L Brands SWOT and PESTLE Analysis

Strength

1. Well poised for long term growth through the international business: L Brands has grown a lot since inception, from a single store in 1963 to 3,000 own stores and 650 franchisees across the world. Though a major focus initially was on growing the domestic market, the opening of own stores and franchises in other countries has put L Brands in a great position for long term growth through the international business. The first Victoria’s Secret store outside North America was opened in 2012 in UK. Currently these stores are opening up around the world. Ever since the opening of the first Bath & Body Works store outside North America in 2010, the brand has now expanded to include 250 stores around the world under license, franchise and wholesale arrangements.

2. Top brands representing aspirational lifestyle: The essence of L Brands lies in its 3 brands that have grown in popularity over the years: Victoria’s Secret, Bath & Body Works and Pink. These brands represent an aspirational lifestyle in the eyes of the customers. Through these brands, the company is able to target various demographics around the world. The highly recognizable nature of the brands provides competitive advantage. Victoria’s Secret sells glamorous and sexy product lines in lingerie, fragrances, loungewear, beauty products, sleepwear, personal care accessories and athletic attire. Pink caters to the needs of female college students, selling lingerie, loungewear, apparel, accessories and athletic attire. Bath & Body Works takes care of the complete well-being of customers, providing them aromatherapy, shower gels, soaps, sanitizers, home fragrances and body care accessories.

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Weakness

1. Decreasing R&D expenditure compared to industry rivals: Since the global recession in 2008 the R&D expenditure of Panasonic Corp has steadily decreased from more than $5 Billion to slightly less than $4 Billion in 2017. These figures seem to be small when compared to its industry rivals such as its South Korean counterparts Samsung, LG, and even some of the new Chinese entrants such as Haier. Samsung R&D expenditure last year stood just below $ 13 Billion whereas LG’s expenditure stood above $ 4 Billion with a steady growth rate of around 7%. The Japanese firms such as Sony, Panasonic, Hitachi and Toshiba that cater the white goods market segment have experienced stagnation in sales and revenues in the past decade because of low R&D expense.

Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Protection of endangered forests: There is a rising concern towards the shrinking forest cover around the world due to trees being cut down for raw material. L Brands focuses on responsible sourcing of forest products by avoiding products that contribute to deforestation. The company’s Forest Products Procurement Policy ensures the reduction in threats to endangered forests. L Brands works with suppliers to ensure paper products are sourced from recycled content. Paper procurement from endangered forests has been completely phased out by the company and $1 million in contributions have been made for research related to protection of endangered forests.

2. Reduction of Greenhouse gas emissions: L Brands has partnered with the US Environmental Protection Agency for reduction in greenhouse gas emissions. During the last decade the company has achieved 3% reduction in emissions. The company continues to further reduce emissions through improvement in efficiency and conservation of fossil fuels. Efficient lighting projects implemented by the company have reduced electricity consumption in stores in USA and Canada by 22,000,000 kWh and in the home office by 12,500,000 kWh. The company also works with logistics partners to ensure efficiency in transport of goods to reduce the impact on the environment. A partnership with the Environmental Protection Agency’s SmartWay Partnership Program has led to 98% of the company’s domestic carriers being certified as low emission carriers.

The remaining section of “Environment” is available only in the 'Complete Report' on purchase.