Zara and Uniqlo

ZARA and Uniqlo

Dianna L. James

Independence University

MBA630

February 13, 2016

Introduction

        Within this writing are a number of questions that are answered by the sole opinion of the author. It is of this author’s logical thinking that these are answered from resources that were obtained from various author’s, websites, and publications. Question one has to do with the online presence of Zara and how they may change their business model to support their presence. Question two is the disparity between Zara and Uniqlo in the opening and/or number of stores they would have by the end of 2015. Question three research on production strategy for GAP, Mango and H&M then compare it to Zara and Uniqlo. Finally, which one aligns to me as a customer. Question four ask if I agree if Zara has an unstainable business model and if Uniqlo’s is boring.

Question One

Armorel Kenna stated that Zara is lagging in their online strategies when compared to other in the same industry. Inditex has drawn attention to Zara products through the use of promotional websites. Additionally, Inditex has used other company chains to draw the attention to Zara’s website. Zara has a Facebook page that highlights the new product line and have over 23,751,144 followers. In 2010 Inditex introduced mobile apps in order to customers and potential customers can browse the newest products in Zara’s line. “However, selling goods online, something the Gap (GPS) has been doing for more than a decade, is only now becoming a key part of its strategy to expand sales in the U.S” (Kenna, 2011, ¶ 2). Armorel Kenna went further to explain that Zara is long overdue at starting up the internet in the United States. It would be much cheaper for them to launch a website for customers in the United States to make purchases rather than open more stores.

Question Two.

Tadashi Yanai Fast Retailing’s CEO and Japan’s wealthiest man has a goal that by 2020 Uniqlo has revenues of $50 billion. He plans on this mission by selling low priced but fashionable products such as down jackets, jeans, cashmere sweaters, Oxford shirt and T-Shirts. Additionally, he plans on 1000 stores in the United States.  Uniqlo opened their first stores in the United States in 2005 with three stores in operation. As of November 2015 they have 42 stores open from the East to West Coast.

Zara boasts 2,000 stores, and Uniqlo has opened 1,400 stores. “Zara currently has 55 stores open in the United States, with a majority of its locations in Spain, where there are over 450 locations” (Parietti, 2015, Heading 1, ¶ 1).

Since the question gave the amount of stores for Zara, there was nothing needed to answer the question regarding the disparity. It is believed that the disparity comes from the audience in which Zara and Uniqlo serves. Zara serves for the most part a higher end group of customers, whereas, Uniqlo serves those customers in the lower to middle class group of customers. However, upper class customers can still buy from them, most of their sales would be generated from the lower to middle class. Furthermore, since Zara serves the higher end customer base, they have to be more select. Such as those individuals that live and work in Jackson, TN would not fit into their customer base as those that live and work in New York City, NY. Because, Jackson, TN has more middle class people, whereas, those that live New York City or it surrounding cities, make higher wages, true the cost of living is more, however, most of those people are in the business professionals, brokers for Wall Street, or Theater. New York City is also known for its modeling agencies.