Supermarket Diversification and Consumer Resistance - Free Samples

Queston: Discuss about the Supermarket Diversification and Consumer Resistance. Answer: Introduction: Tadashi Yanai, CEO and founder of Uniqlo, grew up in the retail clothing industry. He was born in 1949 to a suit shop owner in Yamaguchi, Japan, and eventually his father is having a chain of 22 stores where he became president in 1984. When he took over the presidency, he opened a store called Unique Clothing Warehouse, which was later summarized to "Uniqlo," in Hiroshima. In the beginning Uniqlo was a typical multi-brand shop having Nike, Adidas, and other foreign brands. Uniqlo Co., Ltd. is a well known Japanese casual wear designer, manufacturer and retailer. This company operates especially in Japan and many other countries and it has been wholly owned subsidiary of Fast Retailing Co. Ltd. From the research we have found out the whole process about how it begins and make its journey the most successful one. In order to guide the company through the realization of this strategy they engaged the retail brand consultancy, The Brand Architect Group, including consultation on merchandise, visual merchandising and demonstration, store design and a new logo designed by Richard Seireeni and Sy Chen of The Brand Architect Group's Los Angeles office. China has availability of cheap labourers, so Uniqlo had begun outsourcing their clothing manufacturing to factories in China and it proved a well-established corporate practice. In the beginning Japan was in the depths of recession, but because of low-cost its goods became popular. Apart from that the clothing quality, new retail layouts and their advertising campaigns also proved fruitful. In November 1998, their first urban Uniqlo store was opened in Tokyo's trendy Harajuku district, and its outlets quickly spread to major cities all over Japan. In 2001, both sales turnover and gross profit reached a new peak, with over 500 retail stores in Japan. Uniqlo separates from the parent company when it has decided to expand overseas, and established Fast Retailing (Jiangsu) Apparel Co., Ltd. in China. In 2002 their first Chinese Uniqlo outlet was opened in Shanghai alongside four overseas outlets in London, England. In creating its clothing lines, Uniqlo embraces shun and kino-bi both. Shun means 'timing, best timing, but also at the same time its about trend, something that should be updated and just in time, neither early nor late. Kino-bi means utility and beauty, which if joined together means that the clothing should be presented in an organized and rational manner, and that incredibly organization and rationality creates an artistic prototype and rhythm. These virtues reflects the features of modern Japanese traditions, modern 'Japaneseness.' In 2005 overseas expansion takes place, with stores opening in the United States (New York City), Hong Kong (Tsim Sha Tsui) and South Korea (Seoul), their South Korean expansion being part of a joint venture with Lotte. As year 2005 comes to an end, Uniqlo had around 700 stores within Japan along with its overseas holdings. A design consulting contract for Uniqlo products is signed by Fast Retailing with fashion designer Jil Sander in March 2009. On September 2, 2009, Fast Retailing Co., Ltd. pre-tax profit from operations of 1 trillion yen and announced that the company would target annual group sales of 5 trillion yen by 2020. This indicates that the company is aiming to become the world's biggest Specialty retailer of Private label Apparel with a nonstop growth rate of 20% per year. The number breaks down as one trillion yen from Uniqlo's Japan business, three trillion yen from its international business, and one trillion yen from "Japan-related and global brand business. The company's international business target breaks down as one trillion yen in Europe, one trillion in other Asian countries and one trillion in China and the United States. Uniqlo offers very high quality products at reasonable prices for a huge target customer base and its value offer reflected in the companys dictum Made for all. Its main aim is to maintain the companys competitive advantage while driving towards this goal and hence it seriously works on its management structure and its cost control and production processes. Uniqlo has focused on using their technology and cost in most efficient manner and making its clothing unique to the customer. Though a solid start, Uniqlos recent success in the US market is only one step away from its goal of being the number one apparel company in the world by 2020. Although Uniqlo executives consider that the US is decisive in accomplishment this objective and that they must be number one in the US market which helps them to become global number one. In pursuit of this, the company has set the standard of attaining a market share of $10 billion USD in the United States and $50 billion USD worldwide by 2020. The companys whole success and expansion, based on its unique business model and its initiatives to create a distinctive brand name, has been irresistible, Uniqlo still faces major challenges as it aims to achieve its 2020 goal. The companys success depends on its performance in the North America market, and especially in the US market. And it is particularly this market that accentuates the most significant challenges Uniqlo has to deal with. Number of Uniqlo stores: FY 2014 2013 Unit stores End August Open Close Eng August UNIQLO JAPAN: 852 54 55 853 Directly Operated 831 51 54 834 Large-scale 199 26 4 177 Standard 632 25 50 657 Franchise 21 3 1 19 UNIQLO International: 633 193 6 446 China 306 83 2 225 Hong Kong 22 5 1 18 Taiwan 46 9 0 37 South Korea 133 31 3 105 Singapore 18 6 0 12 Malaysia 21 11 0 10 Thailand 20 10 0 10 The Philippines 16 10 0 6 Indonesia 4 3 0 1 Australia 1 1 0 0 U.S. 25 18 0 7 U.K. 10 0 0 10 France 6 3 0 3 Russia 4 2 0 2 Germany 1 1 0 0 Global Brands: 1268 152 34 1150 Miscellaneous 1485 247 61 1299 Total 2753 399 95 2449 Terminologies: FY Financial year CEO Chief Executive Officer: it is the highest grade executive in a company, their main activities includes making important corporate decisions, managing overall working of the company and acting as an intermediate between the board of directors and corporate operations. Multi Brand Shop It refers to a company which operates the store shops of multiple brands belongs to various manufacturers. Recession A period of economic decline, it is temporary in nature. Outsourcing It is a business practice in which tasks are performed by another company or an individual hired by the company. Gross profit Profit of the company which is computed by taking direct income and expenses of the company Parent Company The company that controls management and operation and that owns enough voting rights to influence board of directors. References Liu, S. C., Choi, T. M. (2009). Consumer attitudes towards brand extensions of designer-labels and mass-market labels in Hong Kong. Journal of Fashion Marketing and Management: An International Journal. Burt, S., Dawson, J., Sparks, L. (2003). Failure in international retailing: research propositions. The International Review of Retail, Distribution and Consumer Research. de Kervenoael, R., Canning, C., Palmer, M., Hallsworth, A. (2011). Challenging market conventions: Supermarket diversification and consumer resistance in children's apparel purchases. Journal of Fashion Marketing and Management: An International Journal.