SWOT Analysis of Uniqlo

Introduction 

Swot analysis of Uniqlo. Uniqlo Co. Ltd is Japanese retail, manufacturing, and designing multinational company. Uniqlo has been operational since March 1949 under the name of Ogori Shoji. The headquarter of the apparel company is in Midtown Tower, Akasaka, Minato, Tokyo, Japan.

Uniqlo’s main products and services are men’s, women’s, and clothing, apparel, accessories, casual and professional dress, jeans, t-shirts, sportswear, outwear, polo shirts, and much more.

Fast Retailing is the parent company of Uniqlo since 2005. However, the annual operating profit of Uniqlo in 2020 was 1.21 billion dollars. The annual sale of the clothing company was 17.2 billion dollars. The company has employed more than 30,000 employees to manage its worldwide operations.

Uniqlo’s top competitors are Tesco, Walmart, H&M, Zara, Gucci, ARMANI, Tommy, Amazon, Gap, Hilfiger, Macy’s, and United Colors of Benetton.

Today, we’ll discuss the swot analysis of Uniqlo. It’s going to analyze the internal and external factors impacting the world’s leading apparel clothing company. Here’s the swot analysis of Uniqlo as follows;

Strengths of Uniqlo

Outsourcing

Uniqlo follows the effective operational strategy of outsourcing the manufacturing work from China and other Asian countries. It has allowed the company to take advantage of the cheap labor and achieve cost efficiency.

Global Brand

According to an estimate, Uniqlo has got approximately more than 2252 stores in over 17th countries worldwide. Some of those countries are the USA, UK, Spain, Singapore, South Korea, Malaysia, Indonesia, India, Germany, France, China, Canada, Bangladesh, Australia, and many others.

Discounted Price

The smart operational strategies help Uniqlo to reduce the supply chain and other operational costs. The cost efficiency makes it possible for the company to provide discounts to the customers. It’s beneficial both for the customers and the company.

Leadership

Tadashi Yanai is the visionary leader and chairman of the company. When he inherited the company from his father, it only comprised 22 tailoring stores. He made the company into a clothing icon brand and crossed the boundaries of many countries.

Innovation

Uniqlo has established the reputation as one of the world’s most innovative brands in the clothing and apparel industry. Whether it’s sportswear, life wear, stretched fabric, Airism, or heat tech fabric which converts moisture into heat, such features have allowed the company to differentiate its apparel from competitors.

Brand Value

According to an estimate by Forbes, the brand value of Uniqlo in 2020 was 9.2 billion dollars. The clothing brand ranked at the 84th position of the World’s Most Valuable Brand in 2020.

Weaknesses of Uniqlo

Supply Chain Issues

It’s no doubt Uniqlo is operating its business in more than 17 countries across the globe. But the clothing brand is facing supply chain issues in further expanding its business in the global market. Many other apparel brands are shifting their business into the e-commerce industry, while Uniqlo has been a bit slower in adapting to the latest trends.

Apparel Sensitivity

Heat tech weather-sensitive apparel of Uniqlo has achieved tremendous success in the Asian countries because they were suitable under such conditions. However, the sensitive apparel turned out to be a huge failure in the US market.

Low Brand Recall

Even though Uniqlo is multinational clothing, but the company has a very low brand recall value. The clothing brand has a low market share in the US market.

Opportunities available to Uniqlo 

Global Expansion

Uniqlo is an old brand and running its business only in 17 countries, and it’s a lower market for an experienced clothing brand. Therefore, Uniqlo expands its market further in the Asian, European, and Latin American countries. The emerging markets have got a plethora of opportunities available to them.

Sports Events

The outdoor activities are going to start again because the pandemic and worldwide lockdown is fading away. Now, Uniqlo should exploit this opportunity and sponsor different upcoming sporting events. It would help the company to increase the brand promotion and brand recalling rate.  

Digital Media Marketing

We’re living in the world of social media platforms like Facebook, Google, YouTube, Instagram, TikTok, Twitter, LinkedIn, and others. Different segments of the customer demographic are active on these platforms. Therefore, Uniqlo should expand its marketing and promotional campaigns on these platforms to attract new customers.

Portfolio Expansion

Uniqlo should exploit its experienced brand name and expand its product portfolio. It would help the company to target more customers. Consequently, it would increase the sale and profitability.

Threats Uniqlo has to face 

Regulations

The eco-friendly movements are claiming that the clothes manufacturing and fast fashion companies are increasing the global waste. That’s why many governments are introducing laws for clothing brands like Uniqlo relevant to waste reduction. Such regulations have made it difficult for the company to operate and expand its business.

Brand Switching

When customers visit the shopping mall or any online store, then they’ve got a lot of choices to choose from. Often there isn’t much difference among apparel designs of various brands. It has decreased brand loyalty. That’s why customers easily switch brands.

Competitors

H&M, Zara, Gucci, Tesco, Walmart, Macy’s, and others are some of the main competitors of Uniqlo. They’re competing with the clothing brand in different categories. Their presence in the global market has limited the company’s growth and expansion rate.

Conclusion: Uniqlo Swot Analysis 

After an in-depth study of the swot analysis of Uniqlo, we’ve concluded that Uniqlo is indeed the world’s leading clothing brand. The increasing competition, regulations, supply chain issues, and limited global presence are some of the main challenges. Uniqlo should expand its portfolio and customer market in order to address these issues.