UniQlo Company's SWOT and Risk Analyses | Free Essay Example

UniQlo Company’s SWOT and Risk Analyses

Words: 582
Topic: Business & Economics
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Strengths

  1. The company has very attractive discounts, promotions, and customer care service within the Chinese market. This means that the company’s visibility and footfall in the Chinese market is very attractive.
  2. The UniQlo Company is one of the leading retailers of clothes in China market, in terms of profits and sales. This means that the company has strong presence in the market (UniQlo Company 2014).
  3. The company has successfully benefited from the cheap labor in the Chinese market to establish a brand name in the expansive market.
  4. The company has a strong labor force, series of clothing products, and systematic corporate governance system within the Chinese market.

Weaknesses

  1. The company suffers from high brand bargaining power in the Chinese market since there are several alternatives. Therefore, the high product switching greatly affects the value of the company in China.
  2. The company has a very limited brand recall and recognition despite its massive presence in the Chinese market. This could be attributed to ineffective marketing strategy.
  3. The company has not fully rolled out its vertical integration strategy in China. Most of the management strategies are generated and controlled from Japan. Thus, this has limited the elements of creativity and innovation in the Chinese market (UniQlo Company 2014).
  4. The company operates in a highly stratified society in China. Since the clothing products retailed by the company are not tailored for a specific market, there are several instances of product rejection reported among the Chinese.

Opportunities

  1. Since the company has a visible brand in the Chinese, it could embrace social media and viral advertising to ensure that it increases its customer base in China.
  2. The company’s quality brand image could be an immediate leverage in its current strategy of product portfolio expansion within the Chinese market.
  3. The company has opportunity of physical expansion and brand recall through sponsorship of series of sports activities and events in China. This strategy is likely to increase its brand presence in the urban and rural regions in China.
  4. The company may also take advantage of the market demographics in China to create multiple brands for the male and female customers (UniQlo Company 2014).

Threats

  1. The company may not be able to change the product features according to changing external Chinese environment and needs of the customers, since the Chinese product patent policy may limit it.
  2. The main threats facing the company is presence of competitors providing similar or nearly similar products at low cost in China. For instance, McLaren Polo and Marc and Spenser have cheaper clothing brands in the Chinese market.
  3. The emphases on middle and up-scale markets segments in China leave the firm susceptible to several possible large-scale economic downturns. In addition, the single market focus on high-end urban setting reduces the firm’s competitive edge.
  4. The firm has not yet fully developed in China to allow speedy delivery of products to the Chinese consumers (UniQlo Company 2014).

Risks of the UniQlo Company in China

Internal risks

  1. Language barrier in management and marketing.
  2. Ineffective vertical integration strategy.
  3. Double taxation regime and restrictive business laws.
  4. Excessive government intervention in China may interfere with the business policies (Dagnino and Rocco 2009).

External risks

  1. China market is known for counterfeiting due to ineffective patent laws.
  2. Since the business is relatively new in China, it will face competitive risks.
  3. The economic and legal laws in China are more restrictive that in Japan where the company is well established.
  4. Rapidly changing customer preference may reduce the annual sales turnover (Dagnino and Rocco 2009).

Reference List

Dagnino, G, and Rocco, E 2009, Competition strategy: theory, experiments and cases, Routledge, New York.

UniQlo Company 2014, Retail strategy. Web.