Executive Summary
Victoria’s Secret is a retailer that sells lingerie, women’s wear, and some beauty products. It is located in America and is the largest brand. It also has catalogs and fashion shows where the top fashion models are featured. Victoria’s Secret Retailer has used a number of tactics and strategies to help it achieve its set goals. It has both external and internal strategies that are to run this successful retail operation.
Assistance in the operation is available and that makes the first strategy that the retail operation uses (Miles 102). Their transactions are performed faster and efficiently. This kind of strategy satisfies the customers hence the growth of the retail operation. Victoria’s Secret has made sure that their products are always available in their shop. It also has a very attractive appearance that is pleasing to its customers.
Cashiers at Victoria’s secret are very friendly to the customers and this attracts and retains many customers. In the sector of sales, the retail operation has very good knowledge about it and this expands the business. The tactics used in Victoria’s secret retail operation go along with the strategies resulting in a successful operation. There are good services offered in the retail operation and they have made it an efficient and effective business operation.
History of Victoria’s Secret
Victoria’s secret is a business operation that started in 1977 in California. It was founded by Roy Raymond who was embarrassed when he tried purchasing his wife’s lingerie in a public store. The embarrassment led him to open the first store at Stanford shopping center and three other stores followed swiftly. A mail-order catalog also followed immediately after the opening of the first store (Nash 67). The whole idea of opening the stores was creating a very comfortable environment, particularly for men.
The stores had walls that are wood-paneled and also had all the details about Victoria. There was then the introduction of a very helpful sales staff that was meant to offer proper services to the customers. The stores started with a single style of panties and bras that were mounted on the wall. In 1982, the company had operated for five years and this is when Roy Raymond decided to sell the company to The Limited. The limited still retained the image of Victoria’s secret. During the 1980s, Victoria’s secret expanded to most of the malls in the amalgamated States. In the malls, the company added more products like shoes, women’s evenings, and perfumes. During this time the mail catalog was issued at least eight times a year. It was in the early 1990s when Victoria’s secret became the top American lingerie retailer.
In mid-2007, the limited Brands managed to sell three-quarters of its limited clothing chain to the Sun Capital Partners so that they can improve the sales growth of the company. In 2006, Victoria’s Secret came to an agreement with the environmentalist groups of making the lingerie retailer’s catalog become friendly to the environment. Currently, there are one thousand Victoria’s Secret lingerie stores in the United States and 1000 Victoria’s secret beauty stores. Most of the stores are in the shopping centers and they sell brassieres, panties, cosmetics among others. There is more than four hundred million mail catalog issued annually in the United States. The company is now focusing on middle-class shoppers and is offering the best services so as to satisfy its customers. They have also ensured that their products are available in their stores for the shoppers to get access to them.
External Analysis of Competitiveness
Victoria’s secret has used the SWOT analysis as a tool to audit the company and its environment. The company has its weaknesses, strength, threats, and opportunities. One of the strengths of Victoria’s secrets is its knowledge in marketing its products (Kelegama 62). They also frequently introduce innovative products and services so as to satisfy their customers and to beat their competitors. Most of their stores are strategically situated in that majority of the shoppers are able to visit them.
Victoria’s Secret is known for its quality products and services. For many years, Victoria’s secret has retained its good reputation among its customers. The company also has its weaknesses that they need to work hard on so that they retain their customers and beat their competitors (Underhill 216). Some of their stores are located in areas where many people are not able to visit. Their competitors are also selling some products that are fast-moving and this might result in most of the customers migrating to other shops.
The company also has a number of opportunities that might result in an expansion of the business. There are some new technologies that have arrived and will help the company to market their products better. They even have the chance of expanding their market internationally and this will increase their sales. The company is also facing a number of threats that are acting as an obstacle to success. Some of the threats are the competitors who are trading the same kind of products. The competitors have innovative products that might ruin Victoria’s secret sales. The company is also facing the threat of taxes that have been introduced on its products.
Victoria’s secret retailer practices financial ratio analysis which is how they determine and evaluate their financial ratios. A financial ratio is carried in the company to show how the company’s activities relate to each other. The ratio analysis is however very important in this kind of company because it reveals a great deal of information about the company and its operations. Victoria’s secret practices trend analysis whereby they compare their ratios over time (Forbes 54). This yearly comparison helps them to know so that they can act when there is a need to. However, there are some numbers of financial ratios carried out in the company. One of the financial ratios carried out in the company is the price earning ratio which is about the earnings and the sales growth of Victoria’s secrets. There is also the liquidity ratio which shows the ability of a company to meet its short-term financial responsibilities. The example is the current which is calculated by dividing the total current assets by the total current liabilities. This shows the ability of the company to pay its current debts.
Another ratio is the profitability ratio that helps the company to analyze its ability to manage their company’s expenses and earn profits through using the resources in the company. One of the examples is the net profit that is calculated by way of dividing the net profit by net sales. This shows the percentage of sales that have remained after the expenses. Victoria’s secret practices a financial ratio of asset management (Forbes 86). This ratio helps the company to analyze how swiftly the resources available in the company can be converted into sales. An example is inventory turnover which is calculated by dividing the cost gods with the inventory. This shows the rate at which the inventory is converted into cash after moving through the company. There is also debt management which helps the company to analyze the impact of the usage of the borrowed cash that financed the company’s operations. One of its examples is the debt ratio which is calculated by way of dividing the sum borrowed cash by the total assets. This helps to show the degree to which the company’s total assets have been financed using the debts.
Brand loyalty is a common thing in Victoria’s secret company. The company has done its best to retain its customers who consume a certain brand in a product category (Gobé 83). The company started with a trial purchase in some specific brands and the customers were satisfied with them. There are a number of customers who are committed to some particular brands and they cannot change it no matter the costs. Some of them are willing to pay higher prices for the product rather than changing the brand (Maniatis 69). Most of them even recommend Victoria’s secret brands to other people.
The company has played a vital role in their customer’s brand loyalist. They always remind their customers about the value of their purchasing and then they encourage them to continue purchasing the same brand. They have also done many advertisements for their products with the aim of creating awareness. They do the advertisements before the sale is critical and even after. The company has retained the brand loyalists because they sell quality products. They have also introduced the idea of giving their customers incentives when they repurchase their products. The products sold at Victoria’s secret are trusted and that encourages the customers to keep repurchasing the same product.
The company offers good treatment to its customers and this has helped her for she has retained the customers (McGrath 154). They have also made their product to be available in their stores in that the customers can get it any time they need it. The company staff sometimes avail themselves and bring the product to the customer. They also have a superior way of reputation among their customers because they seek to serve their customers. This makes the customers will repurchase their product and it has helped them to retain their customers. The customers in this company are always satisfied and that is why they keep repeating the purchasing again and again.
Victoria’s secret has a number of competitors who sell similar products. The lingerie market especially has heated up and everyone is trying to sell the same product. Some other competitors are using the same trademark like that of Victoria’s secret and it causes confusion among customers for they can’t tell the difference. This is then termed unfair competition because they have stolen their name. Some of these petitioners are Victor and Moseley. They run a retail store similar to that of Victoria’s secret using the trademark Victor’s Little Secret. They sell the same kind of products and so they are the largest Victoria’s secret competitors.
Victoria’s Secret uses electronic commerce to examine the changes in the marketplace. The introduction of new technologies has helped the company to know much about the marketplace. The business has helped the company to identify its opportunities, weaknesses, strengths, and long-term prospects.
Internal Analysis of Strategy
The company has organizational strategies and missions that help it to meet the set goals and that separate the company from the competition. Victoria’s secret has a mission statement that helps the company to focus on achieving its set goals. Since Victoria’s secret is part of limited brands, Limited Brands is dedicated to building a family that has the best fashion brands globally that hold the interest of customers hence long-term loyalty and growth of the company’s shareholders (Strother 57). This mission statement will help the company do what they can to satisfy their customers so that they can retain their customer’s brand loyalists. The organization’s strategy is to direct the company in achieving its set goals. All the decisions made in the organization are in alignment with the strategic plan enabling everyone to be familiar with the plan. The company ensures that the customers are satisfied. They make sure that the products are available in the stores and are of good quality.
Victoria’s secret has distinctive competencies that enable it to provide quality products to the customers and are affordable to middle-class shoppers. The company responds to the demands of their customers and they ensure that they distribute innovative and new products efficiently. The products distributed should be profitable to the company. Victoria’s secret shine at brand creation and their management integrate and they have used technology in their business. The company has managed to differentiate itself from the competitors and even has maintained low cost and quality products. Their value creation has lead to their brand being recognized internationally.
The department stores of Victoria’s secret sell attires that come from major manufacturers and many people go to department stores to purchase a quality product. The company offers quality service that makes attracts and retains customers hence makes profits from the sold products (Frank 94). Due to their quality products and good distribution channels, the company sells a lot of products in a day. The quality of the product facilitates repurchasing of the product. Most of the distribution stores are located at strategic positions where anyone can visit. Their location helps the company to beat its competitors.
The company also has good inventory management in that the managers ensure that the resources are converted into sales. Their services are recommendable because they seek to serve their customers and offer the best services. This helps the company to retain and attract more customers hence making many profits. They also have good human resource management in that; their employees are treated perfectly enabling them to serve up their clients perfectly.
Internal Analysis of Productivity
Victoria’s Secret was founded by Roy Raymond who opened three stores in the United States. He then later sold it to The Limited after five years of operations. The Limited expanded the business and opened many other stores in the United States. They are now marketing their products globally. Currently, the senior executive of Victoria’s secret is Tom Katzenmeyer and he is also the senior vice-president with Limited Brands which is a United States company. In his leadership, he has improved the company’s sales. The entire management relates well and that has contributed to the success of the company. The call scheduling approach of maximizing products practiced by Victoria’s secret was a good idea for creating jobs for many. The big number of employees increased the productivity hence the increase in sales.
In Victoria’s Secret, there are different jobs offered. One of the positions is the position of the store manager and the role is managing the store and ensuring customer satisfaction. The benefit of this manager is to reduce so many direct reports. The other position is the brand delivery and the operations manager. The roles of this manager are to run the end-to-end invention lifecycle, ensure proper presentation of products, deal with cash operations, support the rest of the staff, and observe the activities within the organization. The delivery manager has some benefits and they include reducing cash issues and improve planning.
The position of a product manager is to manage the product flow, ensure that the products are properly presented, and give support to the brand as well as giving guidance. The need of a product manager is to ensure that the product is always available and is well presented. It also improves planning. There is also the position of operations and staffing supervisor. This manager is responsible for scheduling and coordinating the staff in the store. The manager also has a role in training the new recruits and administers the activities carried out in the store. The benefit of having such a manager is that the labor is well scheduled and has good administration of activities. The manager helps to remind the management team that they have the task of hiring new people in the company. There is the customer knowledge and skills that manage the customer experiences in the store. The benefit of this manager is improving customer experience n sales and services (Kelegama 21).
Recommendations
Victoria’s secret needs an organizational strategy of internal assessment that focuses on the organization’s ability to assess its strengths and weaknesses. This will help the company to utilize the value chain analysis approach. In terms of finance, the company should fund the key initiatives and have a financial plan. In research and development, the company should always maintain a process that is creative and innovative. In terms of production, the company should ensure that all the departments do support production. When it comes to marketing the products the company should ensure that all the departments support marketing and have a marketing plan. In regard to sales, the company should ensure that the sales goals are achieved consistently. The company should ensure that its strategies always emphasize customer service.
Conclusion
In conclusion, Victoria’s secret is a large retailer that sells women’s wear in the United States. It sells bras, panties, and lingerie’s among others. The company was founded by Roy Raymond who was embarrassed when he tried purchasing his wife’s panties in public. He opened three stores and a mail-order catalog. He then later sold the company to The Limited after years of operation. They then expanded the company. Victoria’s secret has a mission statement that helps the company to prosper.
The company has a number of analyses that have contributed to its accomplishment. It also has its strategies and tactics that direct the company to achieve its set goals. The company practices financial ratios to let them supervise the company’s finances. There are a number of employees working in the company currently. The company also needs to focus on the internal assessment of organizational strategies so that it can prosper. They should focus on sales, production, finance, and marketing among others. The company has retained most of its customers and is attracting new ones every day. They have maintained the brand loyalist that is very beneficial to the company. This is because they satisfy their customers as well as selling quality products and offering quality services (Nash 37).
References
Forbes, Ben. Victoria’s Secret. California: University of California, 2003.
Frank, Lewis. The Economic Naturalist. Chicago: Oxford University Press, 2007.
Gobé, Martin. Branding. New York: Allworth Communications, 2005.
Kelegama, Serah. SWOT Analysis, New York: SAGE, 2006.
Maniatis, Stephanie. Trade Marks. Texas: Sweet & Maxwell, 2006.
McGrath, Roger. Strategic Moves, California: Business Press, 2005.
Miles, Robert. Organizational Strategy. California: University Press, 2003.
Nash, John. Victoria’s Secret. New York: PLUME, 2002.
Simon, Michael. The Mall and Texas. Paco: Underhill River, 2004.
Strother, James. Victoria’s Secret Strategy. New York: SAGE, 2006.