SWOT Analysis
Current Product/Service Mix
Limited Brands own five brands which are Victoria's Secret, Pink, Bath and Body Works, La Senza, and Henri Bendel. Victoria’s Secret consists of women intimate apparel, beauty products, sleepwear, and hosiery among other products. Victoria's Secret is the largest contributor to the parent company in terms of sales which were just over $4 billion in the fiscal year 2010. Pink is an extension of the mainstream Victoria's Secret brand and is targeted at college girls and campus life. Products offered under the Pink label include sleepwear, loungewear, bras, and panties. Bath and Body Works is a line of home scent and personal care products that includes shower gels, lotions, spa products, and candles. Whereas Victoria's Secret and Pink brands aim for mass market, La Senza targets market for exclusive higher quality products including lingerie, sleepwear, loungewear, body care, and accessories. La Senza’s main operations are based in Canada though the brand does operate franchise 48 other countries. Henri Bendel offers accessories such as handbags, totes, wallets, key fobs, jewelry, fragrance collection, and other related products.
Looking at the product offerings of all five brands, it is apparent that Limited Brands is almost entirely focused on women. The strategy has served Limited Brands well because intimate wear industry and personal care industry are highly lucrative and most of the sales in these respective industries come from the female segment. Limited Brands can be credited with developing the women mass market intimate wear industry almost by itself through clever marketing and promotion of its Victoria's Secret brand. The company has the same opportunity to develop men mass market intimate wear industry by applying Victoria's Secret lessons to the Victor's Solution brand.
Strengths
Victor's Solution is being introduced by the same company that has already succeeded in defining the women mass market intimate wear industry which is more competitive than men inner wear sector. Thus, victor’s solution is already in an advantageous position as compared to other potential entrants because it has access to Limited Brands’ huge resources, wide experiences, and an established retail network. Moreover, Victor’s Solution will also inspire confidence in customers and lessen their hesitation because of its association with Limited Brands and Victoria’s Secret. Victor’s Solution will be initially sold through Victoria's Secret’s outlets, thus, it already has access to an established distribution infrastructure.
Weaknesses
One weakness in this venture is the characteristics of the men intimate wear industry. Even though most women consider intimate wear as a fashion and style product, most men buy inner wear for functional purpose and do not pay as much attention to style and looks as women do. Thus, it is yet to be seen whether Victor's Solution can generate attractive sales volume and profit margins like Victoria's Secret. Another weakness is that even though Limited Brands has extensive experience in the women intimate wear industry, it has no experience in the men inner wear industry. There is also a possibility that mass market men inner wear brands such as Fruit of the Loom which is also America’s biggest seller of men’s brief (Funding Universe) and Hanes respond by offering upscale extensions of their existing products or introduce new brands in order to protect their territory. Unlike Limited Brands, Fruit of the Loom and Hanes have already accumulated experience as well as marketing data on men inner wear industry over the years.
Opportunities
Just like Limited Brands redefined women mass market intimate wear industry, it has an opportunity to redefine men mass market inner wear industry. Competitors such as Fruit of the Loom and Hanes primarily focus on the functionality of the product and Limited Brands has an opportunity to market Victor's Solution products as trendy and fashion products. Limited Brands also has more resources than either Fruit of the Loom or Hanes; Victoria’s Secret alone generates higher sales than Fruit of the Loom and slightly lower than Hanes whose sales in the fiscal year 2010 was $4.58 billion (Yahoo!). Thus, Limited Brands can afford extravagant marketing campaign for Victor's Solution just like Victoria’s Secret and in addition, Limited Brands also has the added benefit of greater control over its distribution channels. Hanes and Fruit of the Loom are dependent on retailers such as Wal-Mart and Target etc. while Limited Brands will distribute Victors solutions through Victoria's Secret’s retail outlets. Hanes and Fruit of the Loom will have to considerably change their present image which could even cause confusion among customers whereas Limited Brands is already associated with glamorous and trendy products.
Threats
One of the threats to Victor's Solution may be consumer habits. It is possible that our male customers may not be willing to pay as high prices as female customers and in addition, they may buy fewer items than their female counterparts on each visit. In addition, there are high scale brands such as Calvin Klein, Emporio Armani, and Joey Boxer who have higher brand recognition than Victor's Solution. These brands may prove to be tougher competitors than expected though Victor’s Solution will be able to offset some of the disadvantages through its association with Victoria’s Secret.
Summary and Conclusions
The greatest challenge for Victor's Solution will be to create men mass market trendy inner wear sector just like its sister brand Victoria's Secret did. To do so, Victor's Solution has to do a good job of understanding its targeted market, introducing well thought product line, and then support the brand through innovative marketing and brand-building activities. Victor’s Solution will also have to invest in design and research so that it can offer differentiated products to the market and develop pricing power in the face of competition.
This concept can capitalize on Limited Brand’s core strengths in brand development as well as Victoria’s Secret efficient marketing and supply chain management capabilities. Competitors such as Hanes and Fruit of the Loom are already mass market brands and high scale brands such as Calvin Klein and Emporio Armani have greater brand recognition. Victor’s Solution can make up for the disadvantages by pursuing mass market differentiation strategy which will allow it to be distributed on a wide scale yet also retain a trendy brand image.
Victor’s Solution has a great future because it is pursuing a mass market differentiation strategy which is not being pursued by anyone and a great marketing plan will enable it to develop a trendy image. Victor’s Solution will also have access to Limited Brands’ vast resources thus, it can afford few missteps in the beginning as it tries to better understand its targeted customer segments. Victor’s Solution will also benefit from Victoria’s Secret distribution channels and there is also a possibility that many Victoria’s Secret customers will purchase Victor's Solution products for their significant others.
During the research and preparation of this paper, it became clear that planning is extremely important for any new company because it not only allows the company to understand itself and the competitive environment better but also identify obstacles that may influence its success potential. Before a company plans a new venture, it has to understand its customers as well as their needs that it intends to fulfill. In addition, company should not only identify opportunities and strengths but also weaknesses and threats so that I can take steps to counter them.