The Success Secrets of Japan’s Richest Man from UNIQLO

The Topic of May seminar named “The Success Secrets of Japan’s Richest Man from UNIQLO”, which organized by An Executive Study Group under the Chinese University of Hong Kong (CUHK) and the Hong Kong Science and Technology Parks Corp (HKSTPC) on 6 May 2011.

Mr. Mark Lee (MBA, CUHK) presentation content included “UNIQLO profile”, “Sales and Marketing Strategy”, “Operation and People Strategy”, “Strategic Value Chain Analysis”, “Global Strategy” and “Group Discussion”.

Firstly, he introduced Mr. Tadashi Yanai who was the Japan richest man for two consecutive years and his company named “UNIQLO” which was a casual-wear retail chain with a simple objective to let customers shop like buying magazines and CDs without pressures.

High growth rate and large market share was observed in UNIQLO. UNIQLO was number 4 in the ranking of worldwide apparel specialty stores.

Mr. Mark Lee said Tadashi asked for a private meeting with GIORDANO’s Jimmy Lai in Hong Kong in 1986 to learn how Jimmy could run business so successfully. He learnt virtual value chain strategy, outsourcing manufacturing and detailed production controls. Until 2010, comparison of 5yr sales growth between GIORDANO and UNIQLO were 1% and 16%, respectively.

Mr. Lee mentioned Prof. Michael Porter’s positioning strategic which employed in UNIQLO’s Sales and Marketing Strategy. They were:

1. Value-for-Money Strategy

- Mix-and-Match smartly to show own taste

- High quality with low price for mass

- Competitive advantage

- Appealing to young customers

2. Hot-Item Driven-Sales Strategy

- Focal point

- Disruptive innovation (Function/Cost Leadership)

- Side benefits (Cross-selling of other products)

- Hot-items (e.g. Fleece in 2000, Heat Tech and Bra Top in 2008)

Then Mr. Lee mentioned Prof. Clayton M. Christensen’s Disruptive Innovation. UNIQLO’s hot-items were employed this strategy. UNIQLO had a strategy call Two-Ends Strategy.

For Low End Side, it was redefined what is low price.

For High End Side, UNIQLO employed top people to launch a new brand for more economic price for very high quality product.

After that Mr. Lee introduced UNIQLO’s operation and people strategy as follows.

One of strategy called “Demand Driven”. The idea was to capture customer needs fast rather developed the best-selling products. The other strategy called “Super-Star Store Manager”. Tadashi Yanai said “The success of store manager is more important than CEO.”

Moreover, they used factory technical advisor whose had over 30 years of manufacturing experiences from knit to dye, woven, cut and sew.

Value Chain of Prof. Michael Porter was used to match UNIQLO’s strategies. Prof. Michael Porter said “The competitive value of individual activities cannot be separate from the whole.”

UNIQLO’s goal in China was found very aggressive because a significant growth of affluent class in China was observed.

After that talk, we had an exercise to find out two UNIQLO’s most useful strength and one of the most useless strength in China.

Reference:

The Centre for Logistics Technologies and Supply Chain Optimization, CUHK: http://www.logitsco.cuhk.edu.hk/

HKSTP - www.hkstp.org