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!