Uniqlo SWOT Analysis Analyzes, Uniqlo is one of the Japanese style brands with a worldwide following. Uniqlo which is a wholly own subsidiary company of the Fast Retailing Co Ltd is a leading brand in casual clothes. While Uniqlo is a well-known brand that sells low-cost clothing in Asia the brand has yet to expand into other regions of the world however they have made their mark in the region. Uniqlo was founded by Japan in the 1940s, initially as an apparel brand for men. It was around the 1980s that it began growing into a major name in Japan and then the company expanded into women’s clothing and other clothing categories.
Did You Know?
Uniqlo’s name comes from the words “Unique Clothing,” which throws back to the company’s original name, “Unique Clothing Warehouse.”
Uniqlo has been quick to adjust to new cultures without losing the company’s Japanese value system and is well-known for the unique style and unique designs for casual clothing. As of 2018, Uniqlo has a network of 13000 stores that span 20 countries across Europe, Asai Pacific and America.
This can only be achieved through a firm with extensive knowledge, experience and innovative strategies. To determine the strengths of the company potential, weaknesses, opportunities and threats, it is necessary to conduct a SWOT analysis by Uniqlo.
Uniqlo At A Glance – Uniqlo SWOT Analysis
Company: Fast Retailing Co.
Founders: Tadashi Yanai
Year of establishment: March 1949, Ube, Yamaguchi, Japan
CEO: Tadashi Yanai
Headquarters: Yamaguchi, Yamaguchi, Japan
Employees (Dec 2020): 30,000
Ticker Symbol: FRCOY
Type: Public
Annual Revenue (Dec 2020): ¥Yen873 Billion
Profit net income (Dec 2020): ¥Yen104.6 Billion
Products & Services: T-shirts | Jeans | Casual wear
Company Website: www.uniqlo.com
Top Uniqlo Competitors
Competitors: H&M | American Eagle Outfitters | GAP | ZARA | Forever 21 | Topshop | Pull & Bear | River Island | rue21 | Primark
Uniqlo SWOT Analysis – SWOT Analysis Of Uniqlo
SWOT Analysis Of Uniqlo analyzes the brand based on its strengths weak points, weaknesses, opportunities, and threats. With Uniqlo SWOT Analysis it is clear that the advantages and disadvantages are internal factors, while threats and opportunities are external elements. Here we are going to talk about Uniqlo SWOT Analysis. Below Is The Detailed SWOT Analysis Of Uniqlo.
Uniqlo Strengths – Uniqlo SWOT Analysis
- Superb Performance in New Markets – UNIQLO has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
- Automation of activities brought consistency of quality to UNIQLO products and has enabled the company to scale up and scale down based on the demand conditions in the market.
- Successful track record of developing new products – product innovation.
- Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
- Good Returns on Capital Expenditure – UNIQLO is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
- Strong distribution network – Over the years UNIQLO has built a reliable distribution network that can reach majority of its potential market.
- Strong Brand Portfolio – Over the years UNIQLO has invested in building a strong brand portfolio. The SWOT analysis of UNIQLO just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
- Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
Uniqlo Weaknesses – Uniqlo SWOT Analysis
- Not highly successful at integrating firms with different work culture. As mentioned earlier even though UNIQLO is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
- The profitability ratio and Net Contribution % of UNIQLO are below the industry average.
- High attrition rate in work force – compare to other organizations in the industry UNIQLO has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
- Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of UNIQLO
- Limited success outside core business – Even though UNIQLO is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
- There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
- Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, UNIQLO needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
Uniqlo Opportunities – Uniqlo SWOT Analysis
- The new technology provides an opportunity to UNIQLO to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
- Decreasing cost of transportation because of lower shipping prices can also bring down the cost of UNIQLO’s products thus providing an opportunity to the company – either to boost its profitability or pass on the benefits to the customers to gain market share.
- Government green drive also opens an opportunity for procurement of UNIQLO products by the state as well as federal government contractors.
- Organization’s core competencies can be a success in similar other products field. A comparative example could be – GE healthcare research helped it in developing better Oil drilling machines.
- The market development will lead to dilution of competitor’s advantage and enable UNIQLO to increase its competitiveness compare to the other competitors.
- Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided UNIQLO an opportunity to enter a new emerging market.
- Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for UNIQLO in other product categories.
- Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of UNIQLO.
Uniqlo Threats – Uniqlo SWOT Analysis
- Not highly successful at integrating firms with different work culture. As mentioned earlier even though UNIQLO is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
- The profitability ratio and Net Contribution % of UNIQLO are below the industry average.
- High attrition rate in work force – compare to other organizations in the industry UNIQLO has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
- Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of UNIQLO
- Limited success outside core business – Even though UNIQLO is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
- There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
- Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, UNIQLO needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
Uniqlo SWOT Analysis Template
This is the SWOT report that Uniqlo has done. Please let us know if you have additional suggestions to add.
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