Victoria’s Secret Possible Expansion into Bulgaria Draganova Maria Kasabova Steliyana Levendova...
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Transcript of Victoria’s Secret Possible Expansion into Bulgaria Draganova Maria Kasabova Steliyana Levendova...
Victoria’s SecretPossible Expansion into
Bulgaria
Draganova MariaKasabova Steliyana
Levendova ElitsaStoitsova Desislava
Overview of the CorporationStrategy Overview
• Mission: “We are committed to building a family of the world’s best retail brands that offer captivating experiences that drive long-term loyalty and deliver sustained growth for our shareholders.”
• Values: The customer rules! Passion leads to success Inclusion makes us stronger It matters how we play the game
• Vision and long-term objectives: Be the best retailer of women lingerie in
the world by always getting better and living the company’s values
Keep the domestic US business healthy and also pursue profitable growth internationally by maintaining the brand’s image while expanding
Strategy Overview
Business Overview
2012 2011 2010 2012 2011Net sales (in millions) 6,574$ 6,121$ 5,520$ 7% 11%Operating income (in millions) 1,188$ 1,081$ 889$ 10% 22%Operating income rate 18.1% 17.7% 16.1% 2% 10%Total assets (in millions) 2,428$ 2,346$ 2,357$ 3.5% -Capital expenditures 268$ 161$ 82$ 66.5% 96%Depreciation and amortization 148$ 142$ 135$ 4% 5%
Financial data% Change
24.51%
75.49%
Market share
Victoria's SecretCompetition
• Value proposition: products which are fashionable and attractive, create experience and deliver emotions
• Competitive advantage: brand name and loyal customer base
• Resources and core competences: trade name and inventory management
• Markets: present mostly in North America but beginning to expand worldwide
• Products: underwear, swimwear, cosmetics, accessories, clothes, shoes
• Competition: retailers, specialty, and department stores
Business Overview
Recent Developments• Partnership with M.H. Alshaya • Launch of PINK – college line for women aged 15-22• International expansion outside North America since 2012
ConclusionVictoria’s Secret is a profitable and stable company with growth potential.
Geographical Expansion
• Increase profitability and secure long-term growth, access new markets
• Choose partners carefully and keep the brand’s image
• Enter the market with lingerie• Careful expanding strategy in order to keep the
image of exclusivity• Enter in September in order to be established
for the Christmas shopping season
Country-specific AnalysisPESTEL Framework
EP
S T
LE
Target Market
Women profile:• Age 18-49• Income – 1000BGN and above per month• Live in larger cities• Marital status – single or in a relationship• Sophisticated, financially independent• Profession: managers, full-time, or housewives• Like to be sexy, attractive, and fashionable• Active on social media platforms• Buying habits
Target Market
Men profile:• Age 25-45• Income 2000BGN and above• Marital status - in a relationship• Open-minded, contemporary,
care about appearance, appreciate the woman in their life, willing to spend a lot of money on her
• Buying habits
Product Differentiation
• Exclusivity• Best super models displaying the products• Feeling of being special• Visual appeals• At a reasonable price – more than a product• Older women feel younger
Market Analysis
• Reaching to customers Brick and mortar store Catalogs for advertising Online shopping website
• Market trends Aging population – negative growth Improving economic situation Emigration of young people
• Probability of a successful expansion – country’s attractive image for investment
Competitors AssessmentOverall Competition
• Types of businesses: Producers - Hristy, KIA Intim, Kiki Distributors - BulBel, Seven Seconds,
Triumph, Za-za, Ivon.bg Sellers - Delfina, Sia, New Silhouette
• Product range• Competitive advantages: Popularity, variety of products, discounts
Supplier Assessment
• Policy (L Brands): no supplier should provide over 10% of manufacturing
• Location: developing countries• Types of suppliers:
international: designers, manufacturers, companies providing materials, logistics and administration
local: store managers, shop assistants, suppliers of legal, accounting and other services
• Vertical integration
International Suppliers
• Designers – the Limited Design Studio• Manufacturers: Jordan, China, Thailand,
India, Jordan, Sri Lanka • Differentiation: Launch and non-launch• Materials: Burkina Faso and Eastern Europe• Logistics and administration: merchandise
allocation, planning, shipping, other services• Divisions: Independent Production Services,
Inc. (IPS), Limited Logistics Services (LLS), Columbus Direction Center
Supply Chain
Product design and launch
Merchandise Planning, Allocation and
ForecastingProduct-ion & Sourcing Logistics Store Opera-tions
Bulgaria
• Shop assistants – unemployment rate13%, secondary Education 12%
• Store manager – 6.4% of unemployed • Legal and accounting services – the big four• Suppliers of store assets and area – lower
prices, new malls• Additional services – freight, store
arrangement, marketing, etc.
Switching Costs and Bargaining Power
Moderate switching costs due to:• Short-term contracts (established partnership)• Wages• Technology and quality (expertise)• Trade arrangements and regulations• Culture• Time and organizational changes (location)• Globalization• High volume of production
Internal suppliers
Market Entry Assessment• Barriers to entry - moderate• Way to enter – franchising -
Alshaya Co.• Managing personnel
Results Assessment
• Pricing and profitability analysis based on: Competitor's financial results Triumph – similar target market and pricing strategy.Earned 199,000BGN in 2012 from 5 stores.
Size and purchasing power of target market41,225*100 = 4,122,500BGN = 2,906,239USD sales revenues2,906,239USD*7.2% = 209,249USD profit
Results Assessment
• Short-term success Establish the brand on the market Build a loyal customer base Strong recognition
• Long-term success Increase in sales Online shopping website New store opening Increase in store size Introducing of cosmetics and accessories
Final DecisionUnwillingly , we say ‘NO’ but just for now.
Thank You!