Victoria’s Secret
Possible Expansion into Bulgaria
Draganova Maria
Kasabova Steliyana
Levendova Elitsa
Stoitsova Desislava
Overview of the Corporation
Strategy 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
Strategy Overview
• 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
Business Overview
Financial data
Net sales (in millions)
Operating income (in millions)
Operating income rate
Total assets (in millions)
Capital expenditures
Depreciation and amortization
$
$
$
$
$
2012
6,574
1,188
18.1%
2,428
268
148
$
$
$
$
$
2011
6,121
1,081
17.7%
2,346
161
142
$
$
$
$
$
2010
5,520
889
16.1%
2,357
82
135
Market share
24.51%
Victoria's Secret
Competition
75.49%
% Change
2012
2011
7%
11%
10%
22%
2%
10%
3.5%
66.5%
96%
4%
5%
Business Overview
• 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
Recent Developments
• Partnership with M.H. Alshaya
• Launch of PINK – college line for women aged 15-22
• International expansion outside North America since 2012
Conclusion
Victoria’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 Analysis
PESTEL Framework
P
E
S
E
T
L
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 Assessment
Overall 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
Merchan
dise
Planning,
Allocatio
n and
Forecasti
ng
Production &
Sourcing
Logistics
Store
Operations
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 market
41,225*100 = 4,122,500BGN = 2,906,239USD sales
revenues
2,906,239USD*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 Decision
Unwillingly , we say ‘NO’ but just for now.
Thank You!