Japan’s Fast Retailing Co. plans to dramatically increase its number of Uniqlo stores in China and to expand into India and Brazil. Uniqlo aims to add over 900 stores in China during the next decade. Unlike other fast-fashion retailers such as Zara and H & M which focus on selling trendy items, Uniqlo focuses on selling well-made basic essentials such as tee-shirts, jeans, socks and underwear that last more than one season. Fast Retailing’s corporate culture is also different from its fellow Japanese firms with an emphasis on promoting a global workforce. English is the language used in meetings whenever foreigners are present and by 2012 all email correspondence will be written in English. For its continued expansion into the United States, Uniqlo is adjusting its strategy. It closed the stores it opened in suburban shopping malls and it currently only has one store in Manhattan’s SoHo neighborhood. Uniqlo plans to launch an online shopping site and to open a flagship store on New York’s Fifth Avenue to foster brand awareness in the States.
QUESTIONS FOR DISCUSSION:
- For its expansion into the United States, Fast Retailing is considering options for acquisitions. What would be the advantages and disadvantages of expanding in the United States via acquisition versus expanding alone with new stores?
- Will Uniqlo’s cost leadership business-level strategy continue to be appropriate as economies begin to recover from the current economic downturn? In the United States, do you think that as the economy recovers consumers will focus on purchasing timeless low-cost basics or will they focus on buying low-cost trendy items that may be only in fashion one season?
- Uniqlo aims to enter the Indian market within the next five years. Current government regulations dictate that a foreign retailer can only enter India as a minority stakeholder with a local partner. Would it be advantageous for Uniqlo to enter India now with a partner to achieve first-mover advantages ahead of its nimble international rivals or wait until current government restrictions on foreign ownership change?
- In order to effectively pursue its international expansion plans, Uniqlo will need leaders with the know-how and language skills required for successful global expansion. What could Uniqlo do to create the talent pool it will need for its expansion goals?
SOURCE: Sanchanta, M. (2010, December 19). Uniqlo makes global push. Wall Street Journal Online. (Retrievable online at: http://online.wsj.com/article/SB10001424052748704368004576028453572446140.html)
Related video clip from November 5, 2010 available at: http://www.youtube.com/watch?v=SCOJcDvbPeo
World Business: Uniqlo Profile
Related video clip from December 9, 2010 available at: http://www.bloomberg.com/video/65138420/
Uniqlo’s Odake Interview on U.S. Growth