Uniqlo Case

Introduction

This project is about Uniqlo Co., Ltd. enter the new market which is Vietnam in ASEAN(ASEAN FTA 2012). Uniqlo Co., Ltd. is a Japanese casual wear retail company. It not only retails casual clothing but also design and manufacture their own product. Around the world there is over 1,400 Uniqlo retail store (Fast Retailing 2014). Uniqlo set up the design studio in New York and joint venture with South Korea's Lotte Shopping Co., Ltd. to expand the business , these kind of international expanding business action has been undergoing since 2004 (Fast Retailing 2010). From 2011 to 2012, Uniqlo keeps to expand the business and involve more international activities. In recent years, Uniqlo entered the East South Asia market such as Thailand, Philippines and Malaysia(Fast Retailing 2013). This is the trend of Uniqlo expands the business to East South Asia countries.

Base on Porter's Generic Strategies there is four strategies segment they are differentiation, overall cost leadership, focused differentiation and focused cost leadership (Porter 1980). Uniqlo invested a lot of factories in different developing countries. Uniqlo is finding the low cost production process in those countries and their products are targeted to broad segment. levitt claimed that when business enters to other market with no change on the product or service it is standardization, adaptation is there have change to adapt the local market needs (Levitt 1983). Uniqlo business is mixed with standardization and adaptation. The product mainly with the same style so it can reduce the production cost but the size scale for Vietnamese may need to adjust to fit the consumer. According to Porter's Generic Strategies, Uniqlo business strategy is overall cost leadership.

The BCG matrix (growth share matrix) adapted by Doole and Lowe show the company business or products can be split into four part, they are star, question mark, cash cow and dog (Doole and Lowe 2012). Uniqlo business in Vietnam the star, question mark, cash cow and dog products should be graphic printed t-shirt, HEATTECH inner wear, casual shirt or pants and jackets respectively.

Vietnam is in East South Asia region the temperature average above 20℃ only in December to February the climate slightly cool around 15℃(World Weather 2014).Then the t-shirt, pants and shirts are more suitable for the Vietnamese customers. Uniqlo expected that can grow fast and get large market share. On the other hand, the jackets only can be sold in short period during the year then it can't grow fast and have small market share.

External and Internal Analysis

External analysis

PESTLE Forces is using for external analysis which is including political, economic, socio-cultural, technological, legal and environmental(Douglas and Craig 1995). In this part, PEST will be focused to analyze.

On the political aspect, Vietnam is a socialism country but recent years it has had good relationship with capitalism country such as Japan(News Chinhphu 2014). Uniqlo is a Japan casual wear retail company. Vietnam government built the good relationship with Japan then Uniqlo have opportunity and support from Vietnam when it enter the new market.

Also Japan want to have closer relationship with ASEAN to explore potential region for sustainable economic development(News Chinhphu 2010).Vietnam is one of the member country in ASEAN if Japan want to show it is willing to have closer relationship with ASEAN then invests from Japan is a good action to show friendly.

The total tax rate of corporate income tax in Vietnam is15.73% of the profit(Doing Business 2013).

On the economic aspect, Vietnam not only trading their produces but also depends on exports of key commodities to improve the economic state(News Chinhphu 2014). In Vietnam the unemployment rate is decreasing but teenagers unemployment rate still high(News Chinhphu 2014). Uniqlo can set up factories in Vietnam so Uniqlo can provide jobs to the teenagers and having low cost labor power at the same time. Vietnam with ninety million population which is a potential consuming power in East South Asia region compare with other developing countries(News Chinhphu 2014). In addition, the infrastructures in Vietnam are not developed well specially the high way but it with a long coastline to handle the waterway transportation. Therefore the goods import and export can through waterway and air transportation.

On social-culture aspect, Vietnam is a high context and fast diffusion market just similar with Japan. Wills, Samli and Jacobs (1991)state that the market in Asia region are high context and specially in south east Asia is fast diffusion(Wills et al. 1991). The Uniqlo's management from Japan can make deal with Vietnam government and other business partner due to they all have similar culture. The products from Uniqlo are casual style it can fulfill the Vietnamese simple style. Moreover the population of Vietnam close to ninety millions which is a potential market.

On technology aspect,