UNIQLO is one of the clothing line under the business Fast Retailing Co., Ltd. that was established in May 1 of 1963 with head office in Yamaguchi, Japan. However, the first UNIQLO was only opened in Japan in 1984 as a suburban roadside store. In 1998, urban stores were eventually opened. When UNIQLO began growing beyond the management’s expectation, Fast Retailing Co., Ltd finally agreed to open out in famous shopping malls Ginza, Shinjuku and Osaka. UNIQLO was classified as a Specialty-store retailer of Private-label Apparel (SPA), which nearly accounts of the largest clothing line in Japan.
In 2001, the first international store was opened in UK. Again, UNIQLO was a success. At present, there are 446 international outlets of UNIQLO and 853 local stores in Japan. 27% of the brand’s sales are generated from it’s international outlets located worldwide. Expanding in the US is among the plans of the company that is already well on its way. UNIQLO is known for offering high-quality casual apparels at a very reasonable rate.
Strengths and Weaknesses if Leadership in the Organization
UNIQLO is known for two major strengths that are a product of careful review and aggressive deliberation. First, UNIQLO seeks for the best raw materials available. And second, UNIQLO creates their own demand by introducing innovative and functional features. The company is not willing to compromise quality for savings or profit. The management ensures that customers get what they want when they come into any UNIQLO store worldwide and after they leave. The company wants the customer to remember that they are wearing something from UNIQLO as they experience the comfort and style of sporting one of UNIQLO’s wide and dynamic product portfolio. Another thing that UNIQLO is proud of is their highly skilled R&D team. In effect, this creative team forms designs that are new, upbeat and functional. Because of this, UNIQLO clothes create their own market.
The only thing that UNIQLO considers an issue is the weakening of several currencies in Asia specially Japan. Due to the weakening of the Yen, the purchasing power of the Yen also weakens. Unfortunately, the value of the money is the only thing that weakens, but the cost of raw materials including labour continues to increase.
Theories on Planning and Management
UNIQLO operates using the Specialty store retailer of Private label Apparel (SPA) model. This business model thrives in the idea that every private label are housed in one specialty store in which all the stages of business are enclosed beginning from design, product development until it reaches the hands of the customer.
Leadership: On Planning and Management Strategy
UNIQLO’s business strategy operates within the framework of McKinsey’s 7’s Framework. This renowned business management model in which the goal is to constantly monitor the processes and changes in the internal structure of the organization. In this case, UNIQLO are as follow:
In addition, UNIQLO has three-transformation plan that would improve their performance. These include (a) the network transformation plan, (b) IT transformation, and (c) cultural and employee transformation plan. These transformation plans were UNIQLO strategy to further enhance their services and deliver quality service to its customers.
UNIQLO adapts a vertical functional organizational structure. This model is defined as the grouping of positions into departments based on similar skills, expertise, work activities, and resource use. For every department, there are specific resources that each needs to represent particularly in performing the task assigned to them.
The advantages of using this model have something to do with the efficient use of the company’s resources, the allocation of specialized skills into the hierarchy of the leadership ladder and the opportunity for the top management to oversee the business operation and impose control. However, this structure may also be the culprit for the existing problems encountered by the company. One of this is the poor communication pattern across every department. As a result, this creates delays that affect the decision making and innovative changes for the company.
UNIQLO enforces several monitoring system to check the performance of the business. One of this is the Employee Satisfaction Index. This measures the employees’ level of satisfaction in terms of working at UNIQLO. Included in the areas that it checks relates to company policies, salaries and compensation. Other indicators are key performance matrices used to monitor and track the company’s financial performance like profitability ratios and net revenue.
UNIQLO’s core values are identified in the company’s mission, vision, and values statement. Specifically, UNIQLO’s values are centered on integrity and its stakeholders. The company now embraces it latest slogan that identifies the unique culture in the company, that it the Circle of Happiness. This culture believes that to create happy customers that will bring rewarding benefits for the company, is to start from within. Thus, UNIQLO makes sure that their employees are well taken cared of.
UNIQLO encourages active participation from their employees. They welcome feedback and recommendations from their employees. It allows its employees and middle managers to contribute to the company by being open and including them in enhancement and development programs. In addition, UNIQLO also allows their middle managers to grow by enrolling them academic programs that would further their technical and managerial skills.
As part of the Talent and Cultural transformation, the Human Resource Department focuses on three core agendas: (a) leadership and talent development, (b) performance management and rewards and (c) employee engagement. This has been designed to address the Company’s objective of enhancing and developing the talent pool and instill the culture of UNIQLO to its employees.
UNIQLO’s 5,800 employees are well diversified. Employees had been carefully selected from the large pool of applicants, and they are well positioned in areas where their skills and knowledge can best be utilized. UNIQLO makes sure that they attract the right people by offering competitive salary and a conducive working environment.
The company is known for developing people-oriented programs and campaigns. In addition, the technical expertise of the workforce contributes to the development and improved services provided by the Company.
UNIQLO is a highly competitive company with a strong customer base resource. The Company has taken a strong advantage of being in the forefront of major technological advances and developments. It has additional reinforced its managerial pool by encouraging and supporting the continuous training of its management staffs. To further motivate and encourage its people to contribute to the productivity of the Company, UNIQLO has been generous in terms of giving highly competitive salaries, as well as comprehensive benefits to its employees. Overall, UNIQLO can rely on it strong brand name that creates loyal customers that serve as additional promotion and marketing avenue for the Company.
On the other hand, the Company should address its identified key weaknesses. For quite some sometimes, UNIQLO has been silent on the aggressive advertising campaigns of its key competitors. It is high time that the Company starts addressing the issue. Although the Company’s culture had been very positive and upbeat, UNIQLO can start capitalizing on massive promotions that will highlight the strengths of the Company to compensate for the negative publicity being hurdled against them. In addition, the Company should also try to strengthen its advertising and promotional strategy because majority of clothing companies are unaware of the other services that UNIQLO is offering. UNIQLO needs to be able to manage its finances because of the massive debts that the Company current shoulders. Although there is an expected promising reward for this, the return of investment is quite long. This would however improve the services of the Company, but UNIQLO must still emphasize this to the customers to further increase the market. Again, it all boils down to a good marketing and promotional strategy.
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UNIQLO Business Strategy. http://www.fastretailing.com/eng/group/strategy/tactics.html
Overview of Business Segment. http://www.fastretailing.com/eng/about/business/segment.html