Uniqlo’s strategy for low priced apparel

An article in the New York Times (May 22, 2012) describes the Japanese apparel retailer Uniqlo’s low price strategy for T-shirts ($ 9.90) and cashmere sweaters ($ 79.90). The company claims that it does not follow fashion fads but, instead, reserves factory capacity and produces steadily year around. This manufacturing enables low prices in constrast to the chase trends and last minute production strategy. Given the fickleness of fashion, will Uniqlo’s strategy also demand a lower margin because their clothese may not be in fashion ? Is the risk of being wrong regarding trends balanced by the lower prices and this more assured demand levels ? Is the sharing of demand across their global retail base enable fashion demand risks to be mitigated ? Given their planned rapid expansion in the US to $ 10 billion in sales by 2020 from $ 1.07 billion now, do you expect their strategy to enable them to succeed ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , , , , . Bookmark the permalink.

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