Business Research: UNIQLO and their Customers and Suppliers

Business WritingBusiness Concepts
Feb 5, 2010

Business major college students are often tasked with writing a business plan, creating advertisements, and drawing up a business model canvas , among others. Even if they are business major college students, it does not mean that they are quite skilled in writing – although they should acquire the skill in the long run. Usually, freshmen business students need help in writing business papers like those mentioned above. What we have here is a full sample of a business research paper that focuses on how the brand UNIQLO is managing its suppliers and customers to guide you in writing your own business research paper.


UNIQLO’s Management of their Suppliers and Customers

Introduction

UNIQLO started as a chain of men’s clothing stores known as Ogori Shoji in 1972 in Japan. When it was turned over to Tadashi Yanai – UNIQLO’s and Fast Retailing’s current Chairman, President, and CEO – Ogori Shoji was renamed Unique Clothing Warehouse which was eventually shortened to what is known today as UNIQLO. Tadashi Yanai became inspired by famous casual clothing chains that he transformed their company from a tailoring store to a casual wear store.

Tadashi Yanai taking over the company was seen to be the catalyst for the rapid expansion Fast Retailing and UNIQLO has witnessed over the years. In just 14 years since he was promoted as president of the company, Tadashi Yanai has expanded the company by opening over 300 UNIQLO stores across Japan. By this time, UNIQLO may be perceived as thriving because of its expansion rate but the people of Japan actually view it as “a discount retailer selling cheap and low-quality apparel to the suburbs” (Roll, 2021).

UNIQLO managed to reverse its brand identity to being known as a store where people can avail of high-quality clothing at a fairly affordable price. UNIQLO gained more popularity as the brand went from being known as a cheap store to being known as one of the biggest fast fashion giants in the world with over 2.2 thousand stores across Asia, Europe, and the United States. Even today, UNIQLO is keeping up its brand image as a place where people can buy high-quality casual wear at significantly low prices.

However, this fast-growing company, like many other big businesses, has met its match with how 2020 has greeted the world . The COVID-19 pandemic affected a fast fashion giant simply because of the imposed lockdown in many countries. For some time, buying new clothes – even casual wear – seemed to be unnecessary for people were forced to stay indoors. UNIQLO’s revenue and profit declined in 2020 but as soon as the virus was brought under control, so did UNIQLO strive to rise again.

The current global economy makes it harder for businesses to thrive as some are still recovering and some are really having trouble dealing with the economic problems in their countries. However, UNIQLO has a plan to further its growth potential as the desire to purchase new clothing is taking over the middle-income population. As UNIQLO provides casual wear, they have seen this as an opportunity to provide their consumers with what they desire.

Reacting to the middle-income population’s desire to purchase clothing, UNIQLO's basic and essential pieces are sure to be bought no matter if people are meant to stay at home. And even if they are to go outside, their simple and universal designs would not restrict people from moving as they please and would not add to the hassle of wearing a mask. And with UNIQLO’s unique clothing innovations like LifeWear, HeatTech, and AIRism, consumers can surely find what they need and be satisfied with their purchase.

In the age of the coronavirus, people are seeking comfortability and hassle-free transactions. Consumers want to spend less time going through racks and racks of clothes in physical stores and are more inclined to browse, click, and sometimes chat with a customer service representative to buy an item and have it delivered right to their doorstep. With the pandemic still going on, how is this fast fashion giant adjusting to the sign of the times?

UNIQLO integrated digital means of conducting business years ago when thy focused on producing only what they can sell instead of selling what they have already produced. Realizing that the company has to keep up with technology in order to survive, Tadashi Yanai recognizes such change in a press interview when he said “fashion and apparel products are the data itself, Amazon and Google will have great power in this industry too. In order to overcome such challenge from these digital giants, we need to transform our supply-chain system by using digital technology.”

Since then, they have changed their business operations which proved to be advantageous when the pandemic happened because that only means that UNIQLO does not have to suffer as much as other companies – even if their revenue and profit declined – because they have long since integrated digital technology to their operations. This raises the question of how well UNIQLO actually manages its customers and suppliers as those are vital to keeping the company afloat in these trying times.  

UNIQLO’s Business Model and What Sets It Apart from Other Fast Fashion Companies

Managing customers and suppliers is vital to business growth and UNIQLO is doing such a great job at that as their business model is customer-centered and it unifies the whole process of the production of their essential pieces. Featuring unique and superior clothing innovations, UNIQLO never ceases to offer its consumers pieces that offer casual design and utmost comfort.

Making use of technology, UNIQLO gathers customer feedback and suggestions. UNIQLO is quite proactive when it comes to engaging with their customers and making sure to meet their requests and raise customer satisfaction. Being in touch with its customers is what helps UNIQLO achieve its goal to produce only what it can sell because customer suggestions and feedback are a way to tell if a design will last or if it should no longer be produced.

UNIQLO has found an excellent way to harness technology to leverage itself against its fast fashion competitors. They make sure to only produce what the customers want and in the midst of the pandemic, they have received so many requests regarding producing masks with their AIRism material. Their customer center gathers feedback such as this in order to help with the analysis of their customer’s desires and to make sure that the planning and production departments have the information they need to create what the consumers are looking for.

The gathered customer feedback is forwarded to the research and development centers so that it can be incorporated – if possible – into the designs they are developing. The research and development department is also the one responsible for UNIQLO’s unique clothing technologies. Once the materials and designs are finalized, the data is then forwarded to their manufacturers or suppliers. UNIQLO makes sure that they only procure top-quality materials from the best manufacturers worldwide. They have also partnered with specific companies to develop and produce some of their more innovative clothing materials.

Customer feedback is also forwarded to the production department so that if any changes are to be made to specific materials they use for their clothing, they can plan and change it as soon as possible to cater to the customer’s needs. Of course, every fast fashion company needs to store inventories and UNIQLO monitors its sales and compares them to its stocks on a weekly basis to optimize its control over its inventory. As they have planned seasons ahead of production, it is possible that they have miscalculated and have some inventory left. With their goal to sell everything on hand, their teams work together in an effort to sell the remaining inventory up to the last piece.

Using the just-in-time inventory procurement, UNIQLO manages to have stocks delivered to stores right before it runs out. That way, a consumer never experiences that what they want is currently out of stock and as their warehouses are rarely overflowing, their cost of storing goods is also significantly reduced. This strategy is one of the factors that sets UNIQLO apart from most of its competitors because the just-in-time systems prevent them from overproducing certain designs that have quickly disappeared from people’s interests and they can quickly stop them from being manufactured.

To add to how they operate, UNIQLO currently uses and continues to expand their online to offline services which integrates their physical store to digital platforms to continue servicing their customers even if they wish to stay indoors or not spend so much time outdoors. Customers have the option to choose what they want to buy through UNIQLO’s mobile application or website and have the items delivered right to their doorstep or they can arrange it to be picked up at the nearest UNIQLO store.

If stocks are not available – which rarely happens except if UNIQLO is just clearing their inventories – a customer service representative or an in-store staff will assist the customer in finding and having their desired clothing item delivered. Taking advantage of the boom of e-commerce in this pandemic gave UNIQLO an advantage as they have easily bounced back. Their online to offline service boosted their sales and made it easier for them to collect and address issues that customers put forward.

Conclusion

UNIQLO puts its customers first in order to make it easier for its planning team to know which direction they will be going in the next season. This in turn also makes it easier for their suppliers because prioritizing the customers’ feedback reduces the chances of producing excessive unwanted garments – which they repurpose but of course, avoiding it will lessen the costs. Planning way ahead of time with the help of their customers’ opinions ensures that their suppliers will not have to worry about over or underproducing a specific material or product.

The way UNIQLO handles their inflow of supplies and their proactive relationship with their customers is really one of their core strengths as a fast fashion clothing company. Providing customers with high-quality casual wear that is made according to their seasonal desires or opinions and preventing oversupply or wasted garments is truly a feat to commend. UNIQLO has devised a way to cater to their customers and at the same time prioritize their suppliers’ grievances if they are ever to suddenly make a change in production.

UNIQLO continues to innovate and develop more ways to find common ground where they can reach the best outcome for customer satisfaction and protect their relationship with their suppliers. As UNIQLO seems to always aim for the best not just for their company but for their stakeholders as well, they never seem to run out of ways to adjust to the current environment their industry is exposed to.

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References

Roll, M. (2021, January 1). Uniqlo - The Strategy Behind The Japanese Fast Fashion Retail Brand . Martin Roll. https://martinroll.com/resources/articles/strategy/uniqlo-the-strategy-behind-the-global-japanese-fast-fashion-retail-brand/

UNIQLO Business Model | FAST RETAILING CO., LTD. (2020). 株式会社ファーストリテイリング ©2021 FAST RETAILING CO., LTD. https://www.fastretailing.com/eng/group/strategy/uniqlobusiness.html

Wei, J. (2017). Study on Supply Chain Management of UNIQLO--Based on Quick Response. Proceedings of the 2017 7th International Conference on Mechatronics, Computer and Education Informationization (MCEI 2017), 1–5. https://doi.org/10.2991/mcei-17.2017.19

Wilding, R. (2016, February 9). The Secret Behind Zara and Uniqlo’s Supply Chain Models. The Leadership Network. https://theleadershipnetwork.com/article/zara-uniqlo-supply-chain

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