International expansion proposal Essay Example | Topics and Well Written Essays - 1500 words

International expansion proposal - Essay Example The company is wholly owned by publicly traded Limited Brands Company; operating 1,017 company-owned stores and 18 independently owned stores, with annual sales of $6 billion and an operating cost of $1 billion as of 2012. The company has hierarchic system of governance with Sharen, Jester Turney as the CEO and President of Victoria’s Secret Megabrand and Intimate Apparel while Lori Greely as the CEO of Victoria’s Secret stores. (Website:www.victoriassecret.com/victorias-secret-sport). Victoria’s Secret intends to diversify its market by opening new branches in China; the world’s most populous country with population of over 1.35 billion people, second largest country in the world by land area after Russia and a socialist country espousing communism (Meng, 2011). Economically, it is the second-largest economy in terms of nominal Growth Domestic Product [GDP] totalling approximately $8.227 trillion by 2013 as per International Monetary Fund [IMF]. Reasons f or expansion to China To tap into the growing market of the China’s women population 48.73%, and demographic distribution of 13.3% and 42.8% on 0-14 years and 15-59 years respectively. Tap into the industrialization advantage in China to reduce cost of production Maximize profitability with the competitive exchange rate To maintain the competitive standards of Victoria’s Secret and brand image as a global outfit To tap into China’s skilled and multi-talented fashion designers, workforce, view point and knowledge to ensure growth as a company To tap into China’s economic wellbeing and favourable trading environment Tap into China’s favourable climatic environment and Sporting culture of basketball, tennis, swimming and martial arts Internal Analysis Value Victoria’s Secrets has with time strengthened value on its products starting with lingerie to diversify to sporting attires, swimming costumes, bras, panties, sleeping gowns, clothing and sh oes. The launch of â€Å"PINK†, a new lingerie line targeting 15-22 years old with products such as underwear, sleepwear, loungewear, beauty products and accessories; will create value in the new Chinese market more so through their product lines such as Angels, Very Sexy and Body by Victoria, intended to transition buyers into more adult product lines. The competitive exchange rate of the dollar and the Chinese Yuan, gives the company a competitive advantage of price and cost leadership giving the company capability to mitigate threats in the market (Barney & Hersterly, 2010). Rarity The uniqueness of design and the PINK product line creates the competitive advantage in the Chinese market coupled with the new accessories and fragrance lines which will match with the economies age distribution. The company’s customer service experience coupled with loyalty cards promotions and effective marketing strategies such as their catalogue, sporadic arts in fashion publications and referrals/word of mouth will help conquer the new market. In addition the company has employed social media marketing with incorporation of sites such as Twitter, Facebook and Pinterest account; expanding its website to feature behind-the-scene contents of its catalogue, in the Victoria’s Secret Direct, which are the strategies we can apply in the new market to lure the youthful and techno-savvy population. Imitability Most of the products by the