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Muji is an international company that started in Japan in 1980. Since its establishment, the company has aimed at producing products at an affordable price and that explains why the company sales have been on the rise over the years. For that reason, Muji focuses on reducing their cost of production, reducing the storage of raw materials, and simplifying the process packaging materials.
At the moment, the company has an average capital of JPY 6,766.25 million, with an annual turnover of about 333,281 million. Additionally, the company has employed a total number of 16,195, where 9,203 are part-time workers.

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STRENGTHS:

Operates in a broader variety of products..

Has a good reputation.

The brand has been in existence for more than 25 years.

The company is an experience multi-national store.

The slogan of the company is simple and straightforward.

WEAKNESS:

The failed store reflects terrible management.

There is a high cost of shipping and online retailing.

The expansion of the company is over-ambitious in its development.

The slogan limits the marketing strategy.

OPPORTUNITIES:

Opening new stores

Developing stores in neighboring countries.

Practice ethical consumerism.

Take advantage of online marketing

To establish a system that will promote customers loyalty

THREATS:

The products have color preferences and thus promote racism

There is high competition from other companies like IKEA and Bodyshop.

Political disputes and unfriendly political climate

High costs  of opening and operating stores

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Political - Stabile political environment

Economic - encourage the entry of firms in the industry

Society - address environment issues

Technological - Some television programs broadcast Japanese brands

Environment - The ongoing concern of air pollution

Legal - Policies and rules in some countries are affecting the way the company operates in such markets.

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The macro level of analysis aims to identify the country market which has a potential for the new entry. On this level of analysis different types of distances to the new market are investigated. These distances include political, cultural, demographic, economic, legal, geographic, psychic, and other distances which may influence the decision of entering the new market made by the firm

In order to measure different types of distances which separate Muji brand from entering the Russian market, PESTLE analysis has been applied:

The analysis of different risks and business environment shows that there is not substantial distance to entering the Russian market. However, several factors should be taken into account. First, the customer readiness to buy Muji products and their attitudes to design minimalism and "No-brand" policy of the company. In order to investigate this, we developed a questionnaire which was distributed online among consumers. Other factors, which should be taken into account, are the political factors and legislative procedures which are needed to be considered and completed when entering the Russian market.

** The World Bank Data http://data.worldbank.org/indicator/NY.GDP.PCAP.CD

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The macro level of analysis aims to identify the country market which has a potential for the new entry. On this level of analysis different types of distances to the new market are investigated.

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Bargaining power for supplier:
·  Practice bulk buying hence enjoy economies of scale

·  The company overtakes the manufacturers of the suppliers and thus reduces their bargaining power

·  A new technology that leads to increase in varieties of products and thus led to price stability
Bargaining power for buyers:
Many multinational companies have engaged in the trade of such products and used different marketing strategies like offering discounts and promotions. Notably, Muji’s strategy is subsidizing prices.
Threats of new entry:
In the bid to encourage competition, most nations have practiced the move of easing restrictions to the multinational companies
Competitive rival in the industry:
The competition is high from multinational companies like The Bodyshop who operate with the same concept of offering cheaper products
Threats of substitute:
Muji is a unique company in producing products that are of high quality at a low price and environmentally friendly conditions. Other competitors may not provide substitute products since they may not offer all the three standards in one package.

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Status:high Supportive Reasons: There are highly existing competitors such as Uniqlo, IKEA. High fixed cost from operation (Store location) Brand Identity Supportive Reasons: Barrier to entry is high Specialized technology and own designed products High capital requirements

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MUJI's top competitors include Gordmans Stores, Maus Freres and Lenards.

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MUJI's top competitors include Gordmans Stores, Maus Freres and Lenards.

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MUJI is a retail company that offers a variety of products, including household goods, apparel and food.

Gordmans is a chain of Midwestern off-price department stores.

Maus Freres owns department stores and other loosely related business.

Menard operates a chain of home improvement stores.

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The marketing strategy of the first objective is to produce high-quality goods that will be acceptable will be cheap and environmentally friendly. In this regard, the company will control prices by ensuring that during the expansion strategy, profit from one branch will be used to open another office.

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On the second objective, the company will grow its customer base by developing different businesses. On that notion, the company operates stores like Café Muji and Meal Muji, Muji Campsite, Flower Muji, House, and IDEE.

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Additionally, the company has product differentiations depending on the product design. To achieve this, the company will collaborate with famous artists who are creating in structuring and modifying the product.

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TOKYO - Western consumers obsessed with pens, notebooks and knick-knacks from the Japanese retailer Muji may be surprised to learn more about how the company winds up with its signature designs and how far Muji plans to take its creative ambitions.

If Muji has its way in the West, IKEA may need to watch its back (Muji is making slow moves into furniture items, which is IKEA's specialty). And shoppers in the US and Western Europe may want to brace themselves for larger Muji stores that feature innovative clothing, toys and even modular homes. Muji has 385 stores in Japan and 255 outside Japan now. While IKEA has fewer stores, its massive stores still reap more revenue ($38.9 billion in Fiscal 2013, compared to $2.2 billion for Muji for its latest Fiscal year).

Kei Suzuki, director of the household division and global merchandise inventory control for Muji, spoke to The Berlin School of Creative Leadership executive MBA students during their May module in Tokyo. The Muji brand involves much more creativity than we realized and the company hasn't fully communicated its story to the US (and European) consumers.

The company started in 1980 with the name Muji, which stands for "Mujirushi Ryohin," Japanese words that mean: "No brand. Quality products." Another slogan says "All value No Frills." The paradox of this name is that while it says "no brand" Muji is actually perceived as a great brand with thoughtful, innovative products. It's like those restaurants or night clubs that use minimal marketing to draw customers.

"Through our product, we like to communicate Muji philosophy," Suzuki said.

Yoshinori Fujikawa, a professor at Hitotsubashi University's Graduate School of International Corporate Strategy, told us that Muji doesn't disclose the names of its designers, who make the 7,500 products that Muji carries. The company evaluates new products with a group panel similar to how Wal-Mart vets products in Bentonville, Ark., except the Muji panel considers different design sensibility in its product selections. Muji focuses on affordable, simple, sleek, minimalist products designed well for a specific task.

For example, Muji sells 90-degree socks, which are in the shape of a right angle - the way your foot extends from your leg, rather than a sock at a 120-degree angle. "One of our friends of Muji found a 90-degree hand knitted socks by a grandmother in Czechoslovakia," Suzuki said. "We thought it is very Muji and asked her to come to Japan. Her daughter came to Japan and demonstrated how to knit. One of our suppliers managed to make machine to mass-produce and it became big seller."

Another iconic Muji product is a CD player that is fixed to a wall.

Muji designers also came up with a bath towel that has a "next life." That means that after its use as a bath towel is done, it can be used as a bath mat. And, finally, as a duster.

"If we wanted just to make money, maybe we would have another choice... we prefer going steadily and keeping consistency," Suzuki said. Integrity is key. "We work with manufacturers to make the product. We want to have a good relationship with them and take care of them."

Suzuki sees four principles as key to Muji's branding, product selection and sales success:

1. An antithesis to the consumption society

2. We leave room for the individuality of the customers

3. No name, anonymous

4. We try to take the viewpoint of the purchasers, consumers

Suzuki says Muji's parent company, Ryohin Keikaku Co. Lt.d, plans to expand on all continents from now till 2017, particularly in Asia, Japan and Europe. The strength of the Muji brand seems to be the mission and unique philosophy the company founders have identified. Another professor at Hitotsubashi, Jesper Edman, told us that Japanese retailing darlings such as Muji, Uniqlo (clothing) and Toto (toilets and other plumbing products) are doing a better job of assimilating women, younger people and foreigners into their workforces.

As the room was largely full of advertising, branding and media specialists, we quizzed Suzuki about why Muji doesn't toot its own horn, tell its story and explain its brand to the world in a more outspoken way. His answer was fascinating whether you agree with it or not:

"Muji is low-key and not flashy. Maybe someone outside Japan finds it cool," he said. "We don't want to say so ourselves."

Suzuki answered more of our questions about the company:

Paul Glader: In some ways, the Muji brand seems stuck in the 90s? How much should of it should change and how much should stay the same?

Kei Suzuki: Muji was very successful in the 1990s... we expanded our product. We maybe started to put a bit more color at the time. We realized in 2000 that, internally, something was wrong. We expanded quickly in the 1990s thanks to our concept... but we were too rash. After a tough time ... the leaders realized the concept is good but ... to realize the concept we always have to think. Instead of using new colors and products, we have to just think through what Muji is... Rather than having more color or whatever, we wanted to create a better experience.

Glader: Sometimes, I notice inconsistency in the experience with Muji shops around the world. How long does it take to open a shop around the world? What goes into the process?

Suzuki: In the last few years, we expanded globally and rapidly... we are always thinking about which country we'll be opening in next. Brazil, Canada? It sometimes takes less than one year. This is very tough. In many cases, we have to change the specs of the product. Our manual relates to Kaizen activities - always improving and revising.

Glader: The stories around your products really sell your products. Are you exploring ways to get those stories out to the general population?

Suzuki: ... Our concept is still strong. Internally, we are communicating our concept and vision thoroughly. In the 1990s, we didn't do much. Everything was OK. After 2000, we rethought who we are and what we are thinking about. Now, we are communicating thoroughly internally. Externally, it's still a dilemma. If we start explaining that Muji is this or that, some people might be skeptical... Now, we are inviting people in the media to understand the concept more. We are focusing more on press instead of advertising. We use SMS to communicate better with customers. We have exhibitions twice a year at the headquarters. We are thinking of doing exhibitions in China or Taiwan.

Glader: Muji v. IKEA. How are they different? Is IKEA your biggest rival?

Suzuki: I respect IKEA. It's a very good company. Still, they are more on the furniture side. They are focusing on the storage side. Perhaps they are learning about the Japanese market. The store location is not always the same. They are outside [of cities] in the country and [in places meant] for driving. On the furniture side, IKEA represents competition. But because the Muji customers is more about the lifestyle of the Muji brand. Our core, core customer is really core. They don't think about which furniture company should I visit. [Muji is more about regular shopping, lifestyle shopping.] That's a double edged sword. Our customers are getting older every year... We have to get younger customers.

Glader: Do you have a rewards based model for designers?

Suzuki: We agree on a minimal commission or fee [for outside designers]. If a designer is employed by us, they are on salary instead of a commission. They get raises but not a huge, sudden bonus. Last year, sales outside of Japan were 22%? This year it will be 29%.

Glader: Can you say more about your expansion to China? Perhaps in terms of your analysis about your expansion to Europe?

Suzuki: The past entrance to China was very tough. Someone registered the Muji brand there. So we had to fight about the logo. It took nearly 10 years (to get the trademark in China). We thought it might be very difficult and a long time before we have a store in China. But, now, China is the biggest growing Muji market. The Chinese economy is emerging so strongly. We've had success in Hong Kong... so once we decided to expand, people said, "Please come and expand the Muji." Then we got very good rent prices and opportunities.... The average basket customers take out in China is similar to Japan.

Glader: The Muji stores have some pricing inconsistency from country to country? How are you addressing that issue?

Suzuki: We are trying to make the price more normal globally. We want things to be affordable. We want things to be the same price as in Japan. The highest can be twice or more than Japan and no country outside of Japan's price is cheaper... Making it 1 to 1 pricing is one of my biggest pieces of homework. But I think it will take some time. Our first stage is to make prices within 20% to 30% different in major items.
Paul Glader is an Associate Professor at The King's College in New York City and on Twitter @PaulGlader.

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The Berlin School Of Creative Leadership

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Muji Executive Kei Suzuki On Future Growth Of Japan's 'No Brand' Retailer

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By Paul Glader TOKYO - Western consumers obsessed with pens, notebooks and knick-knacks from the Japanese retailer Muji may be surprised to learn more about how the company winds up with its signature designs and how far Muji plans to take its creative ambitions. If Muji has its way in the West, IKEA may [...]

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It may seem like a stretch to use the look of a company's main office as a metaphor for how it operates, but in the case of Muji, the Japanese clothing and housewares company, it seems like fair game. As I sit at an empty table at the headquarters of parent company Ryohin Keikaku Co., Ltd., a nondescript office building in the Toshima ward of Tokyo, I'm surrounded by efficiency.

While waiting to speak with Naoko Yano, general manager of Muji's household division, a quick scan of the space suggests the company's own workplace broadcasts the same values as the product line.

A sleek steel-frame-and-white-oak table is part of the company's recent collection of modular office furniture, which the design team is testing on themselves. Amid a grid of shared desks surrounded by workshops, numerous Muji products sit on every surface, from pens to acrylic organizers.

Later, as I speak to Yano about the company's vision and philosophy, I'll be shown a presentation called "Towards a Pleasant Life and Society" detailing how the design team, especially the 22 people working in the household division, create the company's famously minimal and functional products, which now number more than 7,000.

Muji's products, from storage boxes to small appliances, are often considered the epitome of "Zen" objects: simple, strident-the essence of Japanese design. But according to Yano, it's not about one particular culture, especially as the company continues its global expansion. (Of the more than 800 Muji stores worldwide, half are outside Japan.)

The company's approach to materials and its design process are meant to be something understood by everybody. It's universal and very time-consuming: A single product takes at least a year and a half to finish, and usually requires twice that time. When asked if she ever gets impatient, Yano laughed and replied, "Of course!"

Considering the company's growth, something is working. Based on a conversation with Yano and a partial tour of the Muji office, including a museum of products and displays of the company's outreach and charitable work, here are some of the inspirations behind the brand's approach.

Humble beginnings: efficient and enough

A tour of the Muji flagship store in the Yurakucho district, right next to Ginza, offers a peek at the full scope of the company's ambitions. In addition to the clothes and housewares found in U.S. stores, shoppers can eat at a cafe, meet with a consultant to discuss home renovations, thumb through new releases in the bookstore, and even rent bikes (I took a white cruiser out and rode past nearby Hibiya Park).

While the company has expanded, its ethos is still informed by its debut in 1980. According to Yano, Muji (short for "Mujirushi Ryōhin" or "brandless quality goods") came about during the no-frills "bubble era," when the marketplace was flooded with flashy brands and advertising.

Muji was introduced as a simpler, more straightforward, and high-quality alternative, and initially sold inside Seiyu department stores. The line's first 40 items, a variety of basic food items such as cooking oils, reflected that back-to-basic approach.

From that initial product release, the company developed three pillars that inform its product design today: selection of materials, streamlining the process, and simplifying packaging.

"These are the three things that we apply to everything," says Yano. "From products to homes, this is how we do it. We commit to quality and beauty, see the uncelebrated and everyday behaviors and learn from them, and appreciate what is simple and respond to that."

Even the visual representations of the company abide by that spartan approach. The company's standard label, a matter-of-fact rundown of price, item, and materials meant for easy understanding across product lines, was inspired by a wine label.

An early ad from the '80s exemplifies this less-is-more identity. Designed by Ikko Tanaka, the image shows a salmon with the center cut out, transmitting the fact that, unlike other companies that just use the center section, Muji uses the whole fish. It's all about efficiency.

Good design, like a good meal, shouldn't leave you stuffed

Muji's quest for simple, stark design suggests designers have to be great editors. When asked how she knew she was finished designing a product, Yano replied that there is no final design.

"There's a saying that when you eat, 80 percent full is enough," says Yano. "It's not healthy to be full all the time. That's the same way we design. We never say it's the end; there's always room for improvement."

This doesn't mean that Muji stores are filled with B-minus work, but rather that, philosophically, the product designers aim for just enough to get the job done and no more. They constantly refine and reflect on their work. Muji has an advisory board of outside designers that frequently works with product teams to help improve and adjust items in process, and every product goes through multiple rounds of critiques before it hits the shop floor.

Items also get second looks even after they're sold. Every year, the design teams check customer feedback about existing products and makes slight adjustments. After all, if it was 80 percent when it was introduced, there's always room for improvement.

"If you get a perfect score, you think you're good enough, you get lazy, and you stop," says Yano.

Materials and creativity matter

During her presentation, Yano showed a slide with an image from the company's massive new flagship store in Chengdu, China. In addition to an actual wooden boat near the jackets and outerwear, a grand chandelier hangs over the main staircase. That lighting isn't crystal, however; It's made from a selection of Muji products, including water bottles and acrylic vases, an object lesson in the power of materials used in a creative way.

"Our company believes in the importance of being creative, even though the materials are basic and simple," she says. "Everything is possible."

Yano, who first started working for the company in 1993 after graduating from Tama Art University, was inspired by the then-small company's approach, which at the time felt avant-garde. It was minimalism that wasn't forced, indicative of the way she thinks that products should evolve. During a brief time away from Muji working on product design in Sweden, her ideas were reinforced.

"In Europe, people are aware of how they want to live and create their own environment," she says. "Even the richest people could find something that works for them at Ikea. How they choose things becomes very personal. At Muji, we would like to create a baseline of products so anybody in any country might be interested."

What's a great example of Muji design excellence with universal appeal? Yano picked the company's acrylic tissue box, her favorite product. It may not be a standout, but the material is beautiful, and the clear exterior lets users see when they need to replace the tissues. Barely changed after 25 years, it's a success.

Real-world observations

In addition to all the critiques and reviews, Muji designers also take plenty of cues from the real world. They factor in consumer opinion-the portable light was directly inspired by a customer suggestion, and a new line of travel products is being culled down with customer feedback-and also look at how objects work in the field.

The Found Muji initiative sends designers across the world to observe and learn from other cultures. By using and observing everyday objects from around the world that have withstood the test of time, the design team can draw lessons about user experiences and simplifying prototypes, and bring them back to the studio to influence the next generation of products. The Found Muji boutique sells these original items at certain stores, including a standalone boutique in Tokyo's Aoyoma district, letting consumers get their hands on these classic pieces.

"If you get a perfect score, you think you're good enough, you get lazy, and you stop."

Last year, Yano and other designers also staged Compact Life, an exhibition in Hong Kong that examined simple, straightforward interior design. As part of the project, Muji sent design teams to observe more than a dozen apartments, and even redesigned the most challenging one, the crowded, 365-square-foot condo of the Ho family, consisting of parents and one daughter. Mrs. Ho's collection of hundreds of shoes, as well as a general lack of storage, made things quite cramped. The Muji team helped them cut down and reimagine their home.

"The exhibition was about how living space could be created with our furniture," says Yano. "We didn't just give them space to store things, but room to learn."

Reorganizing space is a far cry from selling simple home goods, but it's all part of the Muji philosophy, and the company's expanding ambitions-from a line of prefab homes to renovation services for existing older dwellings. Making that "pleasant life" available to everyone is at the core of the company's philosophy, after all.

"If you think about life like this," says Yano, "we might be able to gradually improve society."

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Inside Muji's design philosophy for a 'pleasant life'

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It may seem like a stretch to use the look of a company's main office as a metaphor for how it operates, but in the case of Muji, the Japanese clothing and housewares company, it seems like fair game.

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1. The first objective of the company is to improve positioning by selling cheap, high-quality products.

2. Secondly, Muji targets to enhance its reputation and make it a preferred brand by the general public.

3. The target market of Muji is the working class, students, and office workers. Mainly, this kind of demography ages around 25-40 years who are single, married, or engaged.

4. Therefore, with the targeted segment in mind, Muji will focus its marketing on serving the economic niche available and thus increasing its customer base.