Victoria's Secret - Strategic Plan
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Transcript of Victoria's Secret - Strategic Plan
STRATEGIC MANAGEMENT COURSE PROFILE PROJECT
COMPANY: VICTORIA’S SECRET
Tereza Koudelková
Markéta Magyarová
Company Overview
• Division of Limited Brands Inc. (flagship) • Around 60% of its revenues
• Present only in North America • 1017 shops in US; 19 in Canada
• Operates mainly in the Lingerie, swimwear and bridal stores industry
• Wide product range - bras, panties, sleepwear, swimwear, cosmetics
• Strong financial position • High profit margin, high inventory turnover (compared to
the industry average)
Vision, Mission
Ultimately Seductive.
Victoria‘s Secret is committed to being global trendsetter in premium women lingerie providing superior shopping experience to both men and women. Tradition and employee expertise help us attain loyal customers and therefore create sustainable value for our shareholders.
SWOT Analysis
Strengths •Strong brand recognition
•In-store experience •Customer care •E-commerce •Product range
Weaknesses •Premium prices •US locations only
•High share price fluctuations •High inventory
•Part of weaker group
Opportunities •Economic recovery
•Growth of the target population •International expansion
•PINK line strategy is successful
Threats •External competition
•Low profit margins due to price-competition or purchasing costs •Debacle of the to-be-opened
stores in Europe
Objective #1 To establish Victoria’s Secret as a top retailer of premium women lingerie in Europe. Time horizon: 10 years Objective #2 To discontinue all operations of Limited Brands except for the Victoria’s Secret and Body&Bath divisions.
Suggested long-term objectives
• Launch a marketing campaing in countries where stores will be opened.
• Hire VS Angels and organize annual VS Fashion show in Europe
• Establish brand awareness and sentiment among men buying lingerie as a gift
Establish the VS brand as a top lingerie retailer
• Hire and train staff using the U.S. know-how
• Try to select convenient occassions for store openings to increase the interest (such as Summer Olympics in London)
• Choose countries to operate in (see organizational structure)
• Choose site to open stores at (sites rather in thecity centre, complementary in malls)
• Choose suitable products for the Europen customer and the store format
Open 200 stores in Europe over the next 10 years.
• Profile as a premium brand, but stay competitive in this segment
• Set the prices at levels comparable to U.S.
• Implement the U.S. sales model (2-for-1)
Establish successful pricing and sales policy
• Implement the U.S. know-how regarding in-store experience
• Create a reward card programme
• Train staff to become an experienced workforce able to advise both women and men with product selection
• Minimize average delivery time
Provide excellent customer care.
• Build an European distribution centre based in Germany
• Ship all products for Europe directly from the producer to the distribution centre
• Choose a cost-effective way of transportation to ship products to stores or end customers
Establishing cost-effective logistics
• Choose a suitable product range for the target market
• Set the prices lower than in stores or use specials
• launch an internet marketing campaign to raise awareness of the website and e-shop
• Ship the products to all countries of the European Union
Use e-commerce.
Strategic goals and initiatives
• Hire and train staff using the U.S. know-how
• Try to select convenient occassions for store openings to increase the interest (such as Summer Olympics in London)
• Choose countries to operate in (see organizational structure)
• Choose site to open stores at (sites rather in the city centre, complementary in malls)
• Choose suitable products for the Europen customer and the store format
Open 200 stores in Europe over
the next 10 years.
• Launch a marketing campaing in countries where stores will be opened.
• Hire VS Angels and organize annual VS Fashion show in Europe
• Establish brand awareness and sentiment among men buying lingerie as a gift
Establish the VS brand as a top lingerie retailer
• Profile as a premium brand, but stay competitive in this segment
• Set the prices at levels comparable to U.S.
• Implement the U.S. sales model (2-for-1)
Establish successful pricing and sales policy
• Build an European distribution centre based in Germany
• Ship all products for Europe directly from the producer to the distribution centre
• Choose a cost-effective way of transportation to ship products to stores or end customers
Establishing cost-effective logistics
• Implement the U.S. know-how regarding in-store experience
• Create a reward card programme
• Train staff to become an experienced workforce able to advise both women and men with product selection
• Minimize average delivery time
Provide excellent customer care.
• Choose a suitable product range for the target market
• Set the prices lower than in stores or use specials
• Launch an internet marketing campaign to raise awareness of the website and e-shop
• Ship the products to all countries of the European Union
Use e-commerce.
Organizational Structure
Limited Brands
VS USA VS Europe
VS Direct
VS Stores
Sweden
UK
Spain
Italy
Germany
Romania Stores in
catchment areas
Logistics – distribution centers and catchment areas
Producer
Germany
Catchment areas
DHL / UPS / postal service
End customer
DHL
End customer
Catchment areas
Transportation company
Stores
E-shop purchases
Stores inventory demand
Inventory tracking system
Store manager
Web purchases – standard delivery Store inventory transport
Web purchases – express delivery
Key Process - Logistics
Key Processes
• Employee hiring
HR
• New IT system implementation
IT
• Customer Feedback Collection
Marketing
Key Processes cont.
Employees
Products
Customers
Shareholders Share Price Growth
Reward Programme
Range Price
Customer Mind-setting
Display
Training
Avg. Delivery Cost
Avg. Delivery Time
Expertise
Know-how
Satisfaction
E-commerce
Sales Net Profit
Margin
Cause-Effect Relationship Model (Customer Care)
Key Success Factors # Metrics Target Value Frequency Susceptibility to influence
Rising the VS brand awareness as a top lingerie retailer
1 Survey/Questionnaire (MRG)
90% Every two years high
First choice for men buying underwear for their partners
2 Annual increase in # of purchases (MRG, Sales)
10% Per purchase/annually high
Customer satisfaction 3 Scale 1-10 (at the desk) (Sales, STMNG)
95% Per purchase/annually low
4 # of reward cards (MRG) 30% of customers Quarterly low
5 Conversion Rate (Sales, STMNG) 40% Quarterly high
Successful store opening 6 Total # of stores (COO)
Differs each year Annually low
7 Revenues (CFO) Proportionate to US Annually low
Effective logistics 8 Avg. delivery time (COO)
Stores 24h Web standard 5days Web express 36h
Quarterly medium
9 Avg. delivery costs (COO) ? Quarterly medium
10 Inventory turnover (CFO, COO) 6 Annually medium
Pricing policy 11 Net profit margin (CFO) 8% Annually medium
12 Avg. € amount per purchase (Sales) €45 Quarterly high
E-commerce 13 # of unique visitors (entries) (IT, MRG) 10.000/day Monthly low
14 Conversion Rate (# of purchases/unique entries) – (MRG, IT)
20% Monthly low
Required Precision: 95% for all the metrics Conversion Rate = percentage of purchases to entrants
Key Success Factors
Key Success Factor Importance
Score
Rising the VS brand awareness as a top lingerie retailer 1 0,15
First choice for men buying underwear for their partners 2 0,06
Customer satisfaction 3 0,06
4 0,08
5 0,1
Successful store opening 6 0,02
7 0,08
Effective logistics 8 0,02
9 0,02
10 0,03
Pricing policy 11 0,1
12 0,1
E-commerce 13 0,06
14 0,12
Total: 1
1 – not at all; 2 – partially achieved; 3 – achieved; 4 – exceeded expectations
Balanced Score Card
THANK YOU FOR YOUR
ATTENTION.