During the economic downturn, many speciality store retailers of private label apparel (SPA) are still growing. SPA companies integrate processes from the product planning to the sales, providing low-priced products to customers. Such adjustment makes the processes more efficient, and it is the reason why the SPA model is attracting and popular in various industries. Among these SPA companies Uniqlo, which outsources production, and ZARA, which has its own manufacture facilities, have different SPA models while both of them develop very well.
From various aspects, the present thesis aims to understand Uniqlo and ZARA’s current situations and analyze the elements of their business models, and further investigates the flexibility and the obsolescence in these business models.
The conclusions of the thesis are as follows. First, a business model is the framework creating the customer value of an enterprise. If we maintains the flexibility in the business model, we can keep the sustainable competitive advantage. Second, the composition of Uniqlo and ZARA’s business models are distinct. Uniqlo commits to the material development and outsources mass production to low-wage countries to pursue the differentiation and the economies of scale. On the other hand, ZARA achieves economies of speed via high-mix low-volume production of fashion apparels in Spain. The core essence of Uniqlo is the functionality and bargains while that of ZARA is the fashion and novelty. Third, due to the different origin and culture, Uniqlo, originally from Japan, focused on the Asian market at the beginning and then gradually moved into the American and European markets. ZARA, based in Spain, started its chains in Europe, gradually expanded to America and Asia and took the challenge of the international market.
Both Uniqlo and ZARA can be described as speciality store retailers of private label apparel, but they have different business models and strategies. The production and the sales in the international market becomes an important task for both enterprises. The competition between the casual wear and the fashion apparel brands in the market indeed becomes exciting.