Case Study Description of Uniqlo: Re-Examining American Expansion
Japan's number-one apparel brand and retailer, Uniqlo Co. Ltd. (Uniqlo), built its business by delivering high-quality basic casual clothing at low prices. Uniqlo's founder and chief executive officer of Uniqlo's parent company, Fast Retailing, stated that his goal was to become the world's number-one apparel retailer. He argued that success in the U.S. market was crucial to meeting this goal; yet, Uniqlo USA was not doing well. In mid-2017, after more than a decade of efforts, Uniqlo USA had relatively few stores and continued to lose money. As the gap between its goals and performance continued to diverge, the company needed to re-examine its U.S.-based business and potentially its globalization strategy altogether. Derek Lehmberg is affiliated with North Dakota State University.
Swot Analysis of "Uniqlo: Re-Examining American Expansion" written by Derek Lehmberg includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Uniqlo Uniqlo's facing as an external strategic factors. Some of the topics covered in Uniqlo: Re-Examining American Expansion case study are - Strategic Management Strategies, Supply chain and Global Business.
Some of the macro environment factors that can be used to understand the Uniqlo: Re-Examining American Expansion casestudy better are - – increasing commodity prices, wage bills are increasing, cloud computing is disrupting traditional business models, there is backlash against globalization, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, geopolitical disruptions,
competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Uniqlo: Re-Examining American Expansion
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Uniqlo: Re-Examining American Expansion case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Uniqlo Uniqlo's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Uniqlo Uniqlo's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Uniqlo: Re-Examining American Expansion can be done for the following purposes –
1. Strategic planning using facts provided in Uniqlo: Re-Examining American Expansion case study
2. Improving business portfolio management of Uniqlo Uniqlo's
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Uniqlo Uniqlo's
Strengths Uniqlo: Re-Examining American Expansion | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Uniqlo Uniqlo's in Uniqlo: Re-Examining American Expansion Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Uniqlo Uniqlo's in the sector have low bargaining power. Uniqlo: Re-Examining American Expansion has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Uniqlo Uniqlo's to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Uniqlo Uniqlo's is present in almost all the verticals within the industry. This has provided firm in Uniqlo: Re-Examining American Expansion case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Uniqlo Uniqlo's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to recruit top talent
– Uniqlo Uniqlo's is one of the leading recruiters in the industry. Managers in the Uniqlo: Re-Examining American Expansion are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Uniqlo Uniqlo's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Uniqlo: Re-Examining American Expansion Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Strong track record of project management
– Uniqlo Uniqlo's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Global Business field
– Uniqlo Uniqlo's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Uniqlo Uniqlo's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Uniqlo Uniqlo's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Uniqlo Uniqlo's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Sustainable margins compare to other players in Global Business industry
– Uniqlo: Re-Examining American Expansion firm has clearly differentiated products in the market place. This has enabled Uniqlo Uniqlo's to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Uniqlo Uniqlo's to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Uniqlo: Re-Examining American Expansion Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Cross disciplinary teams
– Horizontal connected teams at the Uniqlo Uniqlo's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Organizational Resilience of Uniqlo Uniqlo's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Uniqlo Uniqlo's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Uniqlo: Re-Examining American Expansion | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Uniqlo: Re-Examining American Expansion are -
Capital Spending Reduction
– Even during the low interest decade, Uniqlo Uniqlo's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Lack of clear differentiation of Uniqlo Uniqlo's products
– To increase the profitability and margins on the products, Uniqlo Uniqlo's needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Uniqlo Uniqlo's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Uniqlo Uniqlo's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Uniqlo: Re-Examining American Expansion HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Uniqlo Uniqlo's has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Uniqlo Uniqlo's, firm in the HBR case study Uniqlo: Re-Examining American Expansion needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Uniqlo: Re-Examining American Expansion, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Uniqlo: Re-Examining American Expansion, is just above the industry average. Uniqlo Uniqlo's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Uniqlo Uniqlo's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Uniqlo Uniqlo's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Uniqlo: Re-Examining American Expansion can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Uniqlo Uniqlo's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Uniqlo: Re-Examining American Expansion should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Uniqlo Uniqlo's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities Uniqlo: Re-Examining American Expansion | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Uniqlo: Re-Examining American Expansion are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Uniqlo Uniqlo's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Uniqlo: Re-Examining American Expansion, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Uniqlo Uniqlo's has opened avenues for new revenue streams for the organization in the industry. This can help Uniqlo Uniqlo's to build a more holistic ecosystem as suggested in the Uniqlo: Re-Examining American Expansion case study. Uniqlo Uniqlo's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Uniqlo Uniqlo's can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Learning at scale
– Online learning technologies has now opened space for Uniqlo Uniqlo's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Uniqlo Uniqlo's is facing challenges because of the dominance of functional experts in the organization. Uniqlo: Re-Examining American Expansion case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Uniqlo Uniqlo's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Uniqlo Uniqlo's can use these opportunities to build new business models that can help the communities that Uniqlo Uniqlo's operates in. Secondly it can use opportunities from government spending in Global Business sector.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Uniqlo Uniqlo's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Uniqlo Uniqlo's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Uniqlo Uniqlo's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Uniqlo Uniqlo's to increase its market reach. Uniqlo Uniqlo's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– Uniqlo Uniqlo's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Manufacturing automation
– Uniqlo Uniqlo's can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Uniqlo: Re-Examining American Expansion External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Uniqlo: Re-Examining American Expansion are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Uniqlo Uniqlo's needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Uniqlo Uniqlo's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Uniqlo Uniqlo's.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Uniqlo Uniqlo's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Uniqlo: Re-Examining American Expansion .
High dependence on third party suppliers
– Uniqlo Uniqlo's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Uniqlo Uniqlo's business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Uniqlo Uniqlo's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Uniqlo: Re-Examining American Expansion, Uniqlo Uniqlo's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Regulatory challenges
– Uniqlo Uniqlo's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Uniqlo Uniqlo's in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Environmental challenges
– Uniqlo Uniqlo's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Uniqlo Uniqlo's can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Shortening product life cycle
– it is one of the major threat that Uniqlo Uniqlo's is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Uniqlo Uniqlo's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Uniqlo: Re-Examining American Expansion Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Uniqlo: Re-Examining American Expansion needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Uniqlo: Re-Examining American Expansion is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Uniqlo: Re-Examining American Expansion is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Uniqlo: Re-Examining American Expansion is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Uniqlo Uniqlo's needs to make to build a sustainable competitive advantage.
