Article Analysis Essay on "UNIQLO's founder plots a way to beat Zara and H&M"

Introduction

The article "UNIQLO's founder plots a way to beat Zara and H&M" has outlined major ideas about the operation and success of Uniqlo as articulated by Tadashi Yanai who is its founder and the chief executive officer. According to Tadashi, every business organization should be guided by a vision which defines the values and expectations. For instance, this is evidenced by his confirmation that Uniqlo is inspired and guided by the shelf 1987 autumn and winter collection. Moreover, the efforts targeted at ensuring the company provides fashionable products has seen it as the major British retailer (The Economist. 2019). Furthermore, according to the article, one is able to learn that the nature of a company's product determines its success and competitive ability. Uniqlo has described by the article is one of the companies that stock classic clothes that are fashionable every time. As compared to Zara, Hennes and Mauritz, Uniqlo offers fashionable clothes while the others remain behind.

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One aspect of entrepreneurship and business growth is the identification of opportunities. Moreover, it entails the projection of the future and trend in order to ascertain if the available opportunity is worth venturing into. Mr Yanai for example, despite having a solid base in Europe as his home, he considers venturing in Asia. According to him, Asia is characterized by rapid growth with millions of consumers attaining the middle-class status (The Economist. 2019). Such moves exhibited by Mr Yanai are healthy for the growth of a business. Nevertheless, it means incorporating predictions and future analysis of investments. It does not matter the location and the origin of the entrepreneur but identification of potential opportunity for business to thrive. Expansion of business depends on exploring new areas and this can be confirmed through the article where Yanai considers establishing shops in India and expanding to Vietnam and other states of Thailand, Singapore and Indonesia (The Economist. 2019).

With proper analysis of the business population and location, a company can raise more revenues through international markets and distant markets as compared to its home-based shops and locations. However, such revenues realized from the overseas investment will still remain beneficial to the home location. It is also worth noting that businesses tend to experience a reduction in profit realized within their original places of the establishment as compared to new ventures. This can be linked to the trend in the shrinking of the populations within the home locality and competition resulting from similar businesses. Countering the reduction in the profits realized in the home locality, the business through the management can consider establishing its branches in other location globally. Mr Yanai, for instance, affirms that in Europe, Uniqlo is closing down its stores as a result of the shrinking population (The Economist. 2019). However, due to its international expansion and boosted logistics, the company is improving its profits. Moreover, much of its revenues are realized from international shops established in India.

According to the article, the success of a business is not dependent on the history of a place on an aspect such as war and politics but on the taste and preferences of the consumers residing within the locality. With time perception of a place can change and therefore, investors should not be guided by the negative history of a place to the point that they become reluctant to invest. The article supports this argument by the findings that China contributed a lot of total international revenue to the Uniqlo Company despite its history of war (The Economist. 2019). Moreover, the consumers from China highly value the quality of products which is offered by the company. Nevertheless, for the success of a business in a new location, the management through its executives should learn the culture and the preferences of the consumers. As pointed out by the article, Uniqlo's management is well trained to understand the Japanese culture and alongside their business environment (The Economist. 2019).

Furthermore, for a business to thrive in new environments, it must tailor its products to meet the environmental requirements of such environments. These can incorporate factors like the prevailing seasons, weather conditions as well as cultural values. Uniqlo for example, in its attempts to conquer the rest of Asia, the company ensures its products are suitable for the warm weather conditions prevailing within the countries (The Economist. 2019). With regards to new environments, moreover, a company must understand the culture of such places after which products are designed to meet the values preferred by the society to avoid clashing which would mean low sales.

Another important factor for the success of a business in external markets is the already existing markets which provide opportunities for advertisements and marketing. This implies that venturing into new markets requires gradual transitional period starting by establishments of smaller branches representing the company. The article supports this argument by affirming that one of the factors for Uniqlo Company to succeed in Asia is attributed to the fact that it had already established its business model and firms which aided its introduction to the market (The Economist. 2019). Moreover, effectively venturing into new markets more so internationally, requires the business company to form a partnership with the already existing companies in order to understand the business environment. Furthermore, it calls for collaborations with the designers, suppliers and producers of the newer market who are well conversant with the consumer's taste and preferences.

The company management through the officials such as the CEOs and managers should be well conversant with the languages used by their employees as well as the customers for the success of business new markets. Communication is an important factor for the smooth operation of a business company. It ensures proper coordination of processes alongside establishing a positive image of the company to the customers and the surrounding communities. Nevertheless, through proper communication with the employees, the CEOs can introduce changes in the company to meet the taste and the requirement of the consumers. Proper communication should also extend and be manifested between the management and the customers to ascertain the feedback from the consumers. Similar communication practices are evident between Mr Yanai as the CEO of Uniqlo and the employees as well as the customers. Through this, he is well conversant with the dresses and skirts preferred by the customers (The Economist. 2019).

The greatest impediment towards the expansion of business into an international level is the backlash against free market globally. Social and political reactions against international markets are major obstacles for international investment. This is because they limit the movement of people and goods across the countries. Moreover, it interferes with the distribution and supply channels alongside workers. However, with proper strategies, businesses should be able to cope and adapt to such environments. The mechanisms can involve compliance with international rules and regulations as well as government policies. Uniqlo represents some of the business companies which have been able to survive and thrive in a negative political environment experienced in China and Japan.

Reference

The Economist. (2019). UNIQLO's founder plots a way to beat Zara and H&M. [online] Available at: https://www.economist.com/business/2019/02/09/uniqlos-founder-plots-a-way-to-beat-zara-and-h-and-m [Accessed 27 Feb. 2019].