VRIO Analysis of Victoria Secrets

VRIO Analysis of Victoria Secrets

Innovative products

Value: Victoria Secrets provides inventive and classy merchandise at a reasonable price. In addition to this, the products have both aspirational value and functional value. In terms of functional value, they have a push-up design, while for the aspirational value; the collections are linked to Victoria’s Secret fashion show, which is a world-famous show. The store additionally keeps launching new products while still maintaining staples that drive growth, sales, and store traffic (Osborne, 2016).

Rarity: The store also selects dealers that are inventive and technically advanced in manufacturing. These dealers can keep up with the swift concept-to-market objectives of fashion products which makes it very recognizable.

Imitability: Though Victoria Secrets is very innovative other firms might copy the technology used.

Organized to value: Victoria Secrets is based on the philosophy of  Read, React, and Chase. Therefore, the interior design studios of the company are always in search of inspiration for new product designs. New ideas are continuously being tested in selected stores of the company. That explains how the pink product line was innovated to attract younger and college-aged females.

Partnership with Best Manufacturers

Value: The Company associates with selected contract manufacturers who are ordinarily small and agile. Besides, the store sources for 90 per cent of its products through open buy arrangements, which promote greater innovation.

Rarity: The firm treats fashion launches differently from basic product launches in retailing (Ouellette, 2019). The company then releases products from its supply centres to its retail shops in amounts that are intended to meet specific sales targets.

Imitability: In the short term, other lingerie stores find it difficult to partner with the best manufacturers since lots of resources will be required.

Organized to Value: The Primary products of Victoria Secrets come from the stores in measures that are dictated by the number of sales made and replacement needs. That makes the firm flexible in managing various sets of products.

Perfect Interior Design and SalesForce

Value:  Unlike other lingerie stores, Victoria Secrets has adopted high-quality interior design choices and has employed a competent sales force. This makes clients more comfortable at their stores.

Rarity: Victoria Secrets stores create the experiential value that assists in differentiating it. It has perfect interior designs, including music, décor, fixtures, and lighting, which promote a feeling of feminine luxury (Victoria Secrets, 2018). In addition to this, the company stores have a unique layout, separate fashion launches from basic collections, and multiple adjacent room-like spaces that display panties and bars to increase bundled sales and browsing time.

Imitability: It is difficult to imitate this aspect of Victoria Secret’s brand because it might be difficult for other stores to invest in the best interior design and sales force since lots of financial resources are needed.

Organized to value: Additionally, it has sales associates who are a significant asset to the organization and critical to its success. Victoria Secrets is committed to building a sales force that could offer customers maximum comfort. Besides, it hires and trains associates accordingly.

Catalogues

Value: The store has catalogues which one can acquire by to going to the company’s website, enter their email address, and the catalogue will be delivered to the doorstep at no extra cost

Rarity: The Company has catalogues that are more creative than other news magazines, and it makes it easy to get them. Also, unlike other lingerie shops, Victoria Secrets portrays an image of beauty and class. It chooses models that have classic features.

Imitability: Victoria Secrets catalogues are very creative, and it would, therefore, take other stores sometime before they match the company’s catalogues.

Organized to value: The company supplies over 390 million prints of the company catalogues yearly in America alone (Osborne, 2016). Sometimes it also sends free catalogues to any person that has subscribed to the magazine irrespective of their gender.

Multiple Channels

Value:  The Company sells its merchandise through catalogues, retail stores, and the internet. That reinforces the brand and increases sales prospects, which help clients to purchase what they want anywhere and anytime. The customers buying over several channels, however, spend about three to five times more than those that use a single channel which increases sales (Perpiñá, 2019).

Rarity: Unlike other stores, company executives could choose between the multiple channels for the method of presentation that suits them best and enhances the appeal of a product. Shoppers may, for example, buy the products that they would like to try on through the company’s stores.

Imitability: It would take other stores some time to invest in several channels.

Organized to Value: When Victoria Secret customers view the individual items in catalogues and on the company website may seem beautiful because they are worn by models.

This increases their sales because, inside the company’s stores, some of the clothes may be placed on racks making them less appealing.

Value Chain Analysis

Primary Undertakings

The primary undertakings of Victoria Secrets are linked to fabricating and vending the merchandise to their target clientele. The examination of value chain activities could help in improving the company’s performance.

Marketing and Sales

Victoria Secrets marketing and sales activities comprise of promotional activities, use of a sales force, selecting the right channel, building relations with members of a channel, quoting, and pricing. The firm has one of the most successful advertising strategies. It spends around $66 million every year on advertising to define beauty as well as packaging for its clients (Ouellette, 2019). In addition to this, there are several catalogues, newspaper ads as well as televised fashion shows which convince women that buying form the company will increase their confidence and improve their appeal. In terms of sales, the company sales are higher than those of other underwear brands. The company has integrated software for data mining and analysis to increase its sales further. The company workers use a data depository which trails the sales of every single piece of a product. It then uses this data to decide how to distribute the products. The company’s marketing activities have been successful because its likes on Facebook are 25 million. It also has 7 million followers on Twitter and approximately 670,000 subscribers on Youtube (Element Three, 2019). The firm has also increased its marketing expenses to $476 from $383 to reach a wider audience.

Distribution

The store uses various distribution channels. The products are sold through retail stores, the internet, and catalogues. It spends about $220 million on catalogues that are sent to customer homes. Also, the brand has increased its stores to 1,170, and each store generates around $5 million annually (Pinchera & Rinallo, 2019). This results in strengthening of the brand’s sales through increased access to customers and which lets them purchase their merchandise regardless of the place and time from which they prefer to shop. Through the various channels, the store understands that customers possess dissimilar buying attitudes and wants that have an impact on their way of shopping.

Secondary Activities

These reinforce the primary activities.

Human resources

Victoria Secret has about 20,000 workers, and it offers its workers an inclusive and productive workplace. It also provides various benefits, including health care benefits and dental coverage. Its workers are offered an affordable medical insurance plan which covers several health issues (Perpiñá, 2019). Additionally, there is a monthly bonus that inspires the workers to attain their monthly goals to get bonuses. The store also supports a worker mentorship program that ensures workers get comprehensive training of how things work. In recruitment, a vast pool of applicants is attracted, which ensures that the company recruits competent staff. Also, its employees receive 50 per cent off of everything they buy before the holidays. These benefits attract competent people to work at the company.

Technology

Victoria Secrets has doubled its technology infrastructure on point-of-sale systems and inventory management. In addition to this, technological advancements are helping the company to stock high-quality lingerie and skincare products (CEOWORLD magazine, 2019). This is essential in a technologically innovative era where all the value chain activities are influenced by technological support. The company’s investments in technological infrastructure, as well as distribution, centres have risen from $96 million to $135 million, and the upgrades are expected to continue rising to $175 million (Element Three, 2019). As a result, the firm has been able to record sales of $659 million each month, which beats other stores such as Target, Macy Saks, Gap and Wet Seal.

References

CEOWORLD magazine. (2019, August 2). Profile: Facts About Victoria’s Secret You Should Know > CEOWORLD magazine. Retrieved from https://ceoworld.biz/2019/08/02/profile-facts-about-victorias-secret-you-should-know/

Element Three. (2019, May 7). The Brand Development of Victoria’s Secret. Retrieved from https://elementthree.com/blog/brand-development-victorias-secret/

Osborne, N. (2016). Undressing Victoria the new luxury brand. Professional Beauty, (May/Jun 2016), 122.

Perpiñá Subiñas, E. (2019). Victoria’s Secret: Are Tables Turning in Heaven?. LBMG Corporate Brand Management and Reputation-Masters Case Series.

Pinchera, V., & Rinallo, D. (2019). Marketplace icon: the fashion show. Consumption Markets & Culture, 1-13.

Ouellette, M. A. (2019). And nothing she needs”: Victoria’s Secret and the Gaze of “Post-Feminism. Visual Culture & Gender, 14, 6-17.

Victoria Secrets. (2018). Our Brands – Victoria’s Secret. Retrieved from https://www.lb.com/our-brands/victorias-secret

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