Rising to new heights

Transcription

1 DUESSELDORF UNIVERSITY CONSULTING Rising to new heights Presen'ng to: Tadashi Yanai, Founder and CEO of UNIQLO Project Team: Anja Kievelitz Sarah Daniel Peter Mandel Timon GoJschalk

2 Problem Statement How to grow and expand UNIQLO s interna'onal presence to become the leading global apparel retailer? Team Duesseldorf 2

3 Agenda 1. Recommenda'on 2. Analysis and Key Issues 3. Strategy 4. Implementa'on 5. Wrap- up Team Duesseldorf 3

4 Exis'ng business model has sustained very strong growth 14 Revenues CAGR revenues: 14.7% Revenues Team Duesseldorf 4

5 Current supply chain of fast retailing business model R&D Merchand ising Produc'on (external partners) Distribu'on channels Customers Mainly in China Target 2020: 1/3 outside of China E- Commerce Stores Franchising partners Customer Center Concentra'on of produc'on in China bears risks as wages are increasing Team Duesseldorf 5

6 Presence of UNIQLO stores mainly in Asia Distribu'on via own and franchise stores Franc hise, 1314 UNIQ lo, 1558 Geographical distribu'on of stores Inter na5o nal, 716 Japa n, 842 Trends and challenges: Japan: stagna'ng revenues from physical stores, lead 'mes too long to serve online shoppers (partnership with Daiwa Group) US: high opening cost of new stores impact profitability US: 39 Europe: 19 LiJle number of stores offers huge poten'al for growth Team Duesseldorf 6

7 US & Europe call for a highly innova've and fast business model US/Europe High share of very fashion- oriented consumers Strong demand for in seasonal fashion Asia Convenient- style More tradi'onal Quick delivery Strong demand for mul'channel shopping and online solu'ons High quality Need to adapt customer related opera'ons of the supply chain to regional needs Team Duesseldorf 7

8 Inside UNIQLO a strong basis to build on Key Resources Key capabili'es Produc'on capaci'es in China and Bangladesh Strong network of partnerships with fabric and garment manufacturers and material suppliers Excellent quality management Professional inventory management High innova'on level UNIQLO offers great quality clothing at compe55ve pricing Team Duesseldorf 8

9 Key Issues Design effec've supply chain for global expansion Develop a modern e- commerce strategy Capture interna'onal markets Team Duesseldorf 9

10 Short term US strategy: Set up distribu'on center on the west coast and US headquarter in New York US Headquarter for customer related func'ons Produc'on in Bangladesh USA Distribu'on Center Mexico Team Duesseldorf 10

11 Use cross docking as logis'cs model Product A Product A,B,C Store 1 Product B Distribu'on Center Product A,B,C Store 2 Product C Product A,B,C Store 3 Team Duesseldorf 11

12 Long term US strategy: Start with new produc'on facili'es in Mexico and addi'onal distribu'on center USA Distribu'on Center US Headquarter for customer related func'ons Distribu'on Center Mexico Produc'on Plant CoJon from La'n America Team Duesseldorf 12

13 Short term Europe strategy: Set up EU Headquarter and distribu'on center in Germany Europe EU Headquarter for customer related func'ons and distribu'on center in Germany North Africa Central Africa South Africa Team Duesseldorf 13

14 Long term Europe strategy: Set up Produc'on Plant in Marokko Europe EU Headquarter for customer related func'ons and distribu'on center in Germany Produc'on Plant North Africa Central Africa South Africa Team Duesseldorf 14

15 1 Day delivery and Click and Collect is the recommended service level for online business Click & Collect 1 Day Delivery 3-4 Day delivery Criteria Rating Weight Fit to consumer preferences 40% Costs 2 serve 30% Competitiveness 30% Team Duesseldorf 15

16 Start building new produc'on plants in 2020 Region Number of stores Build distribu'on center and customer related headquarter Start build produc'on plant in Mexico Finish produc'on plant in Mexico 2030 USA Europe Distribu'on center and customer related headquarter Start build produc'on plant in Marocco Finish produc'on plant in Marocco Team Duesseldorf 16

17 Capture 2 billion addi'onal revenue in 2030 via interna'onaliza'on Region Number of stores Build distribu'on center and customer related headquarter Start build produc'on plant in Mexico Finish produc'on plant in Mexico 2030 Addi'onal revenue USA Europe ,5 billion In seasonal model Distribu'on center and customer related headquarter Start build produc'on plant in Marocco Finish produc'on plant in Marocco Team Duesseldorf 17

18 Success factors for e- commerce ü Find logis'cs partner for same day delivery ü Data mining and customer analy'cs: Customer loyalty program, loca'on based adver'sing, big data applica'ons such as hadoop ü Warehouse management and inventory forecast models ü Mobile applica'ons ü Integra'ng online and offline offers: E.g. Use of ibeacons. Costs: 150 million USD Team Duesseldorf 18

19 High investments for interna'onal expansion necessary Short term: 1 Distribu'on center in West Coast US $150 mio. 1 Distribu'on center in Germany $150 mio. 1 Head Quarter in NY $60 mio. 1 Head Quarter in Germany $60 mio. Digitaliza'on strategy $150 mio. Marke'ng $150 mio. Total Cost $715 mio. Team Duesseldorf 19

20 High investments for interna'onal expansion necessary Long term: 1 Produc'on facility in Mexico $350 mio. 1 Produc'on facility in Marroco $300 mio. 1 Distribu'on Center East Coast US $150 mio. Total Cost $800 mio. Total Cost of $1.515 bn for interna'onal expansion Team Duesseldorf 20

21 Risks and con'ngencies Impact Interna'naliza'on fails Insufficient financial leeway for interna'onaliza'on Probability Team Duesseldorf 21

22 Timeplan Action Time frame 1-5 years 5-10 years Build distribution centers Find suitable buildings for headquarters Implement success factors for e- comerce Start building production plants in Mexico Start building production plants in Marocco Team Duesseldorf 22

23 Wrap- up Design effec've supply chain for global expansion Develop a modern e- commerce strategy Capture interna'onal markets Team Duesseldorf 23