers. The competition is very high between Zara and Uniqlo and hence the need to maintain and protect one's source of supply. Uniqlo Company sends professional teams to different places like Nepal to buy raw materials. The Company also signs a prior contract with suppliers, for instance, 2 or 3 years before to ensure they supply the raw materials without delays.
These qualities make Uniqlo products stylish and different from everyone. Its wholesome functionality woven with Japanese technology and culture has continuously marketed it. The Company has been able to maintain the ownership of the raw material and work-in-progress making it hard for competitors to come up with substitute products. It then becomes difficult for an industry to develop substitute fashions to compete with the leading fashion Company in Japan. Competitive Rivalry The textile and fashion market is overwhelmed with very high rates of competition. The Company has been quick in adapting to the market trends leading to product differentiation. Product differentiation places Uniqlo on top of its competitors since it cannot easily be copied. Summary Uniqlo has been advantageous due to its economies of scale in the industry making it difficult for new markets to dominate the marketplace.
The company's quality fashion and lower prices it sets have been its competitive edge. This is a significant hindrance to other Companies who feel like dominating the market to replace Uniqlo. Contract negotiations with suppliers- The size and attractiveness of Uniqlo enable it to have strong bargaining powers with suppliers to benefit from low costs and realization of the right quality. The company has therefore been able to establish a long-term relationship with contracts who supply it with quality denim fabrics. Development of new products- Uniqlo Company, has been able to come up with new products in collaboration with its partners. Some of the new products are innovative fabrics for winter underwear and Heattech which is a heat generating fabric using milk proteins and Airism fabric designed for summer wear.
In coming up with these designs, they try to consider customer's intelligence as a most significant driver. The Company advertises the net worth of the products and their unique qualities on social media and Televisions. Support Activities The Company also practices online sales; these services enable customers to make orders online and collect their purchases from nearby stores. The support activities carried out by the Company are technological innovations and its support team activities. The Company's Takumi team is a group of skilled experts who integrate the links of its value chain. The group of engineers is more experienced as far as textile industry in Japan is concerned. Other significant events are retailing and product development which keeps the company going.
The support activities involve those of Takumi team who oversees the general operations of the Company and its participation in the technological innovation which has enabled it to meet the demands of customers and satisfy their needs. These advanced processes are vital in the re-expansion the Company in North America. Competitive Advantage of Uniqlo Company Uniqlo is known for providing high-quality casual wear at low prices. Uniqlo primary market in Japan and has contributed a bigger percentage of total revenue. The Company's innovation in designs has enabled it to come up with new clothes in the market such as AIRism, Heat Tech, and Life Wear. Uniqlo has managed to define an explicit brand promise which offers performance- improved global and high quality basic casual wear at affordable prices.
The company has developed a safe delivery channel that delivers on the brand promise. The Company stays close to its customers need since all its processes are within the house. The Company has the capability of assembling its fabric buys into large orders which leads to its negotiation power with suppliers. Uniqlo has a robust Company culture whose primary focus is on the employees. xviThe core values and the objectives of the Company are transformed into processes exhibited by its workers all over the world. The Company takes seriously every activity performed by its employers and records such actions for analysis. The Company is highly dedicated to innovation. The firms Heat Tech innovation is one of the results of innovation. xviii Four Criterion Model Evaluation The four criterion model of the business according to it CEO Yanai are Establishing you're ‘Why' as a company, The Company was found on being democratic, and this goes hand in hand with its slogan which says that ‘Made for all.
' xixAnother successful strategy for a business is in telling the truth; it's always better to start with the truth. The Company believes in being good and doing well. Uniqlo Company has been at the forefront of building a global retail empire that gives back to the society. Uniqlo gives recycled clothes to refugees, victims of natural disasters, evacuees and nursing mothers. Uniqlo is adopting a new strategy of focusing on US market and leveraging e-commerce. Through its design team, the Company is considering adjusting its size to fit the US market. The Company must turn its focus on e-commerce in the United States and Europe. It will allow it to develop an app which will enable easily accessible consumer shopping experience.
For the Company to compete for other global fashion retailers such as H&M. These fluctuating profits, therefore, affected the general financial performance of the business. In the financial year 2015, the company recorded total revenue amounting to JPY1681781 million. This was 21. 6% increase compared to 2014. The operating profit recorded was $1,397. 7 billion in the fiscal year 2015 to 0. 54billion in the fiscal year 2016. Uniqlo international in 2017 had a significant improvement in revenues. This was recorded to be 29. 2%, which is JPY507. 99 in 2016, this could be attributed to the fact that most of the individuals vary have some specific periods for purchasing clothesxxii. Liquidity ratios Liquidity ratios usually act as the indicator whether the current company asset will be sufficient in covering the company liabilities or the obligations when due.
The higher the value of the proportions, the better it indicates that the company can cover the obligations. Uniqlo Company has been having a good trend over the last five years. xxiii Leverage Ratio Leverage ratios are the financial measurement which considers, the extent to which the company can cover the obligations through the proper management of the company assets. This indicates that Uniqlo had continuously lost money since it entered the American market where it opened 45 stores. xxviThere is a great need for the Company to reconsider its re-expansion strategies in North America to capture a more significant market share. By so doing, the Company will recover its lost revenue and be able to compete for dominating Companies like Zara and H$M.
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