Uniqlo managers want customers to say, “Wow!” when they walk into the store because they are awed by the amount of clothing they see. Hopefully, the customers’ reaction will allow Uniqlo to sell clothes at the price the company wants to charge rather than at the price customers would rather pay. Customers have a stronger say in the price of products that stores offer when:
Customers face large switching costs if they change vendors
A company sells a highly undifferentiated product
Customers buy small quantities of product
It would be difficult for the customer to integrate backward
According to Porter’s 5-Forces Model, the issue identified in the preceding question concerns which aspect of Uniqlo’s environment?
Bargaining power of suppliers
Threat of substitutes
Threat of new entrants
Bargaining power of customers
Uniqlo hires a lot of employees and spends many hours training them. The goal is to have many skilled employees on the sales floor at all times. Customers should find it easy to get service, and the service they get should be top-notch. Employees are Uniqlo’s ____________ resources.
a) intangible
b) tangible
c) human
Some aspects of Uniqlo’s strategy appear to be in line with Porter’s ideal of differentiation, while others are more aligned with cost leadership. Uniqlo offers customers high-technology clothing made with Heattech, a fabric that can trap moisture from the body and turn it into heat. The clothing is very lightweight but does a great job at keeping people comfortable when temperatures drop. No other store carries Heattech fabric. Heattech clothes are associated with a __________ strategy for Uniqlo.
a) focus
b) differentiation
c) cost leadership