THUONGMAI UNIVERSITY

DISCUSSION REPORT
STRATEGIC MANAGEMENT

TOPIC

Strategic analysis of the business

Class : 23114SMGM0111E

Group : 5

Teacher : Võ Hạnh Quyên

I. BUSINESS INTRODUCTION 

 Uniqlo Co., Ltd. is a Japanese casual wear design, apparel, and retail company.
Originally a division of Fast Retailing, Uniqlo became a subsidiary in November
2005 and was listed in the first class of the Tokyo Stock Exchange. The fashion,
quality, and value of Uniqlo carry on their own the qualities of Japanese Industrial
culture, civilized and sophisticated. The decisive factor in the "unique" of the
brand name is the perfectionism in the growth and completion of new materials,
with common properties such as heat retention, helping to maintain skin
temperature, antibacterial, High elasticity and thinness, cooling, and quick drying.

 In addition to Japan, Uniqlo also operates in China, Hong Kong, Taiwan, France,
Malaysia, Bangladesh, Philippines, Russia, Singapore, Korea, Thailand, United
Kingdom, USA, Indonesia, India, and Vietnam. Uniqlo opened its first store in
Vietnam on October 2, 2018, under the name UNIQLO VIETNAM CO., LTD. In
addition to the first store, the company also plans to open more stores in Ho Chi
Minh City before expanding to other provinces in Vietnam.
Vision
 To become the number 1 clothes retailer in the world.  They truly believe that this
dream can be achieved by providing the best customer service experience on the
high street. Uniqlo’s business is and has always been, customer-driven, and
customer-first. Products, stores, services, people, management. Everything they do
centers around the individual who wears the clothes.
Mission
 Uniqlo (Fast Retailing Group) has adopted a new sustainability mission statement,
"Unlocking the Power of Clothing". With a focus on products, supply chains,
employees, stores, and communities, we will change the world for the better
through our business. 
II.  EXTERNAL ENVIRONMENT ANALYSIS 
1.  Political    
  The political environment makes a difference in the environment and conditions
of fashion development in each country. When businesses enter the fashion
market, they often focus on carefully studying the legal system and policies of that
country to build an appropriate business plan. 
  The political environment of countries reflects the country's ability to develop the
fashion industry, including domestic and foreign policies. Policies to encourage
import and export or combine with foreign investment sources to help develop the
domestic fashion industry. The government has the ability to encourage companies
to buy fabrics locally, especially if the taxation on imports from other countries
increases 
  We can see some examples of politics that have a great impact on the fashion
industry, especially here are the free agreements signed between countries.  For
example, the Regional Comprehensive Economic Partnership (RCEP) is opening
up new export opportunities, such as with Japan, China, and India, thereby saving
costs and making supply chain processes more flexible. Free trade agreements with
other countries can help Vietnam's textile and garment industry attract new global
brands. 
 
2.  Economy 
The economy has an important influence on the fashion industry 
  Economic growth rate 
 During periods of economic growth, people have higher incomes. They have a
higher demand for clothes and are willing to pay more to buy clothes from high-
fashion brands. This helps increase revenue for fashion brands. Meanwhile, when
the economy slows down (during the period of covid 19), consumers reduce
spending on fashion items and create greater competition among firms in the
industry 

   Monetary policy and exchange rate 

 This factor can be a good opportunity or it can also be a risk for fashion brands. It
can affect the adjustment of import-export relations. Exporting fashion brands will
be more profitable when the exchange rate between VND and other currencies in
the world is high and vice versa. For example, in recent times, the falling euro may
reduce profits for domestic fashion companies that want to export goods to Europe
such as  May 10, but it is beneficial for firms that import materials from abroad. 

  Inflationary
 Due to the epidemic, the supply chain of fashion materials is disrupted, and fewer
clothes are produced, so the brands increase the price of clothes. When consumers'
income does not increase but the price of the product increases, they will tend to
shop less 

  Tax  
 The change in the tax system or tax rate is also an issue that fashion businesses
need to pay attention to. It can change the level of expenses or income of the
business
3. Social
 Social culture has a significant impact on the fashion industry and fashion
businesses. Vietnamese people's fashion consumption is divided into three major
groups: those who follow fashion trends (33.9%), those who care about fashion -
know how to be beautiful (33.6%), and those who only shop when necessary
(32.5%). 

At the age of 23 to 29 years old, the trend-following and fashion-conscious groups

know how to make beauty a major focus. Meanwhile, the 30-39 age group is
dominated by those who only buy when absolutely necessary. Comment on
Generation Z and late-Millennials are generations of young people who enjoy
flaunting and asserting themselves through social networking platforms. Young
people in this class have witnessed the rapid growth of Facebook, Instagram,
Tiktok, and Snapchat. 

This generation is oriented and instilled with strong ideas of sustainable fashion,
environmental protection, and climate change due to the need to express
themselves through fashion. This has a significant impact on their decision to
purchase fashion products because they are the generation with the most sway over
the current fashion industry. 

 User requirements are more minimal than previously.

 In recent years, the Vietnamese fashion market has witnessed the arrival of global
fashion brands and received numerous positive business results. The ability to
provide customers with access to the latest designs at reasonable prices has
contributed to the appeal of "fast fashion" among Vietnamese consumers. The
short life cycle of these "fast fashion" items, however, has had a negative impact
on the environment, people, and resources.
 Meanwhile, sustainable fashion - providing, producing, and consuming fashion
products that ensure environmental, social, and economic sustainability - is
expected to be an unavoidable trend as Vietnamese people's incomes gradually
improve and young people's sense of responsibility for fashion and the
environment grows. In the future, the fashion industry will place a greater
emphasis on sustainability, including materials derived from environmentally
friendly sources, recycled materials, and less use of chemicals; the manufacturing
process will ensure factors such as energy savings, labor welfare, and safety. 
 Consumer preference for imported goods 
 Foreign students' psychology is one of the majority of Vietnamese people's social
realities. Vietnamese people believe that only foreign goods are committed to
quality, and that only foreign goods are good. Even if foreign goods are two or
three times more expensive, consumers still prefer to buy more domestic goods.
The same is true for fashion items. This has a direct impact on the market share of
domestic fashion brands.   

 The popularity of influencer marketing 

 In recent years, influencer marketing has gradually become the most invested
media of fashion brands. Facebook, YouTube, Instagram, TikTok, and other social
media platforms are popular places for KOLs to introduce new brands and designs.
Furthermore, KOLs serve as brand ambassadors in lookbooks and promotional
videos.
 Brands frequently select influencers who have a following that is relevant to the
brand's target audience. Today's famous fashion KOLs in Vietnam include Chau
Bui, Decao, Son Tung MTP, and others. 

   The emergence of video content 

 With the rise of e-commerce, video content of fashion products or viral fashion
trends is becoming increasingly popular and is expected to take over social media.
Whether it's short videos like those on TikTok or Facebook/Instagram stories or
longer videos like those on YouTube, video content will clearly demonstrate its
superiority in the future. According to Cisco research, by 2022, approximately
82% of online content will be in the form of video.
Furthermore, Livestream is demonstrating its utility in promoting sales for fashion
brands. Many large-scale shopping events are being streamed live, and this is
becoming more common.

The online shopping culture is becoming increasingly popular. 

 Previously, people only preferred traditional forms of purchase due to the risk that
the product received was not the same as the photo, the loss of the goods, the
difficulty in exchange and return, and so on.
Customers, especially when it comes to fashion items, have the mentality of going
to the store to try them on and then buying. Consumers have become more reliant
on online shopping channels in recent years. Furthermore, Covid-19 is the driving
force behind the online fashion shopping trend. People have formed the habit of
online shopping to limit the spread of the disease due to social distancing and
restrictions on large crowd gatherings.  Therefore, fashion brands have built a more
convenient and attractive online shopping channel, improved quality management
on e-commerce sites, as well as stricter regulations on product images and
descriptions, which boosts consumer trust in online clothing. 
 
4.  Environment 
 Fashion becomes a "victim" of climate change. The source of raw materials like
cowhide sheepskin is getting less and less. Environmental pollution and climate
change such as droughts, warming, and water scarcity, can affect the production of
cotton crops. This causes business disruptions and increased production costs. 
Under the pressure of animal protection organizations and the trend of "green"
products to the throne, fashion companies are having to invest and develop
environmentally friendly man-made materials to replace scarce materials to supply
enough for consumers.
 Natural conditions such as the Covid-19 epidemic or storms and floods severely
affect the fashion industry.During the epidemic, factories that physical stores have
to close down, reducing consumer demand, reducing the revenue of the entire
fashion industry. Natural disasters can also affect the transportation of goods by air
or by sea 

5. Technology   
 Developed technology shortens the time from design to production and
distribution. AI will come up with algorithms to recommend products that  match
customer needs.Using machines to increase productivity during production and
packaging .3D printing technology contributes to promoting production, reducing
costs and production time of products significantly .Easily  perform complex
shapes and patterns that make a breakthrough in the fashion industry  

 Improve shopping experience as well as satisfying customer needs .Online

shopping is more and more popular because it saves time for consumers, especially
during the Covid-19 period .Customers can try on clothes with virtual reality
glasses to customize their measurements to fit, saving time and money on
shopping. 

 Expanding business reaches more customers. Use social networking sites or e-

commerce platforms to run ads and sell.  

6. Legal 
 The fashion industry is a multi-trillion-dollar industry that needs skillful legal
protection to ensure its harmonious existence. 
Intellectual property laws protect brands and prevent plagiarism 
 Intellectual property law protects fashion designs, which fall under the category of
“artwork” which includes paintings, sculptures, drawings, sketches, and patterns
for clothing, apparel, and accessories. . Since the images above the canvas are also
protected as artwork. 
+Trademark Law protects brand names and symbols used on goods and services,
to distinguish them from other goods and services. 
- Protects consumers by helping to ensure that they receive genuine items from
suppliers they trust. 
-Branding is extremely important for fashion brands and designers that add
significant value to goods. 
For example, 2 stores of imitation Hermes fashion brand at 38 Hang Bong and No.
4 Dien Bien Phu are as follows. These two stores have the act of selling products
with the signs "HERMÈS", "HERMÈS & pic", and "H & pic" identical to the
trademarks "HERMÈS", "HERMÈS & pic", "H & pic" is protected. households in
Vietnam. For this violation, the store in Hang Bong was fined 20 million dongs
and collected organs including 25 bags, 11 wallets, 2 key chains, 2 belts, and 3
bracelets. 
+ Copyright law  
- Protection of copyrighted products. 
- Does not protect embossed or fabric-printed designs. 
-Protect one designer's clothing design sketches, but do not prevent others from
creating and selling clothing similar to those sketches.  

 Environmental protection laws limit the waste that the fashion industry
generates 
 The fast fashion industry is the world's second-largest water consumer and
manufacturing accounts for 8-10% of carbon emissions. The industry ranks in the
list of 10 industries that destroy the environment.  Fast fashion model: Produce
according to the trend => When the trend ends, it will be thrown away => Large
amounts of waste cannot be destroyed. The laws require businesses to treat
wastewater, collect and classify solid waste, and reduce and treat emissions into
the environment. When not meeting the requirements to avoid environmental
pollution, businesses will be fined according to the prescribed levels   

Labor law protects the rights of workers in the fashion industry 

 In addition to the technology industry, the fashion industry is a "great funnel" that
exploits more labor than any other industry .Fast fashion develops, brands have to
compete with each other to increase production.Fashion firms must increase their
workforce, they will go through the company providing labor resources. 
 The problem comes when many human trafficking organizations "disguised" as
labor supply companies have taken advantage of the cooperation program to work
abroad to lure children and people who want the opportunity to earn income. In
foreign countries, workers have to sign a contract with the employer for a long
time, cannot change jobs because their papers and wages are kept, and suffer harsh
exploitation. According to the Labor Code 2019, the working age of men is from
15 years old to 60 years old 09 months; the Working-age of women is from 15
years old to 56 years old. The fine levels are determined by the liability to pay
administrative violations. Based on the number of exploited workers, the fines also
increase.  In many places, the law requires large enterprises to disclose specific
information, policies, and wages to workers in order to avoid labor abuse and have
appropriate penalties. 

III.   INDUSTRY ENVIRONMENT       

 1. Competitive Rivalry
 After competing with giants like Zara, H&M, Forever 21, etc Uniqlo has gained
specific recognition in the market, ranking third behind Zara and H&M. Two
companies have been in the industry for a long time, have a significant market
share, and are taking advantage of economies of scale, creating stiff competition
for market share. Because of that  Uniqlo's market share declined. Uniqlo carries a
simple product design, not too many shapes, and many styles like H&M and Zara,
so it has not yet attracted many Genz customers, but this is an era when it is
imperative for businesses to grasp the trend.

Distribution channel
- Part of H&M's strategy to increase sales is to launch products that are advertised
as co-designs with big names in the fashion world such as Versace and Alexander
Wang.
- Zara's strategy is to launch more models than the competition. This approach
allows Zara to attract a wider range of customers with different interests.
Meanwhile, Uniqlo's distribution channel is mainly concentrated in Japan, with
more than 700 Uniqlo stores located in the country of the rising sun. Uniqlo's
distribution strategy focuses on the moment the product is on the shelf, with
meeting the existing needs of consumers as the goal. The brand focuses on
responding to changing trends in Japanese fashion, emphasizing designs that match
the minimalist style favored by the Japanese.

Brand
- Through acquisition and development of distinctive style brands, H&M wants to
attract a wider audience of fashion shoppers. Each of its brands has its own price
range and style ideas. Collection of Style, for example, costs more than the average
price of H&M products and focuses primarily on the European market.
Meanwhile, Monki brand products are only half the price of Collection of Style
products, with more youthful designs.
- Zara divides products into a lower-end group and a higher-end group. Its goal is
to be seen as an affordable luxury fashion retailer. Its main stores are always
located in prime areas in major cities around the world, where rent is very
expensive, such as on Fifth Avenue in New York.  Unlike Uniqlo, in its brand
strategy, Zara does not emphasize advertising issues. Instead, the company poured
money into opening new stores. The learning strategy from The Gap that Uniqlo
applies is to position its brand as a "private-label apparel" brand. This means that
Uniqlo creates its own products at all stages and only sells them in its stores and
website. This company also uses sports events to attract public attention.
2. Importance of suppliers
 
 Uniqlo deals in a restricted variety of fabrics and product planning are done one
year in advance. As a result, they can estimate the demand for raw materials in
advance and participate in bulk purchases. This reduces the cost of raw materials
and they have more time to buy them. Thanks to the brand reputation that Uniqlo
holds, they are able to attract suppliers and maintain long-term relationships with
them. Uniqlo will negotiate directly with suppliers worldwide and place orders in
bulk to achieve economies of scale. With the strategy of "long-term fashion",
Uniqlo is also focused on building strategic partnerships with high-quality and
innovative Japanese manufacturers. They have a highly qualified R&D and
innovation team focused on the in-house development of fabrics such as HeatTech,
LifeWear, and AIRism helping them reduce their reliance on suppliers. There is
less scale for forward integration, and at the same time, the raw materials have a
limited range. Moreover, labor is available in large quantities and labor cost is
cheap when Uniqlo advocates hiring factories in South and Southeast Asian
countries. All these factors are beneficial to the company, and therefore, suppliers
have low bargaining power. 
 3 . Bargaining Power of Buyer 
 Currently, Uniqlo's target market is both men and women, between the ages of 18-
40.
- Age 18-30: regularly update youthful design trends
- Age 30-40: simple design, convenient in daily life
 Customer-centric, Uniqlo has continuously strived to improve the customer
experience by assessing each touchpoint and addressing their needs and
expectations from the company. There are countless substitutes and competitors
with negligible switching costs for Uniqlo customers. Furthermore, variable
customer income affects Uniqlo's sales. There are 2 types of customers. Loyal
customers: customers with high and stable income sources and customers leaving:
high prices compared to income levels lead to not buying at Uniqlo. So customers
with many choices, the bargaining power of customers are high. 
 4. Threat of New Entrants 
 Fashion trends are continuously changing in the clothing segment. People are
getting more aware and hence seek more variety and options. Uniqlo has captured
a specific set of customers who prefer comfort and casual wear over this trendy
drift. Uniqlo currently operates in more than 2250 stores and has focused on
improving its research and development. It is coming up with improved designs
and in-house fabrics and maintaining a low cost, making it very difficult for any
new entrant to copy. It gives the company a unique value proposition. If any new
brand wishes to enter the market, it will have to spend a lot on innovation and
achieving economies of scale. Small companies might have to face fewer
hindrances. Still, the global ones will have to draft out the entire costs for online
selling, distribution channels, store set-up price, standardization, etc., making it a
costly project. However, if a company does cross all these barriers and establishes
a brand name in the market, then Uniqlo will have to compete by differentiating its
product from them. All these factors show that threats from new entrants are
moderate, and the company should keep on innovating more to stay high on the
competition ladder. 
 5 . Threat of Substitutes

 Uniqlo has a brand image of selling high-quality products with the main focus
being on comfort and casualness.  Uniqlo's alternative products are more focused
on the latest fashion and keeping up with ongoing trends.  Switching costs are low
so any change in customer preferences and choices could cause the consumer base
to switch to substitute products. Because of the widespread urbanization process,
the higher the standards of consumers, the more they can use substitute products
whenever Uniqlo makes them unhappy.  The fashion industry is now very
competitive, leading businesses to optimize their strategies to keep loyal customers
and reduce the number of customers leaving. 

  IV .  CORE COMPETENCIES AND COMPETITIVE

ADVANTAGES   
1. Core competencies 
Uniqlo's core competency: ''Focus on fashion basics, save costs.''
 1.1 Fast Retailing 
-UNIQLO generates annual sales of approximately 1.9 trillion yen from
approximately 2,200 stores in 22 countries and regions (the fiscal year 2019). 
-UNIQLO, with the LifeWear concept of ultimate everyday comfort, seeks to
differentiate itself by offering unique products made from high-quality materials
and with high functionality.
 -The Group's main sources of growth driven by UNIQLO are gradually expanding
beyond Japan to Mainland China (Mainland China, Hong Kong, and Taiwan) and
Southeast Asia.  

1.2. Startup Mindset  

 
 UNIQLO positions itself as a brand that offers long-lasting fashion products while
maintaining the perfect balance between price and quality. Thanks to that,
UNIQLO becomes different in the very "no difference". 

 In addition to popular products, the brand also produces seasonal collections
inspired by pop culture icons. These products have unique designs and outstanding
quality, bear the unique mark of Uniqlo, and are always sought after by fans.  In
addition, the brand also uses a marketing strategy: combining social media
campaigns with in-store promotional activities.  

1.3. Customer First 

Customers always have an “Amazing” shopping experience!

 Step into any Uniqlo and you'll be greeted with a 'Welcome to Uniqlo!' welcome.
No matter which branch you go to. Different markets have different local cultures.
Uniqlo has successfully expanded into different regional Uniqlo target markets. It
all comes down to your specific social media strategy.  For example, Twitter and
Facebook are the main social media platforms Uniqlo uses to engage customers in
the UK and the US. That's because market research has shown that these are the
two platforms that Uniqlo's target customers use the most.....

2. Competitive  advantages 
2.1 Good material 

 For Uniqlo, a good product will be made with good materials, suitable for many
people. Polyester is often the preferred material of choice by competitors in the fast
fashion industry. But Uniqlo uses 30% cotton in its collections and only 20%
polyester. 

2.2 Product development: Designed for everyone, made for everyone. 

 Unlike Zara or H&M, Uniqlo is designed to be more product-focused. Uniqlo

clothing is mass-produced and focuses on the most 'minimalist' clothing everyone
needs. “We don't follow trends. People mistakenly say that Uniqlo is a fast fashion
brand. But no, we make clothes for everyone.” – According to Uniqlo CEO
Tadashi  

 Why should you waste your money on Zara's wool blend pattern coat when you
could spend the same amount on Uniqlo's Ultra Light Down jacket?  However,
people still want that white Zara fleece jacket because of its unique look. But
Uniqlo knows that underneath those thin coats, people need their warmer HeatTech
bras — maybe even two layers. 

 That's how Uniqlo tests its product development strategies. It is driven by

consumers' functional needs, rather than their irrational desires.  Uniqlo invests in
creating basic, high-quality, and sustainable casual wear, enhancing performance
by focusing on in-house design and fabric innovation. The product development
team is not trying to capture and copy copies of the latest runway trends. Instead,
Uniqlo's difference lies in the way it applies technological innovation and basic
clothing that can fit our daily needs. Some of their popular product lines include
HeatTech, AIRism, UV Cut, and LifeWear — all of which have been legally
patented to maintain a competitive edge. 

 Whereas Zara tries to compress all of its clothing manufacturing processes (from
design, production, distribution, and retail) to a two-week period, Uniqlo aims to
achieve the opposite. On the other hand, Uniqlo plans to manufacture its wardrobe
a year in advance 
 Uniqlo's manufacturing team is very active in monitoring and addressing quality
and regulatory challenges, with their weekly factory visits. The Takumi team are
Uniqlo's designated industry experts and are tasked with transferring their expertise
on overall plant management. Each person must have at least 30 years of
experience in the Japanese textile industry.  

2.3  Unique digital marketing strategies 

 Being one of the first brands to successfully launch a digital marketing campaign
with an advertising project called 'Uniqlock' in 2007. The viral marketing project,
designed to build brand awareness internationally, featured a watch with
choreographed dance clips. Uniqlock has won numerous major advertising awards,
including a Grand Prix at the Cannes Lions festival. Uniqlo has grown over the
years through a multitude of different collaborations. Uniqlo has worked with
ambassadors around the world such as tennis world champion Roger Federer and
professional golfer Adam Scott. The company has also pioneered design
partnerships with various teams and designers worldwide. This has helped
Uniqlo’s approach to providing suitable clothing for all subjects. In addition,
Uniqlo also conducts marketing campaigns for the community. To contribute to
building a "clean" brand in the eyes of the public, Uniqlo always makes practical
contributions to society and the community. Uniqlo's most successful campaign is
to recycle old products. This way, customers can collect old Uniqlo products and
bring them to a Uniqlo store for recycling. The items are collected by Uniqlo and
then distributed free of charge to disadvantaged people, homeless people, etc.
worldwide. Since 2007, Uniqlo has partnered with the United Nations High
Commissioner for Refugees (UNHCR) to deliver more than 20.3 million suits to
refugees. Uniqlo also has 2 revolutionary campaigns, Uniqlo Uncover Magazine
and  Made for all 

  V. ANALYZE THE CURRENT STRATEGY THAT THE 

BUSINESS IS APPLYING 

1.  Corporate-level strategies   

 1.1  Diversification Strategies  

 Related diversification 

Uniqlo's product lines are mostly clothing and related fashion accessories such as
shoes, hats, and bags. In addition, Uniqlo also has services such as printing and
designing shirts on request.
 1.2 Integration Strategies

 Forward integration

Uniqlo controls the distribution of products from the factory to the stores. Unlike
Zara, which uses a centralized distribution system (all products will be gathered at
the main hub in Spain), Uniqlo uses a regional distribution system, mainly in
Asia. , guaranteed transit time of no more than 6 days, with online sales no more
than 1 day. In 2018, 90% of workers at a distribution center in Tokyo were
replaced by robots. Technology has allowed Uniqlo to shorten the time from
ordering to shipping to just 15 minutes, saving up to 95% of the time (previously
this process took from 8 hours to 16 hours).

 1.3 Intensive strategies 

    Market development guidelines 

Uniqlo also uses celebrity images to expand the brand's image and connect with
the masses. Uniqlo currently has 6 Global Ambassadors, all of whom are
champions in sports such as tennis, skiing, golf.

Partnerships with Uniqlo Global Ambassadors typically last for 5 years with the
aim of helping the ambassador promote the Uniqlo brand and clothing worldwide,
as well as collaborate on future product lines. Today, Uniqlo has more than 1,900
stores around the world (with 843 stores in Japan). Currently, Uniqlo has 12 stores
in Vietnam in 3 cities, Hanoi, Hai Phong, and HCM City, and plans to expand to
other locations other provinces in the future

 Product development guidelines

Instead of following fashion trends, Uniqlo focuses on research and development

to continuously improve products, so that Uniqlo's target customers always have
the best products. Uniqlo is constantly improving based on technology for the birth
of new innovative fabrics. Uniqlo's innovation projects can mention HeatTech,
AIRism, and Lifewear, but HeatTech is the most famous of them all. HeatTech is a
fabric made from a bio-thermal material, which helps keep warm without being too
thick. This technology helps convert moisture from the body into heat, keeping the
user comfortable in the long winter. Besides, Uniqlo is also known for its cooling
technology AIRism (with ultra-thin fibers) to keep the wearer comfortable. roof
and cool in hot weather. Each of Uniqlo's innovative technologies is clearly named
and has a media campaign to promote, making them gradually become
"signatures" whenever people mention Uniqlo.

 2. Business level strategies 

Differentiation Strategies

Uniqlo sets itself apart from the competition by focusing on creating a unique point
in materials with beautiful, durable materials typically named like HeatTech,
LifeWear and AIRism. Uniqlo provides a differentiated shopping experience by
perfectly managing its stores, building a positive employee  

  VI. SUGGESTION FOR ADJUST MENT COMPLEMENTING

THE CURRENT STRATEGY

 SWOT OF UNIQLO 

1. Strength  

-  Uniqlo's products are of good quality, durable, and highly applicable. Uniqlo's
outstanding products with good quality such as heat-retaining clothing and sun-
protective clothing. Consumers look to Uniqlo for products they wear every day,
under a variety of weather conditions. 

- Because Uniqlo's clothing has a simple and convenient design, Uniqlo's customer
segment is quite wide. Young children to the elderly can use Uniqlo's products 

- Innovations: Uniqlo is credited with significant innovations which have set them
apart from their competitors. Some examples include the Heat Tech fabric which
turns moisture into heat and then retains the heat in heat pockets, Airism a
stretched fabric, and Life wear a blend of casual and sportswear. These innovations
have helped Uniqlo introduce features into their clothing line thereby setting clear
differentiators.

- Uniqlo has good market development strategies, so the brand has a foothold in
domestic and foreign markets. 

2. Weakness    

- Although Uniqlo aims to be an affordable brand, when it comes to Vietnam,

Uniqlo's price is still quite high compared to the average income of Vietnamese
people. Therefore, Vietnamese people can have many other more suitable
choices.  
-  Although in the era of fairly developed e-commerce and businesses with very
high sales on e-commerce platforms, Uniqlo's e-commerce site has not really
developed yet and has not attracted many customers.

3. Opportunities   

 - Previously, when consumers wanted to buy branded goods, they had to order
from abroad and had to find a way to ship them to Vietnam. However, nowadays,
more and more self-made brands are coming to Vietnam. A series of big brands in
turn landed in this lucrative potential market and all achieved great success. Uniqlo
also has remarkable successes

- Vietnam's retail fashion market is always evaluated by foreign "giants" as quite

potential, creating a big attraction. According to a recent online survey by Nielsen,
Vietnam is the third largest country in the world in terms of brand preference, 56%
of Vietnamese are willing to spend money to buy branded goods. Besides, with a
population size of more than 97 million people and a young population structure –
according to the World Bank, (70% of the population is under 35 years old (2019)
– growth in fashion spending in Vietnam ) is a good improvement.  

- E-commerce in the fashion industry is especially fast growing in Southeast Asian

countries, especially after the epidemic. According to the Department of E-
commerce and Digital Economy, Vietnam's e-commerce will experience
impressive growth in 2020 with an increase of 18%, a market size of $11.8 billion,
and an estimated 5.5% of the total. retail sales of consumer goods and services
nationwide 

- Recently, the trend of sustainable fashion is gradually taking the throne with the
environmental protection movements of young people. They look for sustainable
fashion brands that don't release too much waste into the environment. Uniqlo is
one of a number of fashion houses that are doing well with simple designs and
good inventory handling.

4. Threats  

-  Uniqlo's biggest competitors include H&M, Zara, Uniqlo, GAP or more recently
other integrated business groups. Each year Zara releases up to 11,000 new
products and always keeps up with fashion trends around the world. That attracts
consumers while Uniqlo is still mostly simple fashion models that have not
changed much over time. 
-  In recent months, inflation has been the most discussed topic at fashion weeks in
Paris and Milan. The prices of raw materials in the textile sector, like many other
raw materials, are skyrocketing due to the recovery in demand from the pandemic
and rising energy and transportation costs. Prices for cotton yarn, linen, silk, and
wool, as well as synthetic materials derived from petroleum, have also increased,
mainly due to strains in the global supply chain. Therefore, the cost of products
may increase, and consumers will tend to spend less on fashion items.

TOWS OF UNIQLO  

STRENGTH  WEAKNESS 
 IFAS - Good product quality -  Price is still somewhat
- Innovation: continuously costly when compared to
improve the product with Vietnam's standard of living
technology - Online sales channel is
-Having a good brand still subpar.
position in the Vietnamese
EFAS
market
- Wide customer segment

Opportunity   - Focus on improving - Apply the combined

- Foreign fashion attracts products that come in online and offline sales
customers multiple sizes and colors policy

- The potential of the retail - Open more stores in

fashion market in Vietnam medium and large cities - Design more attractive e-
is great - Use marketing on social commerce pages to attract
- Fashion e-commerce platforms to increase customers
grows fast coverage

- The rise of sustainable

fashion

CHALLENGE  . -Apply differentiation  -Applying sales policies

policy according to the combined
- Fierce competition sale season
- Preferential policies to - Use technology to develop
- Inflationary retain loyal customers products and promote that
feature