Case study ENT300

FUNDAMENTALS OF ENTREPRENEURSHIP
(ENT300) CASE STUDY

UNIQLO(MALAYSIA) SDN BHD
WHOLLY OWNED SUBSIDIARY

FACULTY : APPLIED SCIENCE
PROGRAME: AS1205A
SEMESTER : 5
PROJECT TITLE: UNIQLO BRANCH IN MALAYSIA
GROUP MEMBERS: 1. KHAIRIN NABILAH BT MOHD

YELSOP (2017404078)
2. NELLY KIMBERLY NELSON

(2017802797)
3. SITI ZUELAIKHA BT KIPRAWI

(2017635296)
4. SAHIDDAH BT DAHALAN

(2017319101)
5. HOLYDIANA LENNYA AK EDWARD

(2016481946)
PREPARED FOR: DR SITI MARDINAH ABD HAMID
SUBMISSION DATE : 17/04/2020

EXECUTIVE SUMMARY

For our case Study, we would like to summarize about UNIQLO which are the clothing
company. This clothing company is familiar especially for the university students such as
UNIMAS AND UITM SAMARAHAN and others too. The location of the company is quite
strategic as it is located in a main mall building, such as Vivacity Megamall, The Spring
Shopping Mall and AEON Mall Kuching Central. UNIQLO provide high quality, performance-
enhanced, basic casual wear at the lowest prices. Its clothing is up-to-date and fashionable,
but not trendy. Its fabric innovation and in-house design provide exceptional and unique
functional performance. It was originally founded in Yamaguchi, Japan in 1949 as a textile’s
manufacturer. Now it is a global brand with over 1000 stores around the world.

Based on the observations made, we found this company provide appropriate clothing
for all ages. It sells clothing, not fashion. Unlike competitors Zara and H&M, which produce
hundreds of different trendy products each season, UNIQLO’S staples are jeans, sweaters,
jackets, etc. UNIQLO does not pay attention to trends. It sells pieces that fit seamlessly into
the customer's wardrobe. Which means more to nice, comfortable and affordable to own.
UNIQLO has achieved a fair bit of success over other brands but despite its huge success so
far, UNIQLO faces its own global business challenges.

As a conclusion that can we make, if UNIQLO company want the challenges they face
resolved, they need to review the small problems that make their business in one place less
prosperous and need to be resolved quickly before affecting other things such as resizing for
Americans. So there is no record of UNIQLO bad reputation will happen. We can say UNIQLO
can go more further success then other brand of clothing in the entire of world including
Malaysia too. By doing these case study we being exposed how to overcome all the problem
without obstacle and excuse. The things we learned from the case study will led us to become
more independent and become successful entrepreneurs.

1.0 INTRODUCTION

Entrepreneurship is a process of innovation and new venture creation through four major
dimensions including the individual, organizational, environmental and process. The
entrepreneurship process is aided by collaborative networks in government, education and
institutions. But it mostly about how to overcome the problems that face by the company and
increase the profit for every year and it also offering creativity to create a new products or
services.

This case study is conducted in order to have a better look into the world of
entrepreneurship. There are few large companies that has set their foot in Malaysia. Through
this case study, it enables us to see further development of certain companies which has set
their foot in Malaysia with the knowledge in entrepreneurship. This includes in looking into
their problems and achievement.

We have chosen UNIQLO stores in the Vivacity Megamall as our case study. The
UNIQLO company was established on 10 June 2010 in Malaysia and the UNIQLO stores at
Vivacity has been launch on 12 December 2015.

According to the general information that we obtained, this company has opened few
branches in Malaysia such as in Kuala Lumpur, Selangor, Putrajaya, Johor, Pulau Pinang,
Pahang, Melaka, Perak, Kedah, Negeri Sembilan, Sabah and Sarawak. In Sarawak, there are
only 4 branch that opened. Their overall income in a year might achieve to RM 374750 billion
because their business is on going everyday with sales that

Based on our investigation, we realised that UNIQLO facing a few problems that mostly
related to global problem which one of their biggest dilemmas is probably brand differentiation
as it tries to be “everything for everyone”. The fact that, there are a lot of difference in culture
and the weather in each country causing them to face this dilemma and the sense of fashion
design is slightly more targeting younger generations.

Next, they are facing problem in expanding their market globally. They did not perform
enough research for each country such as United States even in Malaysia itself. As an
example, the winter that they released were also sold in Malaysia. Their sales in Malaysia
drop during the collection is released. This is due to not looking well into the weather of
Malaysia. Since there are no valid reasons for people in Malaysia to buy this collection. The
collection does not sell well.

This problem occurs when we are observing more into UNIQLO branches in Sarawak,
where, there is not much customer attracted to shop their clothes from this company. Here
are few reasons why this problem occurs. One of it, not all people in Sarawak able to pay for
this attire as they are various opinion where the price can be called as affordable. Second,
this company only has 4 branches in Sarawak. Therefore, the others from certain division
need to travel far just to buy this exclusive apparel. Lastly, when looking further to the sense
of fashion that being sell, only youngsters mostly likely to be attracted to the collections. There
are only certain that is wearable for the adults.

2.0 COMPANY INFROMATION
A. Background

Uniqlo is a clothing apparel company which is founded in Yamaguchi Japan in 1949 as
the textiles manufactures. Uniqlo in Malaysia is a joint venture between Fast Retailing
Company Ltd and Wing Tai Clothing Sdn Bhd. It is derived from contraction of our original title
Unique Clothing Warehouse and has come to stand for high quality which is unique product
at extreme prices. It is believe in democratization of fashion epitomized by life wear philosophy
as we inspire that the world to dress casually. The goal of this uniqlo concept is to create the
a generation of global leaders prepared for new world.

The first Uniqlo store open in Malaysia was on 4 November 2010 which located in
Fahrenheit 88 Store Bukit Bintang Kuala Lumpur that are originated from Japan. This store
was the most vibrant commercial district in the national capital of Kuala Lumpur which have
about 2,140-sqm. Fahrenheit 88 Store was fully convey the appeal of the UNIQLO brand. The
specific address was given at No 179 Jalan Bukit Bintang 55100 Kuala Lumpur Malaysia. On
31 March 2020 the updated number of uniqlo store opened in Malaysia was 49 stores.

In this case study ,our group choosing the Uniqlo store that located in Kuching at Lot
L1-062 , L1-063 and L1-064 Vivacity Megamall Jalan Wan Alwi 93350 Kuching Sarawak. This
store are clothing retailer which producing a collection of casual wear and also accessories
that are suitable for men , women and children. It is known as a world famous simple and
clever product producing for anyone that wants to be a high standard person. This means that
their clothes are affordable , functional and innovative.

The management team of this store are include the manager , accountant , human
resource , outlet crew and sales assistance. The mission of this store is to unlocking the power
of clothing where by they are aiming for the harmony and sustainable stewardship of natural
resources because they believes that their clothes has the power to change people for having
better world. The vision of this company is to became the number 1 clothes retailer in the world
wide.

This vision help them to believes that they can be one of the best seller that can
provide their customer with best service experience and customer driven which their customer
will be the first one to be treated. The principles of this store is inspired by the Fast Retailing
Group mission as they can do anything for their customers which means their employees are
able to interact directly with the customers. Second they conduct their business are based on
the current marketplace , products and facts. They will always focus closely on the current
marketplace , products and facts that happen around them. They have to observe and being
attentive on what is happening around them so they can analyze the problem and possibilities
to overcome their problem.

B. Organizational Structure

The board of directors are include Tadashi Yanai as Chairman and CEO of this store.
The external director and external board member are both known as Toru Hambayashi and
Nobumichi Hattori. While Masaaki Shintaku and Takeshi Okazaki are given as external
director and internal director.

The standing statutory auditor of this company was known as Akira Tanaka and Masaaki
Shinja while for the external statutory auditor known as Keiko Kaniko and Takao Kashitani.

C. Business Model

Uniqlo is known as SPA (Specialty Store Retailer of Private Label Apparel) which means
their activities are based on fulling integrated through production and retailing. This means
that they would produce their own clothes and sold it with high quality product at low price.
Other than that , SPA also allowed them to control the entire process from product planning ,
production , distribution and marketing. Uniqlo was grown from one to more than 1300 stores.

They are known as global clothing retailer and is soon to overtake the H & M store and
also Zara as the largest global clothing retailer. The concept of this company is based on the
monopolistic competition market structure which characterize the monopolistic competition by
large number of firms selling differentiated product from industry.

D. Product or Service

Uniqlo store are mainly sold three main of product for their customer which include
women , men and children. The product of this store are include jeans , knit wear , fleece ,
blouse , winter jacket , dresses , inner wears , belts , bags , pants , shirts and caps which
made from linen , chiffon and cotton. There are three outwear product , tops and bottoms.
Jackets , hoodies ,coats and parkas are some of the example for outwear product. Jacket are
the most famous product because it is extremely thin and comfortable to be use in any
occasions. Tops category is more to the functional and comfortable wears such as dresses ,
shirts , blouses , sweaters and cardigans. Sweater and cardigan are the styles made for
women because it is made up from cotton. While for the bottoms category includes shorts ,
skirts , jeans , casual bottom , lounge bottoms and ankle pants. This are suitable for both men
and women because it is the most simple shorts for any lifestyles needed.

Uniqlo company are also provide a customers service for the customers if they having
problem at their choices or buying process. For example the company gave their phone
number for further assistance if the customers are having problem on their buying order such
as online order. While in the shop , their sales assistance are available for giving their hands.
For the shipping service , they are using FedEX to ship out their customers order and will take
3 or 4 days of shipping. They are given knowledge when having customers on their shop such
as greets their customer with smile and polite. Shopee and Lazada are also one of the example
shipping that they used to ship out their customer orders.

E. Business , Marketing and Operational Strategy

The business strategy are more focus to design their own clothing with best selling and
manufacture every single item by themselves so that they can keep their high standard and
reasonable price. Other than that they are decided to open more store in other countries based
on the condition and situation which offering a different selection types of clothes. This helps
to provide a selection of choices to customers based on their income. The reason why is
because they having some limitation while conducting the survey. For example some people
are not aware of the brand and they prefer to buy products with best quality and high price
instead of buying product that have good product and low price.

Marketing strategy in this company are focus to people that having low income to middle
income that suitable for anyone. Other than that they are also designing clothes for trendy
young urban professionals teenagers. The price that they offered are more convenient and
cheap compared to other store that selling a design from overseas. This is why their budget
are more conscious for anyone. Although they have a basic design product but they still unique
because their option are more reliable and cheaper for customers that cares about price and
quality. Another marketing strategy made by this company is through promotion from social
media such as Facebook so their customers are able to reach their company easily. This
company are also conducting a campaigns to promote their product. As for example are Ultra
Light Down , AIRism and Haettech. In other hands they are also giving a discounts for their
selling up to 20% - 30% on the keys ranges.

Operational strategy that they comes with is by making a fashionable and high quality
clothes that anyone can wear anytime. The global operation system create together from all
product of process to final sales. This include the world class quality material. Other than that
they are also choose the strategic location to open their store. For example the Uniqlo store
in Vivacity is known by the resident inside and outside the Kuching because it was the most
easy shopping mall which having a lot of facilities.

F. Financial Achievements

The financial statement for Uniqlo’ s store in a year can be reach up to
Rm6038075431.00.This is the global brands for revenue selling while RM145010484.00 for
the operating profit that they have. The financial achievement of this store are also expected
to continue stable and growth more widely based on the reasonably price brand. They are
also intend to strengthening their e-commerce for their opening new stores. As for this they
are also having an income taxes which they need to paid in a year. The amount that they need
is Rm186000 billion. 29.5% is known as the fee for effective corporate tax rate after their tax
effect accounting. This condition are due to the growing of contribution from Uniqlo
International to others countries which subjectively giving the lower tax rates in their company.

Based on the Fast Retailing market , their capitalization can be more than USD 57.7
billion in a year and they have about up to 52000 people globally whose employs it. It has
been growth at an incredible rate during the past five years with their revenue forecast of 4.8%
growth. The global management magazine states that Uniqlo ‘s company has the most
valuable brand which in the 84th on the list because of their strategy on customer culture.

5.0 COMPANY ANALYSIS Weaknesses
Strengths

1. Uniqlo is Japan's leading clothing 1. Despite being a popular brand it has
retail chain in terms of both sales a limited brand recall
and profits.
2. Bargaining power of customers is
2. The company also operates in high hence brand switching affects
nearly 15 countries worldwide value

3. Offer very discounted prices which 3. Product variety and launching based

increase footfall in store on the four seasons

4. Strong presence in international 4. Higher cost due to import tax and
market currency conversion

5. Uniqlo had begun outsourcing their 5. Rented Property: A significant
clothing manufacturing to factories proportion of the property that
in China where labor was cheap, a UNIQLO owns is rented rather than
well-established corporate practice purchased. It has to pay large
amounts of rent on these adding to its
6. A strong workforce of over 30,000 costs.
employees

Opportunities Threats

1. Good brand image could leverage on 1. Increasing competition from domestic
that and increase product portfolio market and global players
along with clothing
2. Strategic cost leadership is not long
2. The brand can promote itself by viral term sustainable
advertising and aggressive social
media usage 3. Regulation in different countries for
FDI pull on aggressive growth
3. High opportunity in campaign in
various sports events 4. Consumer tastes are changing, and
this puts pressure on companies to
4. Regulations have loosened in recent constantly change their products to
years making it easier for businesses meet the needs of these customers.
to carry out their operations.
5. The fluctuating interest rates in the
5. Globalisation: Increased globalisation country do not provide a stable
does not restrict UNIQLO to its own financial and economic environment.
country. It can extend its operations to
other countries, entering into these 6. Substitute products available are also
markets and making use of the increasing, which is threat collectively
opportunities that lie in these markets. for the whole industry as consumption
of current products decrease.

6.0 BUSINESS PROBLEM
1. The development of marketing size in USA

As Asia emphasizes their speed of growth , the UNIQLO performs in well in most Asian
countries. However, imports and a minority have a significant impact on United States. There
may be several reason why it is difficult to meet the different needs and preferences of the
Asian brand developer in Western countries, mainly because the brand has “Asian style” sign.
As you know, it is always the smallest in UNIQLO. The design is quite simple and even a flash
kit stores. Minimalism is a kind of popular culture in Japan, but it really makes sense is known
UNIQLO quickly, and 1000, and H, such as in United States, Zara.

2. Size of the clothes and the climate changes

As we all know, every country has their own personalities. Asian people are generally
having a quite small types of body whereas American people are much more bigger. So this
problem can occur when the company of Uniqlo are trying to design the clothes for their
another branches around the world. Uniqlo concept is retrieve from Japan. The Japanese
people are mainly having a small body. Size clothing problem would cause the company not
having enough fabric to full fill all the needs which they have to focus more to the design
and shape of the clothes. Some theoretical logical states that they have proposed the
solution to the any confusion about this sizing problem. For example the standard size and
universal size for each design or brands. Climate changes around the world for each
countries are different from each other. Some times the UNIQLO shop in Malaysia are
selling a winter jacket which is not suitable to be used in our weather. While in Japan they
have four season of weather.

3. Human Resource Issues

The employees that work in the company are known by business ‘ s human resource.
Their jobs are very important in the company as they have to handled a lot of things such
as having a stocks and a lot of customers especially during the promotion day. Some times
the problem can be occur is because of not enough staff that are able to complete their tasks
on time. It caused them not be able to handle the work while they having pressure to settle
down the problem. Employees that works under pressure would have a bad attitude or stress
while handling their tasks. Other than that there is also the problem with employee that have
no experience in works. This can cause them having a problem especially while treating the
needs of customers and having such a rude customers.

4. Sole Proprietorship

The founder of UNIQLO that known as Tadashi Yanai is a person which is well
known by sole proprietorship. He is one of the Japanese billionaire businessman that are
able to handle all of the problem such as the debts and responsibilities of the business. This
business entities form of business is exclusively owned by one person, where management
is based on the person who responsibility is unlimited. A sole proprietorship is the simplest
business structure. Usually a sole proprietor needs a bit of capital for start ups, compared
to other types of business entities. Other than that he needs to takes any risk that could be
happen with their financial problem. They have to think about the problem that might occur
when the world having problem such as economic problem. Each of the entrepreneur need
to risk their own saving to make their business investment. In this Uniqlo company , the
founder found that he having quite difficulties when first he develop the company where as
know the UNIQLO product are well known around the world.

Solution to the problem

The solution to the first problem is to make a thoroughly research on what is trending in
USA and try to expand the ideas in creating a fashion sense that match with the requirement
of the citizens need. For example, the youngsters there are more to trendy and active type
of fashion. So, create a collection that suites their taste more rather than creating a collection
that based on the culture of origin company.

For the second problem, they should create their attire according to the countries size
and measurements. They cannot limit the size only for the Asian countries if they want their
market to expand to USA and Europe.

As for the third problem, they should conduct a thorough job interviews before taking a
worker to work in their shop. By doing so, the workers may be ready to do their work with a
right etiquette and will not causing any problems. The company also should take some part
time workers to compensate the lack of human resource in selling their items. This will make
the business to be smoother as the workers can change their shifts and there will be less
stress implicated to the workers.

For the last problem, probably, the owner of UNIQLO might likely to think to branch his
business with other company in order to divert from the financial problem that might occur to
certain company if they does not have any back up plan. By joining hands with other
company, his brand can be easily recognised and by that he gained enough popularity that
the sales of his product may increased in a large scale. Therefore, the income of the
company will have less risk in having financial problem.

7.0 RECOMMENDATION AND IMPROVEMENT
1. Developing Marketing Strategy

This method help to increase the market potential . UNIQLO is one of the company
having a very detail and unique product because their product are based on their design
although some of their design are not following the latest fashion given by world. Other than
that, market strategy is also help to enable business to plan for their limited resources in
order to achieve stated marketing objective. They need to plan the design with having a
variety of clothing size that can enhance the business. Such as producing clothes size that
suitable for Americans which this can help to solve the expanding market size in US if they
can open the size according to USA standard size.

This method help us to find some ideas which can full fill the customer satisfaction.
The size of clothing and climate change are very important reason on making the product
and selling them to the world. This can solve the climate problem that can be changes in a
years such as in Japan and Korea. It is because this two example of states are having four
type of season in a year. The winter jacket is one of the example that can be use in this two
countries. Other then that is can be solve by following the trend form time to time. The
products design should not based on one type of choosing. While in Malaysia they need to
design a product that are suitable to be use in a tropical forest climate.

The advantage of developing marketing strategy is the enlargement of marketing
size of the company. Other than that, it helps to achieve the business objective. In addition
developing marketing strategy might help in increasing the variety of fashion. While for the
disadvantage to this strategy is that it requires a lot of capital. Every showcase of a new type
of clothes needs to be follow and in other to get that outfit it needs its qualified and creative
fashion designer. In this case, the designer’s salaries with the following features are often
expensive.

2. Financial Plan

The financial plan are very important to start each of the business. The founder have
to make sure that their financial resources are enough for the business backup. The first
component of business is by having an enough internal financial sources such as saving
some money that help a lot in develop the business. One of the most effective methods is
determining your financial resources. According to social media sources, Mr. Tadashi and
his family used their own saving to develop their business. Other than that the external

sources is also one of useful component to open a business. External sources is another
plan on the business which means is not just hoping on the founder ‘s saving. In this regard,
the external source is like a bank loan. For example, in Malaysia there are various banks
that allow businesses to start a business by making business loans, such as Agrobank,
Bank Rakyat , CIMB and ect.

The importance of a financial plan is to determine the size of investment. It is
important for the founder to find their investment amount needed and the purpose of the
financial plan is make for. Then , to ensure that the initial capital is sufficient. Other than
that , it is to analyze the viability of the product determination before the actual investment
that can be used as guideline for project implementation.

The advantage of this plan to the company is to increase the marketing size of the
company. Increasing in the market size help the company to develop many kind of design
and product which can make people become more satisfy. Other than that, this plan helps
the businessmen to establish his or her company. In addition it is also to prevent bankruptcy
in the business. Every good thing has its disadvantages. Being a businessman is not easy
especially in financial matters. Businessmen needs to take the risk in investing almost
everything to make sure the growth of their business while they have to repay the loan that
they borrow from the bank with the interest that the bank charge.

3. Human Resource Issues

In this case the company needs to find person with skilled experience employee with high
competitive challenges because there are many company which would give a good
opportunity. The second way to solve this problem is by giving the employees a training
skills so they can learn to be better in future. The company can have a good reputation by
giving training to new employees because they helps the employee to improve their skills to
be better although it would need a cost to make the training program. Good reputation of
the company means that it can makes other people to trust on the company because they
have a talented employees in having customers. Thirdly the company should gives at least
one day off to the employee. The off day of the employee can be done with giving at least
two person off in a day if they having a quite lot of employee or they can give one person off
in one day if they have a small number of employees. The given off day can help their
employee to stress down their pressure and having a day for themselves.

Giving an off day for employees would give the company having an advantages such as
their employees can be more active and happily while doing their tasks after having the

holiday to recharge themselves. the employee also will feels that their function in the
company are being appreciate by the company. The disadvantage would occur because
some of the employee would spent their off day by doing some part time jobs to earn more
money.

8.0 REFERENCES

• Economic. (1970, January 1). Introduction. Retrieved April 12, 2020, from http://cawes-
proecons.blogspot.com/2013/05/introduction_6.html

• Li, A. (2017, May 24). Why UNIQLO failed to dominate US market? Retrieved April 12,
2020, from https://medium.com/@avex1994/why-uniqlo-failed-to-dominate-us-market-
e7f3d4d6ecc1

• Uniqlo - The Strategy Behind The Japanese Fast Fashion Retail Brand. (2019, October
27). Retrieved April 12, 2020, from
https://martinroll.com/resources/articles/strategy/uniqlo-the-strategy-behind-the-global-
japanese-fast-fashion-retail-brand/

• Vivacity Megamall. (n.d.). Retrieved April 12, 2020, from
http://www.uniqlo.com/my/shop/vivacity_megamall_store.html

• Tadashi Yanai & family. (n.d.). Retrieved from https://www.forbes.com/profile/tadashi-

yanai/#234133cd7e44

• Secret ingredients of the Uniqlo strategy. (2020, January 13). Retrieved from

https://edited.com/resources/key-data-uniqlo-strategy/

• Li, A. (2017, May 24). Why UNIQLO failed to dominate US market? Retrieved from

https://medium.com/@avex1994/why-uniqlo-failed-to-dominate-us-market-e7f3d4d6ecc1

• Sorensen, M., & Sorensen, M. (n.d.). Sole Proprietorship Definition - Entrepreneur Small

Business Encyclopedia. Retrieved from

https://www.entrepreneur.com/encyclopedia/sole-proprietorship

• Employment, S. B. and T. (2019, January 2). Develop a marketing strategy. Retrieved

from https://www.business.qld.gov.au/running-business/marketing-sales/marketing-

promotion/strategy

• Wasserman, E. (n.d.). How to Write the Financial Section of a Business Plan. Retrieved
from https://www.inc.com/guides/business-plan-financial-section.html

9.0 APPENDICES
• UNIQLO business model chart