uniqlo business plan for south africa

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BUSINESS PLAN ieseg: MIB - 2012 SOUTH AFRICA 1

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Business plan for Uniqlo market entry strategy

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Page 1: uniqlo business plan for south africa

BUSINESS PLAN

ieseg: MIB - 2012

SOUTH AFRICA

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Page 2: uniqlo business plan for south africa

Marketing presentation @ IESEG 2012

Sireesh PALLIKONDAJuliana CASTRO Karen PORTUGALlXington LI

ieseg: MIB - 2012

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Index

4Executive Summary

6Introduction of Uniqlo and South Africa

7Customers and Demographics

9Product, Price, Promotion and Place

13Competitor analysis

14SWOT Analysis of UNIQLO

16Strategy and conclusion

17Bibliography

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Summary This report aims at Market entry strategyand competitive analysis for uniqlo in South Africa.

This report is intended to through a light on Uniqlo’s marketing strategy in entering South Africa. The report also demonstrates the market in which Uniqlo is playing and what different ranges they offer. Uniqlos ideal customer and demographics are explored and any issues or trends that effecting this group of people. This report will investigate the brand competitors and their strengths and weakness along with Uniqlo’s strength, weakness, opportunities and threats.

The annual report of uniqlo can be found from their website. Uniqlo is very aggressively expanding world wide with aim that the company would target annual group sales of 5 trillion yen (about 61.2 billion US dollars) and pretax profit from operations of 1 trillion yen (about 12.2 billion US dollars) by 2020. Their vision is reflected in action by expanding allover the globe. In this academic report we developed a strategic analysis for Uniqlo to enter SA.

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Objectives Developing a Successful business plan With the competitive analysis data.

South Africa is a middle-income, emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy, and transport sectors; a stock exchange that is the 18th largest in the world; and modern infrastructure supporting a relatively efficient distribution of goods to major urban centers throughout the region. Interesting fact of South Africa is its demographics with a median age of 25years, which perfectly gears the target market of UNIQLO, 67% of the population in S.A is urbanized. Most populous cities of South Africa are Johannesburg and Cape Town with a climate of sunny days and cool nights.

Objective of this paper is to present a successful model for entering into and South Africa and develop a business plan with help of competitive data analysis.

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South Africa

South Africa is one of the growing economy in the world, the changing regulations of the trade and commerce are making it more lucrative destination for foreign investors. As we can see from above political map and the statistics, that it is safe to do business in S.A, unlike in other sub-Sahara African countries.

South Africa is very young with the demographics of median age as 25 years. And the income levels belong to upper middle class. South African can be developed as hub for the distribution in future to enter the markets of Middle East and Latin America.

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TOPIC RANKINGS DB 2012 Rank DB 2011 Rank Change in Rank

Starting a Business 44 74 30

Dealing with Construction Permits 31 31 No change

Getting Electricity 124 122 -2

Registering Property 76 90 14

Getting Credit 1 1 No change

Protecting Investors 10 10 No change

Paying Taxes 44 18 -26

Trading Across Borders 144 146 2

Enforcing Contracts 81 85 4

Resolving Insolvency 77 79 2

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Customer

It’s quite hard to define uniqlo’s ideal customer as they cater many age ranges and can create so many different styles but it is suggested that their ideal customer would be a women at the age of 24-26. She would be living with her partner but not have any children yet, and therefore have some disposable income to spend on clothes. She would buy work clothes and fashion items from Uniqlo.

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Demographic Issues and trends

Uniqlo as a brand believes people should not be dictated, and should have the opportunity to create their own exclusive styles with clothing. Currently a very prominent trend is to have uniqlo clothing style, as no one wants to look the same as any one else. Uniqlo always supports this trend by not forcing fashion on their customers. The T-shirts are very important part of person’s style and slogans on a T-shirt can represent how that person thinks are feels. The median age of demographics in SA is 25 years. The population diversification and projections can be seen from the above statistics.

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Product and Customer Perception

Uniqlo offers basic casual clothing, which can be worn at work in the gym, while doing house work or just relaxing at home. They have also included more fashionable pieces such as skinny jeans and a long knit cardigan, which means costumers, can buy all their fashion essentials and basics from one store. This means shoppers will regularly visit the stores because the prices are relatively low shoppers can effort to buy some thing every time they enter into the shop. Uniqlo jeans has been very popular recently especially because of their offers such buy one get two. Cosumers buying decisions are heavily dependent on weather conditions and seasons. UV clothing is a special design wear for sunny days. “I like the simplicity and quality of the clothing — and the colors and the prices,” “I think their customer service and the way they approach the brand and treat their people is really honorable. I was flattered when they asked me to do it.”(Susan Sarandon on WWD Issue 09/06/2011`)

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Price

Uniqlo aims to keep their price low but the quality of garments high. They have succeeded well in this endeavor by introducing new offers on their garments such as buy one get one on men and women’s cotton cashmere sweaters and jeans. Customers perception of Uniqlo price is very positive as one pickup a complete good quality outfit for less than $ 60 which is very rare on the high streets.

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Distribution

Uniqlo coordinates and maintains control over the entire production process from manufacturing to sales, including planning, development, and purchase of materials, manufactures distribution and retail of their products. Uniqlo regards its clothing sub contractors as its business partners bounded by strong ties of trust” this ensures they can oversee all points of development and intervene if needed to ensure the production of high quality garments. Uniqlo are very conscious in caring for the environment therefore they have worked to increase efficiency of distribution of their stock. They have reduced the weight of cardboard boxes used in product transport to improve distribution loading efficiency and reduce carbon dioxide emission. They are also working on recycling and using hangers in order to reduce waste.

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Promotion

Uniqlo values more for humanity in process of this they are helping the undeveloped people of the country. We plan to choose athletes who have good potential and lacking the financial support, in order promote them to be a successful sport person and those who succeeded will be brand ambassadors for Uniqlo promotion the good image of the bran in South Africa and around the word. Our strategy of campaigning is based on Native African women, as Africa is more dominate by the native population, women will relate more somebody from their own race, creating a competitive advantage in connecting with south Africans.

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Competitor analysis

BRAND STRENGTH WEAKNESS OPPORTUNITY THREATGAP Womens, mens

and kids, home ranges.Clothes appeal to wide audience.Help charity with (product) red.Do interesting colorations such as vespa.Good range of denims

No SA website.Not completely fashionled.Stopped eye catching TV ads.Do not make use of new exiting technology.

Adhere to fashion trends such as skinny jeans.Start another TV companying.Make use of new technology such as pop stores.Selling limited edition products.

Economic crisesBankruptcy Competitors

ZARA Very fashion led.Very popular among Europe.Men, women and kidsHave organic range of clothes.

Not very exiting campaigns.Tired and boring stores.Plain garments.Not much media.

Create more exiting campaigns.Collaborations to make clothes more appealing.Revamp stores.

Economic crisesBankruptcy Competitors

FOSCHINI GROUP

Womens, mens and kids, home ranges.Clothes appeal to wide audience.Support eco friendly with eco-leather

Tired boring stores.Plain garments.Not much media

Create new and exiting campaigns.Collaborations to make clothing more appealing.

Economic crisesBankruptcy Competitors

FASHION EXPERT

Gets lot of press coverage.Very popular with young generation.Men, women and kids

Donot appeal to older age range.Not much attention on collaborations

Could advertise the band to older people for sport wear.Make interesting collaborations.

Economic crisesBankruptcy Competitors

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SWOT ANALYSIS

STRENGTHS• Cheap prices for quality products• Special offers• Economical essentials and basics• Caters for all young and old• Numerous variety women, men, children,

baby, home and accessories • Internationally successful• Striking add capanges • All ways trying new ways to selling products • Trying to be environmental friendly in

manufacturing and distribution of their products,

Weakness • Clothes are quite plain, no

patterns • Not all clothes and ranges

are available on website• Don’t sell every range in

every country.

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Opportunities • Growing economy• Friendly business environment• Above medium level income group• Multicultural country• Turist places• Demographic avarege is 25 years

old.

Threats.• Government wants to export

more than import• Import duties on clothes are high• Long distance between stores• Competing brand are already

positioned

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Strategy and conclusion

After brief analysis, our team comes to a comprehensive decision of launching uniqlo as subsidiary. As per the World Bank report of doing business in South Africa stands 34 and in the recent years complexities have been reduced to a large extent.

Initial operations can be established with a popup stores. These stores can give more accurate picture of South African consumer. Evaluating the demographics data leads us densely populated cities.

Johannesburg and Cape Town are two cities with more population. The strategic decision of choosing Cape Town is because of its port infrastructure and Johannesburg being the most developed city in S.A, this city has highest disposable income. As these two cities are known for tourist destination, lot of floating market is expected. These cities will be perfect place for Uniqlo business model of “continuous innovation of shopping” because high usage of internet in this cities than any other place in South Africa.

The target market is young people because majority of the population in South Africa is young falling in the demographics of 25 years. The competitive brands are very new in S.A. Hence its great chance to penetrate into the markets. With all the available data and established distribution channel of uniqlo, It can generate good business in South Africa.

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Bibliography

http://www.uniqlo.com/fr/ (10/02/2012)http://fr.wikipedia.org/wiki/UNIQLO (10/02/2012) http://www.fastretailing.com/eng/group/strategy/ (11/02/2012) http://www.doingbusiness.org/data/exploreeconomies/south-africa/ (12/02/2012)http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/SOUTHAFRICAEXTN (12/02/2012)http://www.statssa.gov.za/ (12/02/2012)http://www.gap.com/ (17/02/2012)http://www.zara.com/webapp/wcs/stores/servlet/home/fr/fr/zara-S2012(16/02/2012)http://www.tfg.co.za/ (15/02/2012)http://www.benetton.com/ (15/02/2012)http://www.southafrica.info/business/trade/(12/02/2012)

Photos http://www.menageresdemoinsde50ans.com/uniqlo/(11/02/2012)http://fashionindie.com/uniqlo-jeans-spring-2010-campaign-christian-brylle-paolo-anchisi-viggo-jonasson-by-inez-vinoodh/(11/02/2012)http://www.pinoyborian.com/2011_11_01_archive.html (11/02/2012)

http://www.google.fr/imgres?q=uniqlo+offers&um=1&hl=fr&biw=1280&bih=653&tbm=isch&tbnid=ysNWD-_JiJL6lM:&imgrefurl=http://www.shoppingnsales.com/2012/02/17/17-feb-1-mar-2012-uniqlo-promotion/&docid=xWeXdN5pYZTs7M&imgurl=http://www.shoppingnsales.com/wp-content/uploads/2012/02/20120217-Uniqlo-Offer.jpg&w=1660&h=2356&ei=k1BAT8X2Oci_8wOg8925CA&zoom=1&iact=hc&vpx=857&vpy=65&dur=127&hovh=268&hovw=188&tx=84&ty=123&sig=110217865791676926739&page=2&tbnh=147&tbnw=104&start=16&ndsp=25&ved=0CPcBEK0DMCc(17/02/2012)

http://www.google.fr/imgres?q=uniqlo+offers&um=1&hl=fr&biw=1280&bih=653&tbm=isch&tbnid=K-Pqzr_4tpHJRM:&imgrefurl=http://www.greatdeals.com.sg/2011/08/01/uniqlo-sale/&docid=8DXFmXQhPFh81M&imgurl=http://www.greatdeals.com.sg/wp-content/uploads/2011/08/uniqlo_jul-628x812.png&w=628&h=812&ei=k1BAT8X2Oci_8wOg8925CA&zoom=1&iact=hc&vpx=658&vpy=287&dur=283&hovh=255&hovw=197&tx=96&ty=184&sig=110217865791676926739&page=4&tbnh=152&tbnw=116&start=65&ndsp=22&ved=0CLUDEK0DMFQ(17/02/2012)

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