Uniqlo Business Model

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Fast Retailing is the Japanese apparel retailing company which offers high-quality basic clothing at reasonable prices. The net sales were ¥929 billion yen and the operating income was ¥126 billion yen as of 2012 (Exhibit 1), which was ranked first for Japanese domestic apparel retailers and the fourth in the world (Exhibit 2). They have three main groups : “UNIQLO Japan”, “UNIQLO International” and “Global Brands”. The first two account for 83% of net sales and they are operating 847 stores in Japan and 359 stores in the world as of February 2013. Tadashi Yanai, the chairman of Fast Retailing, aims to achieve the world’s No 1 apparel retailer and increase its sales to ¥5 trillion yen by 2020, led by the UNIQLO brand. UNIQLO’s largest strength lies in its established Specialty store retailer of Private label Apparel (SPA) model (Exhibit 3), which encompasses all stages of the business from design and manufacturing, to logistics and final sales. The SPA model is a clear example of using Specialization Profit Model that UNIQLO has successfully deployed. The model, by definition, is a profit zone that is highly targeted, focused, or unique that is exploited for profit because of specialized knowledge, and requires high market recognition for talent. Some of common characteristics are lower cost through better knowledge; better price through unique design, better offering or volume of sales; improves or shortens selling cycle; rapid penetration through higher exposure; windfall profits due to replication of specialized knowledge through out the marketplace. UNIQLO has enjoyed strong growth by focusing on mass-producing affordable basics in dozens of colors, with high-quality casual wear based on its SPA business model. The Company has a distinctive business model which is very different from its rivals like Zara and H&M, who bring the latest fashions to the masses

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