Limited Brands Swot Analysis
Table of Contents
1. Company overview (history)
2. Current strategies
3. PEST Analysis
4. Porter Five Forces
5. Competitor Analysis
6. SWOT Analysis
7. Financial Analysis
8. Industry Outlook
9. Key Success Factors
10. Strategic Alternatives
11. Recommendations
12. Implementation Plan
13. Time-Line
14. Contingency Plan
15. Conclusion
16. Appendices
17. References
Company overview (history)
Limited Brands was founded by Leslie H. Wexner in 1963. Leslie started with one store in Columbus Ohio and is now an international company that has expanded over the world through invention and expansion, and employs over 90 000 employees. The company operates over 2600 stores that specialize in lingerie, beauty care, jewellery, …show more content…
and personal care products. The brands are sold in over 700 company operated and franchised stores worldwide.
Limited brands headquarters is located in Columbus Ohio, the first day the store opened they made $473, and the first year profits were $160 000. The company had their first public stock offering in 1969.
The family of brands that limited brands oversee are Victoria’s Secret, Bath and Body Works, Lasenza, Victoria’s Secret Pink, and Henri Bendel. Limited Brands has a total of 792 stores outside of the US.
Current strategies
The current strategy of Limited Brands is to focus on gaining the business of customers who wants to spend less by ensuring that products and services are reasonably priced. Internationally Store operations are all over the world, some of the stores are owned and some are franchised, but they all resemble; there is no visible difference to the consumer. Limited Brands works with a small number of world class partners that provide brand-right experiences. The international operators are supported by training, coaching, inspecting and coordination.
Limited Brands takes a methodical approach of test and learn. Then, they move purposefully and quickly when they’re sure they 've got it right. Their number one priority is to keep the domestic businesses healthy. Customers are excited and engaged in limited brands and the experience on the global front have been inspiring, and they are committed to maintaining the highest standards of their brands as they showcase them outside of the U.S.
Environmental Scan
Executive Summary
This environmental scan identifies issues arising from a range of key social and technological digital trends that are gaining traction in the converged media marketplace. It provides concise and critical background information concerning the issues and consequences surrounding a series of convergent digital media use trends that are impacting Canadian citizens’ choices and their everyday patterns of connectivity, consumption, and communication. From a comprehensive search of the popular literature and news coverage on convergence and digital media we identify issues of relevance to public policy makers stemming from seven digital media use trends including: cloud computing; social music; smart television; new mobilities; geolocation; data portability; and behavioral tracking.
In each case, in order to identify a range of possible adaptive interventions and measures appropriate to encourage innovation and secure consumer protections in a convergent digital media culture, this scan compares selected regulatory approaches and challenges in jurisdictions including Canada, the US, EU, UK, Korea, South Africa, Germany, Australia, China and elsewhere. These cases are briefly summarized and thoroughly documented in the list of works cited. As a result this scan identifies policy implications, regulatory innovations, and legislative interventions related to convergent media trends, including:
• increasing transparency in communications from telecoms to consumers
• placing caps on charges/fees and billing practices
• establishing command regulations with penalties attached
• mandating simplified and fair contracts and privacy agreements
• educating consumers to make informed choices
• designing harmonized approaches to consumer redress
• protecting the privacy of children and minors
• social policies designed to close digital divides
• legislation to ensure consumer data protection and enforce security rules
• regulations for reporting data breaches of consumer information
• licensing for new transmission models and content rights
This range of regulatory approaches and policies in Canada and other jurisdictions includes some measures that are principles-based and others that are more prescriptive. Not all of these initiatives will be appropriate for any one country. What emerges from this scan is a collection of controversies, challenges, opportunities and innovations, loosely joined by their relation to digital media convergence and the development of adaptive regulatory measures. Each of these initiatives arises from or responds to the quickly changing conditions of converged media cultures and shorter life-cycles of technological innovation---and are thus useful to consider as part of a bigger picture of the impact of digital media convergence on individuals, companies and organizations, and societies writ large. [1]
This report focuses on emergent modes of digital technology use among consumers, and relies heavily on mainstream and online news reportage and commentary to draw outlines around the issues at stake and highlight the corresponding implications.
To the extent they were available, reports and white papers, academic articles and trade publications were consulted, but there are many opportunities identified herein where additional research is required to fully understand the impact of these convergent media trends on Canadian consumers and citizens. This scan serves to identify some of those opportunities for future inquiry and …show more content…
analysis.
A recurrent theme in this scan, oft mentioned by regulators, industry analysts, government officials, telecom and network spokespersons, and consumers, concerns the need to develop agile regulatory policies that are flexible enough to respond to the rapid pace of change in manufacturing and adoption of convergent media content and consumer electronics. The precise shape of these adaptive policies in Canada and elsewhere is fodder for ongoing debate. What stakeholders seem in agreement about however, is that technological convergence has provoked a control crisis in the media, broadcasting, advertising, legislative and regulatory circles. This scan surveys diverse perspectives on and responses to this productive disruption, largely focused on the opportunities for innovation that result from convergent media cultures.
PEST Analysis
Porter Five Forces According to Porter, there are five forces that shape competition.
Threat of new Entrants
Competitive forces :
* Limited brands has more than 1000 suppliers all around the world and numerous distribution channels.
* Limited Brands has a lot of custumers which buy in its stores & retailers.
* The company has also large and small competitors in the clothing industry.
* New entrants have only a small chance with Limited Brands given that they have to compete with 7 famous brands carried by Limited Brands.
How is supply chain management related to the company’s business strategy ?
Concerning suppliers Limited Brands works with so many suppliers so it needs to look each step of the supply chain for each supplier at the same time.
Concerning customers Limited Brands has to improve its supply chain to respond to the market’s demand.
2. Supply chain management problems :
* Limited logistics Services wanted to implement a global supply chain in within Limited Brands but executives were
reluctant.
* Limited Brand has numerous type of IT systems which complicate the supply chain smoothness.
* Lack of flexibility in the infrastructure (point to point interface) loss of time.
Business impact :
* Delays & Schedule issues
* False interpretation and lack of data because nobody had any knowledge of the origin and the destination of the invetory
* Different segment failed to communicate properly.
3. IT system :
* 6 majors systems
* 100 applications running
* Numerous server brands : HP, IBM, Sun…
This is a mess of systems & softwares created by the multiple merges. IT has full responsability.
4. Solutions :
* Install real-time reporting & communications with suppliers and companies which deliver.
* Eliminate the Jumble of legacy systems complicating the infrastructure.
* Hiring Tibco software to fix technical problems. [continues
Threat of substitute services
Bargaining power of suppliers
Bargaining power of buyers
Rivalry
Competitor Analysis
SWOT Analysis
Strengths
• Products offered
• E-purchasing
• Customer loyalty
• Many stores worldwide Weaknesses
• Limited sizes
• Appealing to younger consumers
• Gives women a negative body image
Opportunities
• Cater to larger women sizes.
• Have plus size models.
• Make clothing available in store rather than online.
• Introduce new product. Threats
• Slowing economy
SWOT Term Project
Company Overview:
Limited Brands is a billion dollar company that encompasses the men’s and women’s clothing and accessories stores: Victoria’s Secret, Pink, Bath & Body Works, C. O. Bigelow, La Senza, White Barn Candle Co. and Henri Bendel brands. These products are available in over 2900 stores nationwide. The company also offers their customers the convenience of Victoria’s Secret Catalogue and online stores, such as www.victoriassecret.com, www.bathandbodyworks.com, www.henribendel.com, and www.lasenza.com. The La Senza brand is available in about 40 other countries, along with the websites and print catalogues push the company into the global market.
Leslie Wexner started the Limited Brand. In 1963, with $5,000 he borrowed from his aunt. Mr. Wexner opened his first store in Columbus, Ohio. The company had been family owned and operated until Wexner took Limited Brands public as LTD on the NYSE in 1969. LTD still operates in its main headquarters on Morse Road in Columbus, Ohio.
Strengths:
By initiating the acquisitions of Victoria 's Secret, Victoria’s Secret catalogue, Lane Bryant stores, a Henri Bendel store, 798 Lerner stores, and 25 Abercrombie & Fitch stores The Limited Brand has a tight grip on the apparel stores in shopping malls today. This strategy has helped LTD become a billion dollar company. All of these stores have a very strong product with a faithful customer base. LTD then developed the children’s store Limited Too, and Bath & Body Works which sells perfume, shower gels and lotions, Structure, which is a men’s clothing line, and Victoria 's Secret Beauty. Some Bath & Body Works stores were reinvented into The White Barn Candle Company stores. This is LTD’s official home fragrance brand. With careful planning and management skills LTD has a broad share in the market.
Weaknesses:
Financial Analysis
Currency in
Millions of US Dollars As of: Jan 30
2010 Jan 29
2011 Jan 28
2012
Reclassified Feb 02
2013 4 Year
Trend
Revenues 8,632.0 9,613.0 10,364.0 10,459.0
TOTAL REVENUES 8,632.0 9,613.0 10,364.0 10,459.0
Cost of Goods Sold 5,098.0 5,464.0 5,744.0 5,452.0
GROSS PROFIT 3,534.0 4,149.0 4,620.0 5,007.0
Selling General & Admin Expenses, Total 2,672.0 2,859.0 3,074.0 3,297.0
OTHER OPERATING EXPENSES, TOTAL 2,672.0 2,859.0 3,074.0 3,297.0
OPERATING INCOME 862.0 1,290.0 1,546.0 1,710.0
Interest Expense -237.0 -208.0 -246.0 -316.0
Interest and Investment Income -- 56.0 -- 13.0
NET INTEREST EXPENSE -237.0 -152.0 -246.0 -303.0
Currency Exchange Gains (Loss) -- -- -- 5.0
Other Non-Operating Income (Expenses) 19.0 27.0 149.0 6.0
EBT, EXCLUDING UNUSUAL ITEMS 644.0 1,165.0 1,449.0 1,418.0
Merger & Restructuring Charges -- -- -24.0 -17.0
Impairment of Goodwill -3.0 -- -- --
Gain (Loss) on Sale of Investments 9.0 117.0 86.0 --
Gain (Loss) on Sale of Assets -- -- 111.0 --
Other Unusual Items, Total -- -31.0 -395.0 -120.0
Other Unusual Items -- -25.0 -163.0 --
EBT, INCLUDING UNUSUAL ITEMS 650.0 1,251.0 1,227.0 1,281.0
Income Tax Expense 202.0 446.0 377.0 528.0
Earnings from Continuing Operations 448.0 805.0 850.0 753.0
NET INCOME 448.0 805.0 850.0 753.0
NET INCOME TO COMMON INCLUDING EXTRA ITEMS 448.0 805.0 850.0 753.0
NET INCOME TO COMMON EXCLUDING EXTRA ITEMS 448.0 805.0 850.0 753.0
Limited Brands, Inc., like many other companies, saw a downturn in profits and revenues during the economic slowdown. Limited Brands owns companies such as Victoria’s Secret, The Limited, Bath and Body Works and others. Chairperson and CEO Leslie Wexner did not fear the economic crisis, she did not focus on things that were out of her control, but instead, focused on getting even closer to the customer. Wexner (2010) stated, “we had to be frugal with resources, time and money…we streamlined the business, stayed lean and quick and concentrated all our efforts on the few things that produce the biggest returns.” While there was a decline between 2009 and 2010, Wexner’s efforts paid off, as Limited Brands has seen an increase in profit margin during the 2010 year.
Analyzing the notes in the income statement gives a better understanding of how Limited Brands is operating. Limited Brands fiscal year ends on the last Saturday of January each year. On January 31, 2009, the cash and cash equivalents were $1.17 million. On January 30, 2010, cash and cash equivalents were $1.8 million. According to the notes, cash and cash equivalents consist of “cash on hand, demand deposits with financial institutions and highly liquid investments with original maturities of less than 90 days” (Limited Brands, 2010). The notes also state, “The companies outstanding checks, which amounted to $76 million as of January 30, 2010 and $86 million as of January first 2009, are included in Accounts Payable on the Consolidated Balance Sheets” (Limited Brands, 2010).
Limited Brands continues to disclose the nature of their investment portfolio, which currently consists of “U.S. and Canadian government obligations, U.S. Treasury and AAA-rated money market funds, bank time deposits, and highly rated commercial paper” (Limited Brands, 2010).
Accounts Receivables 2009 were $236 million compared to 2010’s receivables balance of $219 million. Limited Brands not only monitors the use and
Industry Outlook
Key Success Factors
Strategic Alternatives
1. Cater to full figure women by starting a new line for sizes 36 - 48 C - DDD, F, G and H
Recommendations
Implementation Plan
Time-Line
Contingency Plan
Conclusion
Limited brands is no doubt a very successful company, using the vertical growth strategy they could add a new product line to enhance their business. By introducing this new healthy lifestyle line this will attract the ‘forgotten’ market of plus sized women that will feel included and catered to.
Appendices
External Factor Analysis Summary (EFAS Table) External Factors Weight Rating Weighted
Score Comments 1 2 3 4 5
Opportunities
Threats
Total Scores
NOTES: 1. List opportunities and threats (8–19) in Column 1. 2. Weight each factor from 1.0 (Most Important) to 0.0 (Not Important) in Column 2 based on that factor’s probable impact on the company’s strategic position. The total weights must sum to 1.00. 3. Rate each factor from 5.0 (Outstanding) to 1.0 (Poor) in Column 3 based on the company’s response to that factor. 4. Multiply each factor’s weight times its rating to obtain each factor’s weighted score in Column 4. 5. Use Column 5 (comments) for rationale used for each factor. 6. Add the individual weighted scores to obtain the total weighted score for the company in Column 4. This tells how well the company is responding to the factors in its external environment.
Internal Factor Analysis Summary (IFAS Table) Internal Factors Weight Rating Weighted
Score Comments 1 2 3 4 5
Strengths
Weaknesses
Total Scores NOTES:
1. List strengths and weaknesses (8–19) in Column 1.
2. Weight each factor from 1.0 (Most Important) to 0.0 (Not Important) in Column 2 based on that factor’s probable impact on the company’s strategic position. The total weights must sum to 1.00.
3. Rate each factor from 5.0 (Outstanding) to 1.0 (Poor) in Column 3 based on the company’s response to that factor.
4. Multiply each factor’s weight times its rating to obtain each factor’s weighted score in Column 4.
5. Use Column 5 (comments) for rationale used for each factor.
6. Add the individual weighted scores to obtain the total weighted score for the company in Column 4. This tells how well the company is responding to the factors in its internal environment.
SFAS Matrix 1 2 3 4 Duration 5 6 M Strategic Factors (Select the most S E important opportunities/threats H D L from EFAS, Table 4–5 and the most O I O important strengths and weaknesses Weighted R U N from IFAS, Table 5–2) Weight Rating Score T M G Comments S1 S5 W3 W4 O1 O2 O5 T3 T5 Total Scores Notes:
1. List each of the most important factors developed in your IFAS and EFAS Tables in Column 1.
2. Weight each factor from 1.0 (Most Important) to 0.0 (Not Important) in Column 2 based on that factor’s probable impact on the company’s strategic position. The total weights must sum to 1.00.
3. Rate each factor from 5.0 (Outstanding) to 1.0 (Poor) in Column 3 based on the company’s response to that factor.
4. Multiply each factor’s weight times its rating to obtain each factor’s weighted score in Column 4.
5. For duration in Column 5, check appropriate column (short term—less than 1 year; intermediate—1 to 3 years; long term—over 3 years).
6. Use Column 6 (comments) for rationale used for each factor.
TOWS Matrix INTERNAL FACTORS (IFAS) Strengths (S)
List 5 – 10 internal strengths here Weaknesses (W)
List 5 – 10 internal weaknesses here EXTERNAL FACTORS (EFAS) Opportunities (O)
List 5 – 10 external opportunities here SO Strategies WO Strategies
Threats (T)
List 5 – 10 external threats here ST Strategies WT Strategies
References
http://www.limitedbrands.com/our_company/about_us/our_founder.aspx http://www.limitedbrands.com/newsroom/media_tools/fact_sheet.aspx http://www.limitedbrands.com/international/strategy/default.aspx
http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=LTD
1. Company overview (history)
2. Current strategies
3. PEST Analysis
4. Porter Five Forces
5. Competitor Analysis
6. SWOT Analysis
7. Financial Analysis
8. Industry Outlook
9. Key Success Factors
10. Strategic Alternatives
11. Recommendations
12. Implementation Plan
13. Time-Line
14. Contingency Plan
15. Conclusion
16. Appendices
17. References
Company overview (history)
Limited Brands was founded by Leslie H. Wexner in 1963. Leslie started with one store in Columbus Ohio and is now an international company that has expanded over the world through invention and expansion, and employs over 90 000 employees. The company operates over 2600 stores that specialize in lingerie, beauty care, jewellery, …show more content…
and personal care products. The brands are sold in over 700 company operated and franchised stores worldwide.
Limited brands headquarters is located in Columbus Ohio, the first day the store opened they made $473, and the first year profits were $160 000. The company had their first public stock offering in 1969.
The family of brands that limited brands oversee are Victoria’s Secret, Bath and Body Works, Lasenza, Victoria’s Secret Pink, and Henri Bendel. Limited Brands has a total of 792 stores outside of the US.
Current strategies
The current strategy of Limited Brands is to focus on gaining the business of customers who wants to spend less by ensuring that products and services are reasonably priced. Internationally Store operations are all over the world, some of the stores are owned and some are franchised, but they all resemble; there is no visible difference to the consumer. Limited Brands works with a small number of world class partners that provide brand-right experiences. The international operators are supported by training, coaching, inspecting and coordination.
Limited Brands takes a methodical approach of test and learn. Then, they move purposefully and quickly when they’re sure they 've got it right. Their number one priority is to keep the domestic businesses healthy. Customers are excited and engaged in limited brands and the experience on the global front have been inspiring, and they are committed to maintaining the highest standards of their brands as they showcase them outside of the U.S.
Environmental Scan
Executive Summary
This environmental scan identifies issues arising from a range of key social and technological digital trends that are gaining traction in the converged media marketplace. It provides concise and critical background information concerning the issues and consequences surrounding a series of convergent digital media use trends that are impacting Canadian citizens’ choices and their everyday patterns of connectivity, consumption, and communication. From a comprehensive search of the popular literature and news coverage on convergence and digital media we identify issues of relevance to public policy makers stemming from seven digital media use trends including: cloud computing; social music; smart television; new mobilities; geolocation; data portability; and behavioral tracking.
In each case, in order to identify a range of possible adaptive interventions and measures appropriate to encourage innovation and secure consumer protections in a convergent digital media culture, this scan compares selected regulatory approaches and challenges in jurisdictions including Canada, the US, EU, UK, Korea, South Africa, Germany, Australia, China and elsewhere. These cases are briefly summarized and thoroughly documented in the list of works cited. As a result this scan identifies policy implications, regulatory innovations, and legislative interventions related to convergent media trends, including:
• increasing transparency in communications from telecoms to consumers
• placing caps on charges/fees and billing practices
• establishing command regulations with penalties attached
• mandating simplified and fair contracts and privacy agreements
• educating consumers to make informed choices
• designing harmonized approaches to consumer redress
• protecting the privacy of children and minors
• social policies designed to close digital divides
• legislation to ensure consumer data protection and enforce security rules
• regulations for reporting data breaches of consumer information
• licensing for new transmission models and content rights
This range of regulatory approaches and policies in Canada and other jurisdictions includes some measures that are principles-based and others that are more prescriptive. Not all of these initiatives will be appropriate for any one country. What emerges from this scan is a collection of controversies, challenges, opportunities and innovations, loosely joined by their relation to digital media convergence and the development of adaptive regulatory measures. Each of these initiatives arises from or responds to the quickly changing conditions of converged media cultures and shorter life-cycles of technological innovation---and are thus useful to consider as part of a bigger picture of the impact of digital media convergence on individuals, companies and organizations, and societies writ large. [1]
This report focuses on emergent modes of digital technology use among consumers, and relies heavily on mainstream and online news reportage and commentary to draw outlines around the issues at stake and highlight the corresponding implications.
To the extent they were available, reports and white papers, academic articles and trade publications were consulted, but there are many opportunities identified herein where additional research is required to fully understand the impact of these convergent media trends on Canadian consumers and citizens. This scan serves to identify some of those opportunities for future inquiry and …show more content…
analysis.
A recurrent theme in this scan, oft mentioned by regulators, industry analysts, government officials, telecom and network spokespersons, and consumers, concerns the need to develop agile regulatory policies that are flexible enough to respond to the rapid pace of change in manufacturing and adoption of convergent media content and consumer electronics. The precise shape of these adaptive policies in Canada and elsewhere is fodder for ongoing debate. What stakeholders seem in agreement about however, is that technological convergence has provoked a control crisis in the media, broadcasting, advertising, legislative and regulatory circles. This scan surveys diverse perspectives on and responses to this productive disruption, largely focused on the opportunities for innovation that result from convergent media cultures.
PEST Analysis
Porter Five Forces According to Porter, there are five forces that shape competition.
Threat of new Entrants
Competitive forces :
* Limited brands has more than 1000 suppliers all around the world and numerous distribution channels.
* Limited Brands has a lot of custumers which buy in its stores & retailers.
* The company has also large and small competitors in the clothing industry.
* New entrants have only a small chance with Limited Brands given that they have to compete with 7 famous brands carried by Limited Brands.
How is supply chain management related to the company’s business strategy ?
Concerning suppliers Limited Brands works with so many suppliers so it needs to look each step of the supply chain for each supplier at the same time.
Concerning customers Limited Brands has to improve its supply chain to respond to the market’s demand.
2. Supply chain management problems :
* Limited logistics Services wanted to implement a global supply chain in within Limited Brands but executives were
reluctant.
* Limited Brand has numerous type of IT systems which complicate the supply chain smoothness.
* Lack of flexibility in the infrastructure (point to point interface) loss of time.
Business impact :
* Delays & Schedule issues
* False interpretation and lack of data because nobody had any knowledge of the origin and the destination of the invetory
* Different segment failed to communicate properly.
3. IT system :
* 6 majors systems
* 100 applications running
* Numerous server brands : HP, IBM, Sun…
This is a mess of systems & softwares created by the multiple merges. IT has full responsability.
4. Solutions :
* Install real-time reporting & communications with suppliers and companies which deliver.
* Eliminate the Jumble of legacy systems complicating the infrastructure.
* Hiring Tibco software to fix technical problems. [continues
Threat of substitute services
Bargaining power of suppliers
Bargaining power of buyers
Rivalry
Competitor Analysis
SWOT Analysis
Strengths
• Products offered
• E-purchasing
• Customer loyalty
• Many stores worldwide Weaknesses
• Limited sizes
• Appealing to younger consumers
• Gives women a negative body image
Opportunities
• Cater to larger women sizes.
• Have plus size models.
• Make clothing available in store rather than online.
• Introduce new product. Threats
• Slowing economy
SWOT Term Project
Company Overview:
Limited Brands is a billion dollar company that encompasses the men’s and women’s clothing and accessories stores: Victoria’s Secret, Pink, Bath & Body Works, C. O. Bigelow, La Senza, White Barn Candle Co. and Henri Bendel brands. These products are available in over 2900 stores nationwide. The company also offers their customers the convenience of Victoria’s Secret Catalogue and online stores, such as www.victoriassecret.com, www.bathandbodyworks.com, www.henribendel.com, and www.lasenza.com. The La Senza brand is available in about 40 other countries, along with the websites and print catalogues push the company into the global market.
Leslie Wexner started the Limited Brand. In 1963, with $5,000 he borrowed from his aunt. Mr. Wexner opened his first store in Columbus, Ohio. The company had been family owned and operated until Wexner took Limited Brands public as LTD on the NYSE in 1969. LTD still operates in its main headquarters on Morse Road in Columbus, Ohio.
Strengths:
By initiating the acquisitions of Victoria 's Secret, Victoria’s Secret catalogue, Lane Bryant stores, a Henri Bendel store, 798 Lerner stores, and 25 Abercrombie & Fitch stores The Limited Brand has a tight grip on the apparel stores in shopping malls today. This strategy has helped LTD become a billion dollar company. All of these stores have a very strong product with a faithful customer base. LTD then developed the children’s store Limited Too, and Bath & Body Works which sells perfume, shower gels and lotions, Structure, which is a men’s clothing line, and Victoria 's Secret Beauty. Some Bath & Body Works stores were reinvented into The White Barn Candle Company stores. This is LTD’s official home fragrance brand. With careful planning and management skills LTD has a broad share in the market.
Weaknesses:
Financial Analysis
Currency in
Millions of US Dollars As of: Jan 30
2010 Jan 29
2011 Jan 28
2012
Reclassified Feb 02
2013 4 Year
Trend
Revenues 8,632.0 9,613.0 10,364.0 10,459.0
TOTAL REVENUES 8,632.0 9,613.0 10,364.0 10,459.0
Cost of Goods Sold 5,098.0 5,464.0 5,744.0 5,452.0
GROSS PROFIT 3,534.0 4,149.0 4,620.0 5,007.0
Selling General & Admin Expenses, Total 2,672.0 2,859.0 3,074.0 3,297.0
OTHER OPERATING EXPENSES, TOTAL 2,672.0 2,859.0 3,074.0 3,297.0
OPERATING INCOME 862.0 1,290.0 1,546.0 1,710.0
Interest Expense -237.0 -208.0 -246.0 -316.0
Interest and Investment Income -- 56.0 -- 13.0
NET INTEREST EXPENSE -237.0 -152.0 -246.0 -303.0
Currency Exchange Gains (Loss) -- -- -- 5.0
Other Non-Operating Income (Expenses) 19.0 27.0 149.0 6.0
EBT, EXCLUDING UNUSUAL ITEMS 644.0 1,165.0 1,449.0 1,418.0
Merger & Restructuring Charges -- -- -24.0 -17.0
Impairment of Goodwill -3.0 -- -- --
Gain (Loss) on Sale of Investments 9.0 117.0 86.0 --
Gain (Loss) on Sale of Assets -- -- 111.0 --
Other Unusual Items, Total -- -31.0 -395.0 -120.0
Other Unusual Items -- -25.0 -163.0 --
EBT, INCLUDING UNUSUAL ITEMS 650.0 1,251.0 1,227.0 1,281.0
Income Tax Expense 202.0 446.0 377.0 528.0
Earnings from Continuing Operations 448.0 805.0 850.0 753.0
NET INCOME 448.0 805.0 850.0 753.0
NET INCOME TO COMMON INCLUDING EXTRA ITEMS 448.0 805.0 850.0 753.0
NET INCOME TO COMMON EXCLUDING EXTRA ITEMS 448.0 805.0 850.0 753.0
Limited Brands, Inc., like many other companies, saw a downturn in profits and revenues during the economic slowdown. Limited Brands owns companies such as Victoria’s Secret, The Limited, Bath and Body Works and others. Chairperson and CEO Leslie Wexner did not fear the economic crisis, she did not focus on things that were out of her control, but instead, focused on getting even closer to the customer. Wexner (2010) stated, “we had to be frugal with resources, time and money…we streamlined the business, stayed lean and quick and concentrated all our efforts on the few things that produce the biggest returns.” While there was a decline between 2009 and 2010, Wexner’s efforts paid off, as Limited Brands has seen an increase in profit margin during the 2010 year.
Analyzing the notes in the income statement gives a better understanding of how Limited Brands is operating. Limited Brands fiscal year ends on the last Saturday of January each year. On January 31, 2009, the cash and cash equivalents were $1.17 million. On January 30, 2010, cash and cash equivalents were $1.8 million. According to the notes, cash and cash equivalents consist of “cash on hand, demand deposits with financial institutions and highly liquid investments with original maturities of less than 90 days” (Limited Brands, 2010). The notes also state, “The companies outstanding checks, which amounted to $76 million as of January 30, 2010 and $86 million as of January first 2009, are included in Accounts Payable on the Consolidated Balance Sheets” (Limited Brands, 2010).
Limited Brands continues to disclose the nature of their investment portfolio, which currently consists of “U.S. and Canadian government obligations, U.S. Treasury and AAA-rated money market funds, bank time deposits, and highly rated commercial paper” (Limited Brands, 2010).
Accounts Receivables 2009 were $236 million compared to 2010’s receivables balance of $219 million. Limited Brands not only monitors the use and
Industry Outlook
Key Success Factors
Strategic Alternatives
1. Cater to full figure women by starting a new line for sizes 36 - 48 C - DDD, F, G and H
Recommendations
Implementation Plan
Time-Line
Contingency Plan
Conclusion
Limited brands is no doubt a very successful company, using the vertical growth strategy they could add a new product line to enhance their business. By introducing this new healthy lifestyle line this will attract the ‘forgotten’ market of plus sized women that will feel included and catered to.
Appendices
External Factor Analysis Summary (EFAS Table) External Factors Weight Rating Weighted
Score Comments 1 2 3 4 5
Opportunities
Threats
Total Scores
NOTES: 1. List opportunities and threats (8–19) in Column 1. 2. Weight each factor from 1.0 (Most Important) to 0.0 (Not Important) in Column 2 based on that factor’s probable impact on the company’s strategic position. The total weights must sum to 1.00. 3. Rate each factor from 5.0 (Outstanding) to 1.0 (Poor) in Column 3 based on the company’s response to that factor. 4. Multiply each factor’s weight times its rating to obtain each factor’s weighted score in Column 4. 5. Use Column 5 (comments) for rationale used for each factor. 6. Add the individual weighted scores to obtain the total weighted score for the company in Column 4. This tells how well the company is responding to the factors in its external environment.
Internal Factor Analysis Summary (IFAS Table) Internal Factors Weight Rating Weighted
Score Comments 1 2 3 4 5
Strengths
Weaknesses
Total Scores NOTES:
1. List strengths and weaknesses (8–19) in Column 1.
2. Weight each factor from 1.0 (Most Important) to 0.0 (Not Important) in Column 2 based on that factor’s probable impact on the company’s strategic position. The total weights must sum to 1.00.
3. Rate each factor from 5.0 (Outstanding) to 1.0 (Poor) in Column 3 based on the company’s response to that factor.
4. Multiply each factor’s weight times its rating to obtain each factor’s weighted score in Column 4.
5. Use Column 5 (comments) for rationale used for each factor.
6. Add the individual weighted scores to obtain the total weighted score for the company in Column 4. This tells how well the company is responding to the factors in its internal environment.
SFAS Matrix 1 2 3 4 Duration 5 6 M Strategic Factors (Select the most S E important opportunities/threats H D L from EFAS, Table 4–5 and the most O I O important strengths and weaknesses Weighted R U N from IFAS, Table 5–2) Weight Rating Score T M G Comments S1 S5 W3 W4 O1 O2 O5 T3 T5 Total Scores Notes:
1. List each of the most important factors developed in your IFAS and EFAS Tables in Column 1.
2. Weight each factor from 1.0 (Most Important) to 0.0 (Not Important) in Column 2 based on that factor’s probable impact on the company’s strategic position. The total weights must sum to 1.00.
3. Rate each factor from 5.0 (Outstanding) to 1.0 (Poor) in Column 3 based on the company’s response to that factor.
4. Multiply each factor’s weight times its rating to obtain each factor’s weighted score in Column 4.
5. For duration in Column 5, check appropriate column (short term—less than 1 year; intermediate—1 to 3 years; long term—over 3 years).
6. Use Column 6 (comments) for rationale used for each factor.
TOWS Matrix INTERNAL FACTORS (IFAS) Strengths (S)
List 5 – 10 internal strengths here Weaknesses (W)
List 5 – 10 internal weaknesses here EXTERNAL FACTORS (EFAS) Opportunities (O)
List 5 – 10 external opportunities here SO Strategies WO Strategies
Threats (T)
List 5 – 10 external threats here ST Strategies WT Strategies
References
http://www.limitedbrands.com/our_company/about_us/our_founder.aspx http://www.limitedbrands.com/newsroom/media_tools/fact_sheet.aspx http://www.limitedbrands.com/international/strategy/default.aspx
http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=LTD