VS - Entering Russia Margarita Sarian Jesse Brosten Jenny...

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Entering Russia M argarita S arian J enny J ao J esse B rosten S am M azumdar N ick S hum L aura M ontigiani
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Brand Image/Reputation Premium Prices & High Volume of Sales Margin Cost Effectiveness Invest in Core Competencies /Uniqueness Strong Advertising/ Brand promotion Introduce New products Source products from around the world Multiple Distribution Channels & use of technology Because it invests so strongly in brand image and reputation through the use of multiple promotional campaigns, Victoria’s Secret is able to dominate the lingerie market in the United States; with little competition, the company is able to introduce new products through its multiple distribution channels (web, in-store & catalog), while still ensuring accurate distribution with its highly technological inventory system. Using its network of suppliers from all over the world, it can source products at lower costs. The Victoria’s Secret Business Model
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What Travels Overseas 2 1 3 4 Retail Distribution (1000+ stores) Marketing & Brand Image Victoria’s Secret Direct (online store) Product Sourcing NO YES/ NO YES YES Core Competency Does it travel? Why? What is needed Physical number of stores does not transfer Need to build stores from scratch (greenfield operation), or through acquisition of other existing stores in Russia Summary (work in progress) Transfers because VS can use their marketing expertise in Russia Does not transfer because most of the advertising and promotions are currently done nationally. There is no International exposure of advertisements and fashion shows. Need to establish new marketing strategies/campaigns geared specifically towards the Russian market to create similar Brand Image in Russia The infrastructure for the online store (their website) is already set up. Need to have a website that is geared towards Russian culture. Promotions should be based off the Russian calendar. Website has to be fully localized. Victoria’s Secret manufactures most of its apparels in the Middle East and Asia through third party suppliers. Therefore the competitive advantage is not lost. The only added costs would come from shipping, political, and economic differences.
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work in progress Stringent labor laws; limit overtime hours, with 28 days of required paid vacation 14.5% tariff – higher than other middle-income countries Guaranteed universal healthcare Flat tax to dissolve ubiquitous tax evasion Political Middle class has grown from 8 million in 2005 to 55 million in 2006 – continues to grow Fixed capital investments have averaged real gains of 10% per year Personal income has increased at a steady 12% per year Weaker infrastructure Apparel market increasing at a rate of 30% per annum Economic Over 160 different ethnic groups within Russia 63% are orthodox Christian Guaranteed universal health care Life expectancy of 67 Entry to higher education is extremely competitive Stagnant population due to
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VS - Entering Russia Margarita Sarian Jesse Brosten Jenny...

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