Uniqlo: A Supply Chain Going Global – Competitive Advantage

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Case 7: Uniqlo: A Supply Chain Going Global
The fashion industry is among the most competitive industries globally, with each company seeking differentiation to remain competitive. Zara and H&M are the top leading retailers in the fashion industry, which have managed to remain successful over the years due to their effective strategies. Zara focuses on fast fashion, which heavily focuses on trends and the ability for the company to respond to market demands (Yen 4). Basing its production on the market trends, it has ensured sales remain high, with low operational costs enabled by the “short time-to-market” strategy. On the other hand, H&M focuses on seasonal selections, which means that their production entails long planning and designing process (Remy et al.). The company saves operational costs through a more controlled supply chain, leading to longer-shelf products than its competitor, ZARA (Yen 4). Therefore, while Zara’s supply chain is vertically integrated, H&M’s network is monitored from the head production offices.
Uniqlo was founded in 1984 and has grown to become the fourth-largest clothing retailer in the world in 20 years (Roll). Rapid success has been realized as a result of innovation and the ability of the company to adopt new ways of reducing operational costs. Uniqlo offers a blend of strategies implemented by H&M and Zara. A key competitive advantage is that the company based its production in mainland China due to low production costs, enabling it to maintain affordable product prices (Yen 5). To further streamline its production, the company focused on restructuring the supply chain to eliminate intermediaries, enhancing vertical integration (Shah). However, the issue of varied quality from different suppliers emerged. To address this, the company hired a performa...