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uniqlo business plan for south africa

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Business plan for Uniqlo market entry strategy

Business plan for Uniqlo market entry strategy

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  • 1. BUSINESS PLAN SOUTH AFRICA 1 ieseg: MIB - 2012
  • 2. Marketing presentation @ IESEG 2012Sireesh PALLIKONDAJuliana CASTRO Karen PORTUGALlXington LI 2 ieseg: MIB - 2012
  • 3. Index 4 Executive Summary6 Introduction of Uniqlo and South Africa 7 Customers and Demographics9 Product, Price, Promotion and Place 13 Competitor analysis14 SWOT Analysis of UNIQLO 16 Strategy and conclusion17 Bibliography 3 ieseg: MIB - 2012
  • 4. SummaryThis report aims at Market entry strategyand competitive analysis for uniqlo inSouth Africa.This report is intended to through a light on Uniqlo’s marketing strategy in enteringSouth Africa. The report also demonstrates the market in which Uniqlo is playing andwhat different ranges they offer. Uniqlos ideal customer and demographics areexplored and any issues or trends that effecting this group of people. This report willinvestigate the brand competitors and their strengths and weakness along withUniqlo’s strength, weakness, opportunities and threats.The annual report of uniqlo can be found from their website. Uniqlo is veryaggressively expanding world wide with aim that the company would target annualgroup sales of 5 trillion yen (about 61.2 billion US dollars) and pretax profit fromoperations of 1 trillion yen (about 12.2 billion US dollars) by 2020. Their vision isreflected in action by expanding allover the globe. In this academic report wedeveloped a strategic analysis for Uniqlo to enter SA. 4 ieseg: MIB - 2012
  • 5. ObjectivesDeveloping a Successful business planWith the competitive analysis data.South Africa is a middle-income, emerging market with an abundant supply ofnatural resources; well-developed financial, legal, communications, energy, andtransport sectors; a stock exchange that is the 18th largest in the world; and moderninfrastructure supporting a relatively efficient distribution of goods to major urbancenters throughout the region. Interesting fact of South Africa is its demographicswith 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 areJohannesburg 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 SouthAfrica and develop a business plan with help of competitive data analysis. 5 ieseg: MIB - 2012
  • 6. South Africa TOPIC RANKINGS DB 2012 Rank DB 2011 Rank Change in RankStarting a Business 44 74 30Dealing with ConstructionPermits 31 31 No changeGetting Electricity 124 122 -2Registering Property 76 90 14Getting Credit 1 1 No changeProtecting Investors 10 10 No changePaying Taxes 44 18 -26Trading Across Borders 144 146 2Enforcing Contracts 81 85 4Resolving Insolvency 77 79 2 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. 6 ieseg: MIB - 2012
  • 7. CustomerIt’s quite hard to define uniqlo’s ideal customer as they cater many age ranges andcan create so many different styles but it is suggested that their ideal customerwould be a women at the age of 24-26. She would be living with her partner but nothave any children yet, and therefore have some disposable income to spend onclothes. She would buy work clothes and fashion items from Uniqlo. 7 ieseg: MIB - 2012
  • 8. Demographic Issues and trendsUniqlo as a brand believes people should not be dictated, and should have theopportunity to create their own exclusive styles with clothing. Currently a veryprominent trend is to have uniqlo clothing style, as no one wants to look the same asany one else. Uniqlo always supports this trend by not forcing fashion on theircustomers. 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 diversificationand projections can be seen from the above statistics. 8 ieseg: MIB - 2012
  • 9. Product and Customer PerceptionUniqlo offers basic casual clothing, which can be worn at work in the gym, whiledoing house work or just relaxing at home. They have also included morefashionable pieces such as skinny jeans and a long knit cardigan, which meanscostumers, can buy all their fashion essentials and basics from one store. Thismeans shoppers will regularly visit the stores because the prices are relatively lowshoppers can effort to buy some thing every time they enter into the shop. Uniqlojeans has been very popular recently especially because of their offers such buy oneget two. Cosumers buying decisions are heavily dependent on weather conditionsand 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 theircustomer service and the way they approach the brand and treat their people is really honorable. I wasflattered when they asked me to do it.”(Susan Sarandon on WWD Issue 09/06/2011`) 9 ieseg: MIB - 2012
  • 10. PriceUniqlo aims to keep their price low but the quality of garments high. They havesucceeded well in this endeavor by introducing new offers on their garments such asbuy 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 completegood quality outfit for less than $ 60 which is very rare on the high streets. 10 ieseg: MIB - 2012
  • 11. DistributionUniqlo coordinates and maintains control over the entire production process frommanufacturing to sales, including planning, development, and purchase of materials,manufactures distribution and retail of their products. Uniqlo regards its clothing subcontractors as its business partners bounded by strong ties of trust” this ensuresthey can oversee all points of development and intervene if needed to ensure theproduction of high quality garments. Uniqlo are very conscious in caring for theenvironment therefore they have worked to increase efficiency of distribution of theirstock. They have reduced the weight of cardboard boxes used in product transportto improve distribution loading efficiency and reduce carbon dioxide emission. Theyare also working on recycling and using hangers in order to reduce waste. 11 ieseg: MIB - 2012
  • 12. PromotionUniqlo values more for humanity in process of this they are helping the undevelopedpeople of the country. We plan to choose athletes who have good potential andlacking the financial support, in order promote them to be a successful sport personand those who succeeded will be brand ambassadors for Uniqlo promotion the goodimage of the bran in South Africa and around the word.Our strategy of campaigning is based on Native African women, as Africa is moredominate by the native population, women will relate more somebody from their ownrace, creating a competitive advantage in connecting with south Africans. 12 ieseg: MIB - 2012
  • 13. Competitor analysisBRAND STRENGTH WEAKNESS OPPORTUNITY THREATGAP Womens, mens No SA Adhere to Economic and kids, home website. fashion trends crises ranges. Not such as skinny Bankruptcy Clothes appeal to completely jeans. Competitors wide audience. fashionled. Start another Help charity with Stopped eye TV (product) red. catching TV companying. Do interesting ads. Make use of colorations such Do not make new technology as vespa. use of new such as pop Good range of exiting stores. denims technology. Selling limited edition products.ZARA Very fashion led. Not very Create more Economic Very popular exiting exiting crises among Europe. campaigns. campaigns. Bankruptcy Men, women and Tired and Collaborations Competitors kids boring stores. to make clothes Have organic Plain more appealing. range of clothes. garments. Revamp stores. Not much media.FOSCHINI Womens, mens Tired boring Create new and EconomicGROUP and kids, home stores. exiting crises ranges. Plain campaigns. Bankruptcy Clothes appeal to garments. Collaborations Competitors wide audience. Not much to make Support eco media clothing more friendly with eco- appealing. leatherFASHION Gets lot of press Donot appeal Could advertise EconomicEXPERT coverage. to older age the band to crises Very popular with range. older people for Bankruptcy young generation. Not much sport wear. Competitors Men, women and attention on Make kids collaborations interesting collaborations. 13 ieseg: MIB - 2012
  • 14. SWOT ANALYSISSTRENGTHS Weakness • Cheap prices for quality products • Clothes are quite plain, no • Special offers patterns • Economical essentials and basics • Not all clothes and ranges • Caters for all young and old are available on website • Numerous variety women, men, children, • Don’t sell every range in baby, home and accessories every country. • 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, 14 ieseg: MIB - 2012
  • 15. Opportunities Threats. • Growing economy • Government wants to export • Friendly business environment more than import • Above medium level income group • Import duties on clothes are high • Multicultural country • Long distance between stores • Turist places • Competing brand are already • Demographic avarege is 25 years positioned old. 15 ieseg: MIB - 2012
  • 16. Strategy and conclusionAfter brief analysis, our team comes to a comprehensive decision of launchinguniqlo as subsidiary. As per the World Bank report of doing business in South Africastands 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 givemore accurate picture of South African consumer. Evaluating the demographics dataleads us densely populated cities.Johannesburg and Cape Town are two cities with more population. The strategicdecision of choosing Cape Town is because of its port infrastructure andJohannesburg being the most developed city in S.A, this city has highest disposableincome. As these two cities are known for tourist destination, lot of floating market isexpected. These cities will be perfect place for Uniqlo business model of“continuous innovation of shopping” because high usage of internet in this cities thanany other place in South Africa.The target market is young people because majority of the population in South Africais young falling in the demographics of 25 years. The competitive brands are verynew in S.A. Hence its great chance to penetrate into the markets. With all theavailable data and established distribution channel of uniqlo, It can generate goodbusiness in South Africa. 16 ieseg: MIB - 2012
  • 17. Bibliographyhttp://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)Photoshttp://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) 17 ieseg: MIB - 2012