Case Study Description of Uniqlo: Expansion into Canada
In September 2016, Fast Retailing Co. Ltd. entered the Canadian retail industry by opening its first Canadian Uniqlo store in Toronto. The retail industry in Canada had notably rejected foreign brands such as Target and Aeropostale, while other Canadian retailers, such as Reitmans Ltd. and Le Chateau were struggling to keep up with the competitive landscape. Uniqlo, a Japanese fashion retailer, had struggled in the U.S. market due to a lack of brand awareness and an aggressive expansion strategy. Hoping to become a dominant fashion brand in Canada, Uniqlo conducted extensive research prior to entering the Canadian market. How could Uniqlo increase its brand awareness and thrive in the Canadian fashion market? Won-Yong Oh is affiliated with University of Nevada, Las Vegas.
Authors :: Won Yong Oh, Seok-Woo Kwon, Brooke Miskiman
Swot Analysis of "Uniqlo: Expansion into Canada" written by Won Yong Oh, Seok-Woo Kwon, Brooke Miskiman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Uniqlo Canadian facing as an external strategic factors. Some of the topics covered in Uniqlo: Expansion into Canada case study are - Strategic Management Strategies, Negotiations and Global Business.
Some of the macro environment factors that can be used to understand the Uniqlo: Expansion into Canada casestudy better are - – increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing household debt because of falling income levels, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing energy prices, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Uniqlo: Expansion into Canada
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Uniqlo: Expansion into Canada case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Uniqlo Canadian, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Uniqlo Canadian 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: Expansion into Canada can be done for the following purposes –
1. Strategic planning using facts provided in Uniqlo: Expansion into Canada case study
2. Improving business portfolio management of Uniqlo Canadian
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 Canadian
Strengths Uniqlo: Expansion into Canada | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Uniqlo Canadian in Uniqlo: Expansion into Canada Harvard Business Review case study are -
Sustainable margins compare to other players in Global Business industry
– Uniqlo: Expansion into Canada firm has clearly differentiated products in the market place. This has enabled Uniqlo Canadian to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Uniqlo Canadian to invest into research and development (R&D) and innovation.
Strong track record of project management
– Uniqlo Canadian is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Uniqlo Canadian is one of the most innovative firm in sector. Manager in Uniqlo: Expansion into Canada Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Uniqlo Canadian is one of the leading recruiters in the industry. Managers in the Uniqlo: Expansion into Canada are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Uniqlo Canadian is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Won Yong Oh, Seok-Woo Kwon, Brooke Miskiman can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Uniqlo Canadian 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.
Superior customer experience
– The customer experience strategy of Uniqlo Canadian in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Uniqlo Canadian in the sector have low bargaining power. Uniqlo: Expansion into Canada has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Uniqlo Canadian to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Uniqlo Canadian has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Uniqlo: Expansion into Canada - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Uniqlo Canadian 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.
Highly skilled collaborators
– Uniqlo Canadian has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Uniqlo: Expansion into Canada HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Uniqlo Canadian digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Uniqlo Canadian has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Uniqlo: Expansion into Canada | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Uniqlo: Expansion into Canada are -
Skills based hiring
– The stress on hiring functional specialists at Uniqlo Canadian has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Low market penetration in new markets
– Outside its home market of Uniqlo Canadian, firm in the HBR case study Uniqlo: Expansion into Canada needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Uniqlo Canadian has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Need for greater diversity
– Uniqlo Canadian 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.
Slow decision making process
– As mentioned earlier in the report, Uniqlo Canadian 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 Canadian 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Uniqlo: Expansion into Canada, it seems that the employees of Uniqlo Canadian don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Uniqlo Canadian is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Uniqlo: Expansion into Canada can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Uniqlo: Expansion into Canada HBR case study mentions - Uniqlo Canadian takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Uniqlo Canadian supply chain. Even after few cautionary changes mentioned in the HBR case study - Uniqlo: Expansion into Canada, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Uniqlo Canadian vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Uniqlo: Expansion into Canada, in the dynamic environment Uniqlo Canadian has struggled to respond to the nimble upstart competition. Uniqlo Canadian has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Uniqlo Canadian 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: Expansion into Canada should strive to include more intangible value offerings along with its core products and services.
Opportunities Uniqlo: Expansion into Canada | 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: Expansion into Canada are -
Manufacturing automation
– Uniqlo Canadian 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Uniqlo Canadian in the consumer business. Now Uniqlo Canadian can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Uniqlo Canadian can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Uniqlo Canadian 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.
Developing new processes and practices
– Uniqlo Canadian 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.
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 Canadian 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 Canadian 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.
Building a culture of innovation
– managers at Uniqlo Canadian can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Uniqlo Canadian is facing challenges because of the dominance of functional experts in the organization. Uniqlo: Expansion into Canada 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Uniqlo Canadian to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Uniqlo Canadian to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Uniqlo Canadian 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: Expansion into Canada, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Canadian can use these opportunities to build new business models that can help the communities that Uniqlo Canadian operates in. Secondly it can use opportunities from government spending in Global Business sector.
Buying journey improvements
– Uniqlo Canadian can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Uniqlo: Expansion into Canada suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Uniqlo: Expansion into Canada External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Uniqlo: Expansion into Canada are -
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Uniqlo Canadian can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Uniqlo Canadian has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Uniqlo Canadian needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Uniqlo Canadian in the Global Business sector and impact the bottomline of the organization.
Increasing wage structure of Uniqlo Canadian
– 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 Canadian.
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.
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 Canadian needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Uniqlo Canadian 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.
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 Canadian business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Uniqlo Canadian 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 Canadian 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 Canadian is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Uniqlo Canadian 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.
Stagnating economy with rate increase
– Uniqlo Canadian can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Regulatory challenges
– Uniqlo Canadian 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.
Weighted SWOT Analysis of Uniqlo: Expansion into Canada 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: Expansion into Canada 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: Expansion into Canada 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: Expansion into Canada 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: Expansion into Canada 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 Canadian needs to make to build a sustainable competitive advantage.