Uniqlo Case Study 4 (revised).docx – MGMT 3006 PROF. FARHAN ZAIDI CASE STUDY 4: UNIQLO: RE-EXAMINING AMERICAN EXPANSION Prepared by: Kim Vy Nguyen – | Course Hero

1.

Why was Uniqlo so successful in Japan?

Uniqlo started with one store in Hiroshima, Japan. Then in the year 1984, Uniqlo has grown to

over 1300 stores in 15 countries. According to the case, Fast Retailing, Uniqlo’s parent company,

had a double-digit market share in Japan. Yanai estimated the total Japanese market size to be

about ¥10 trillion and Uniqlo’s 2016 domestic sales were about ¥800 billion, giving roughly 8

per cent market share for Uniqlo alone. For 2015, the case states that Gap brands altogether held

a 4.4 per cent market share in the United States; Nike, Inc. 2.7, per cent; Forever 21, 1.3 per cent;

and H&M, 1.0 per cent. So, Uniqlo’s market share in Japan was impressively high.

Their customer promise has remained the same to provide high-quality, innovative, and

functional clothing at affordable prices. Uniqlo’s product development cycle is more similar to

technology companies.

Uniqlo’s year-long process is needed to research, source and test new

fabrics, and then negotiate with vendors to place cost-efficient high-volume orders. Uniqlo

offered basic casualwear at a reasonable price and started to rise as Japan entered into a deep,

long recession. In the midst of this recession, Uniqlo offered an impressive value proposition.

Uniqlo grew because it offered the quality Japanese customers demanded but at much lower

prices than its competitors. Uniqlo then deploys takumi, or textile “masters,” to production floors

to ensure quality dyeing and sewing, a testament to its emphasis on fabric innovation and quality

over trendiness. Therefore, while innovative on textiles, they offer a limited variety of styles but

in a high variety of colors.

However, there is more to hit the high market share when Uniqlo just simply offering low prices

during a recession. It is argued that the market space that Uniqlo had developed was relatively

empty, which means reasonably priced casual clothing sold through low-cost, self-service retail

locations. Competitor Shimamura was also in this market space and reached the rapid growth.