MGMT6011 Strategic Management Capstone Proof Reading Services

MGMT6011 Strategic Management Capstone Proof Reading Services

Part 1- Identified Strategic Issues

PEST Analysis of UNIQLO

So as to analyse the external aspects influencing the organisation PEST analysis proves to be of great help (Rothaermel, 2015). The PEST analysis of UNIQLO is as follows:

Political

The political aspects of the geographical region, where the organisation wants to conduct business operations in largely influence functioning of the business operations. With respect to UNIQLO, political aspects such as in Hong Kong the governance philosophy is of two systems and in this there are two types of systems for different regions in Hong Kong. There are advantages and disadvantages of both system and altering the business operations according to the political system can help the organisation in capitalising on market shares even in foreign countries.

Economical

The economical factors also influence the functioning of the organisation on a large scale as all the monetary decisions regarding the business operations are hugely influenced by economic aspects of a country (Barney, & Hesterly, 2015). The strength of an economy determines the amount of returns that the organisation can expect from business activities in a country. For example the GDP of Hong Kong is approximately USD 206.7 Billion and is one of the biggest trading hubs in the world. The strategy of UNIQLO is based on the economic factors of the country and hence it gains monetary benefits.

Social

The buying behaviour as well as buying decision of customers is hugely influenced by the social factors of a country. For example, in Hong Kong there are approximately 6,985,300 and they have a rising interest in private labels in apparels. This has made Hong Kong a promising region for the business of clothing products. Thus the organisation is continuously investing in the market of Hong Kong and provides clothing products with respect to the preferences of the potential customers of Hong Kong.

Technological

The technological aspects are labour intensive as per the apparel industry all over the world. The apparel industry is driven towards automation but yet a lot of operations in production require human labours such as sewing. There are automatic sewing machines which reduce the production time and also facilitate training. They also require human attention to function and hence the industry is labour intensive despite of automate technology. Technology can also be used for many other purposes such as printing and making sketches etc. Following attest trends in technology helps the organisation in sustaining and rising in the competition.

Figure 2: Countries in Which UNIQLO is Active

Porter’s Five Forces Model

Porter’s Five Forces Model was developed by Michael E. Porter and its purpose is to assess the competition in a particular industry along with the business strategy development. It identifies the intensity of competition in the industry long with its attractiveness (Porter, 2008). The description of the model with respect to UNIQLO is as follows:

Threat of Entry

The threat of entry in the model is directly associated with the organisations that have currently joined or are planning to join the industry for business purposes. The apparel industry is customer oriented i.e. the buyer behaviour as well as decision is the topmost priority of the organisations in this industry including UNIQLO. There is not much threat to UNIQLO by new entrants as UNIQLO has a positive brand image worldwide and that is the strength that new entrants do not have.

Threat of Rivalry

The organisations in the apparel industry face competition on both domestic and international levels (Renz, 2016). The strategy of UNIQLO against the rivals is to provide high quality clothing products along with innovative designs so as to ensure competitive advantage. This strategy has helped the organisation in sustaining and rising in the competitive market.

Threat of Substitutes

There is a threat of substitutes to apparel organisations like UNIQLO as one kind of clothing can easily be replaced by another kind of clothing in a lot of ways. This replacement can depend on a lot of factors like price of the substitute and taste of the customer etc.

Threat of Suppliers

There is a threat to UNIQLO from the suppliers of raw materials such as raw fabric. This threat can be due to availability of raw materials or transportation expenses etc. Therefore, UNIQLO maintains its complete control over the production so as to avoid the threat of suppliers to the maximum extent.

Threat of Buyers

There is a threat from buyers to UNIQLO as the industry highly depends on the customers and their preferences. There is always a threat to a new collection based on how much will the buyers like it (Jayarathne, et al. May). As a result, UNIQLO focuses on the quality and design of the product with respect to the preferences of customers.

Figure 3: Porter's Five Forces Model

Analysis of Competitors

The competitors of UNIQLO are of two types domestic and international. The domestic competitors are a threat to the organisation in the home country i.e. Japan (UNIQLO, 2017). Whereas the international competitors are the ones that pose are threat on an international level. The below table shows both the international and domestic competitors of UNIQLO:

Table 1: Competitors of UNIQLO

Strategic Group Mapping

The concept of strategic group mapping is based on the competitors of an organisation in an industry. As per UNIQLO the major competitors are GAP,Benetton, H&M, American Eagle, Forever 21, Brandy Melville, Land’s End, Bossini, Muji and Old Navy etc. All these organisations have their positions in the market as per their popularity, sale, profit generation and various other factors. Strategic group mapping is done mainly on the basis of quality and price (Morschett, et al. 2015).

Figure 4: Strategic Group Mapping of UNIQLO in International Market

Part-3 Analysis Of Internal Strategic Issues - Uniqlo

SWOT Analysis of UNIQLO

The internal analysis of the organization can be carried out with the help of a SWOT analysis. The SWOT analysis will evaluate the internal aspects of the organization as per the strengths, weaknesses, opportunities, and Threats. The SWOT analysis of UNIQLO is as follows (Colovic, G. 2014):

Strengths

The organization UNIQLO has rose above in the domestic markets of Japan along with international market as per the apparel industry because of its certain strengths. These strengths have continuously leaded to the rise of the organization in the market. One of the major strengths of UNIQLO is the assurance of divergence that facilitates the individuality of the customers and also promotes the edgy and fashion forward side of them. The products of UNIQLO are developed so as to meet the international standards of quality. The international quality is maintained so as to survive in the competition with global brands worldwide. The international quality of UNIQLO products is responsible for attracting customers from all over the world towards buying UNIQLO products.

Another focus of the authorities and designers of UNICLO is on the market research as that determines the preferences of the customers which in turn facilitate the product development as per the market trends and customer demands. One of the major factors supporting the organization is VOC i.e. Voice of the Consumer (Bagla, & Dhingra, 2015). The organization still requires more than that for rising in the market and therefore, it is suggested that the organization can be connected directly to the value chain process. It can be done with the help of provision of quality products at reasonable prices. After the production is carried the major focus of UNIQLO is the efficient distribution of the products among the customers as well as inventory control.

Weaknesses

Despite all the strengths there are many weaknesses of the organisation too that keep the organisation from rising above what is already achieved. UNIQLO has to focus on getting above these weaknesses so as to rise in the market as well as to sustain that position. Fast Retailing as well as whole of Japan, both are known for the production of functional, casual and simple type of clothing. This clothing is mostly accepted in most of the countries due to its simplicity but at the same time these products fail to facilitate the market penetration of the organisation where there are elevated demands of high-fashion. These regions involve New York, Milan, Paris, and London; there are high demands of extravagant and cutting edge clothing in these areas. Therefore as per such areas the fashion quota of UNIQLO is not enough. One more weakness of UNIQLO is that of multi-layer distribution. This is a drawback for the organisation as the distribution digestion is difficult and it leads to clogging in the distribution. The basic targets of the organisation are the low-end consumers and therefore it fails to satisfy customers with a high-end preference.

This leads to lesser market demands on a global level especially in the areas with the demand of high-end fashion. The organisation also cannot provide street and ethical clothing as there is standardisation in the product design and the ethical and street designs differ in various countries. In many, countries the profitability of an organisation is identified on the basis of sales in the peak seasons such as festive as well as holiday seasons. Therefore the organisation is advised to gain the required operational and managerial competency as per the sustenance in the markets of fashionable areas. If the organisation fails to do so it can cause serious negative effects in business operations as well as revenue generation in these regions.

Opportunities:

There are many opportunities for maximisation of revenue generation as well as business expansion for UNIQLO. The apparel industry highly relies on the hanging trends and therefore the scopes of business expansion are always positive. The clothing industry enjoys increased simultaneity because of globalisation due to introduction to latest technology as well as exchange of information and cultures of various countries (Turker, & Altuntas, 2014). The major opportunities for the industry include the fast interchange of information and data from across the world with the help of customers as well as integration of information technology. The organisation can also focus on developing products for teenage population as they can easily be made to get attracted towards clothing products.

Threats

There are many threats to UNIQLO from the outside world that influence the business operations on the inside of the organisation. There are some threats that all the organisations in the industry are facing that involve the threats of changes in economy, fashion trends, consumption behaviour as well as competition. UNIQLO alone is facing threats like currency changes due to operations on a global level. The threat of fluctuations n the labour market is also worrying the authorities at UNIQLO.

Value Chain of UNIQLO

Value chain refers to the procedure of actions of an organisation that facilitate the addition of value in the products of an organisation and the actions include production and manufacturing; marketing and promotion as well as the services after sales (Value Chain, 2017). The value chain diagram of UNIQLO is as follows:

Figure 5: Value Chain- UNIQLO

VIRO analysis

The business analysis framework that forms part of organizational larger strategic scheme consider as VRIO analysis. It is a basic strategic process of analysing the resources and capabilities of organization. The major elements of VRIO analysis are Value of organization, Rarity, Imitability and Organization that influence the internal activities of organization.

Table 2: VRIO analysis

  Part- 4 Recommendations To Solve Strategic Issues

References

Books and Journals

Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.

Rothaermel, F. T. (2015). Strategic management. New York, NY: McGraw-Hill.

Barney, J. B., & Hesterly, W. (2015). Strategic management and competitive advantage concepts and cases. Pearson.

Renz, D. O. (2016). The Jossey-Bass handbook of nonprofit leadership and management. John Wiley & Sons.

Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management. Springer.

Bagla, V., & Dhingra, S. (2015). A multi-criteria approach to study the significance of branding as amarketing strategy in clothing Merchandise. ZENITH International Journal of Business Economics & Management Research, 5(6), 160-170.

Colovic, G. (2014). The Garment Manufacturers Risk Assessment-Swot Analysis. Journal of Textile Science & Engineering, 4(6), 1.

Turker, D., & Altuntas, C. (2014). Sustainable supply chain management in the fast fashion industry: An analysis of corporate reports. European Management Journal, 32(5), 837-849.

Ngai, E. W. T., Peng, S., Alexander, P., & Moon, K. K. (2014). Decision support and intelligent systems in the textile and apparel supply chain: An academic review of research articles. Expert Systems with Applications, 41(1), 81-91.

Kang, J., Liu, C., & Kim, S. H. (2013). Environmentally sustainable textile and apparel consumption: the role of consumer knowledge, perceived consumer effectiveness and perceived personal relevance. International Journal of Consumer Studies, 37(4), 442-452.

Müller, M., Hofstetter, J. S., & Goerzen, A. (2015, June). Organizational aspirations and violations of a social standard's minimum requirements in the emerging economies' clothing industry. Academy of International Business.

Jayarathne, P. G. S. A., & Warnakulasooriya, B. N. F. (2014, May). RESPONSIVENESS CAPABILITY IN THE INTERNATIONAL CLOTHING INDUSTRY: GLOBAL QUICK RESPONSE AND PLANNING POSTPONEMENT CAPABILITIES. In Proceedings of International Conference on Business Management (Vol. 10).

Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40

Online Reference

Strategic Management, 2017 [Online] [Accessed Through] <https://www.ukessays.com/essays/business/strategic-management-uniqlo.php> [Accessed on 27^th March 2017]

UNIQLO, 2017 [Online] [Accessed Through] <https://www.uniqlo.com/us/en/home/> [Accessed on 27^th March 2017]

Value Chain, 2017 [Online] [Accessed Through] <http://www.investopedia.com/terms/v/valuechain.asp> [Accessed on 27^th March 2017]