Individual report on Victoria Secrets
Individual report on Victoria’s Secret
1.0 Introduction
The purpose of this report is to analyse the external environment of Victoria’s Secret through the Porters Five Forces analysis and then analyse the strategy of differentiation and strategic alliances used by the leading American lingerie retailer and to evaluate if these strategies are implemented and used effectively by the company.
2.0 Analysis of the Internal Strategic Capabilities and External Environment
A leading retailer such as Victoria’s Secret has to be aware of the different factors that could have an impact on the company’s position. These factors can be identified by using a range of different analytical strategic tools; they include PESTLE, SWOT or Porters Five Forces analysis (Barney and Hesterly, 2010). However this report will use a Five Forces analysis to evaluate Victoria’s Secret internal strategic capabilities and external environment. The report will firstly look at the five elements which make up the Porters Five forces. Karagiannopoulos et al (2005) argues that the Five Forces model determines the average profitability of a particular industry.
2.1 The Threat of powerful suppliers
The threat of powerful suppliers for Victoria’s secret is very low, as it is difficult for Victoria’s secret suppliers to increase their prices; due to the size of the retailer and the amount of business it provides for its suppliers. Additionally due to the retailer selling a wide range of different products, it means they have a number of different suppliers. For example they would have suppliers who makes their clothing range and maybe a supplier who makes there fragrances. If Victoria’s secret wanted to change to different a supplier, it would be both time consuming and expensive for the lingerie retailer, due to the high quality of their current products and the high order quantity the company would need. It may be difficult for the company to find a supplier who can supply the same quality
1.0 Introduction
The purpose of this report is to analyse the external environment of Victoria’s Secret through the Porters Five Forces analysis and then analyse the strategy of differentiation and strategic alliances used by the leading American lingerie retailer and to evaluate if these strategies are implemented and used effectively by the company.
2.0 Analysis of the Internal Strategic Capabilities and External Environment
A leading retailer such as Victoria’s Secret has to be aware of the different factors that could have an impact on the company’s position. These factors can be identified by using a range of different analytical strategic tools; they include PESTLE, SWOT or Porters Five Forces analysis (Barney and Hesterly, 2010). However this report will use a Five Forces analysis to evaluate Victoria’s Secret internal strategic capabilities and external environment. The report will firstly look at the five elements which make up the Porters Five forces. Karagiannopoulos et al (2005) argues that the Five Forces model determines the average profitability of a particular industry.
2.1 The Threat of powerful suppliers
The threat of powerful suppliers for Victoria’s secret is very low, as it is difficult for Victoria’s secret suppliers to increase their prices; due to the size of the retailer and the amount of business it provides for its suppliers. Additionally due to the retailer selling a wide range of different products, it means they have a number of different suppliers. For example they would have suppliers who makes their clothing range and maybe a supplier who makes there fragrances. If Victoria’s secret wanted to change to different a supplier, it would be both time consuming and expensive for the lingerie retailer, due to the high quality of their current products and the high order quantity the company would need. It may be difficult for the company to find a supplier who can supply the same quality
References: Barney.B.J. and Hesterly.S.W. (2010) Strategic Management and Competituve Advantage. Concepts and Cases. 3rd edition. New Jersey:Pearson Butler.C Karagiannopoulos.G.D., Georgopoulos.N and Nikolopoulos.K. (2005) Fathoming Porter’s five forces model in the internet era. Info. 7(6) 68 Limited brands (2012): Synergy sponsorship (2008): http://www.synergy-sponsorship.com/blog/20100805/victorias-secret-touchdown-with-pink-nfl-range/ Source last accessed on the 15th November 2012 The Collegiate Licensing Company (2005): Tjemkes.B. and Furrer.O. (2010) The antecedents of response strategies in strategic alliances. Management decision. 48 (7) 1103 Victoria’s Secret 2012: Xie.T.F. and Johnston.J.W. (2004) Strategic alliances: Incorporating the impact of e-business technological innovations. Journal of business and industrial marketing. 19 (3) 209