Corporate Strategy Case Study – Victorias Secret

My second blog post is going to discuss the Corporate Social Responsibility of Victorias Secret and whether their strategy is competitive with parallel brands. I will do this by analysing their sustainable innovation, eco-design, toxicity, social aspects and their overarching strategy amongst other claims of CSR they are making. First, however, it is important for us to discuss what CSR means in regards to a business model. Today consumers are more interested than ever when it comes to being environmentally friendly, so it is of great importance for a brand to be responsible when addressing social and environmental issues (Post, 2017). Brands are beginning to make more effort when it comes to being environmentally friendly, philanthropy and ethical labour practices all of which add up to the value of a brands CSR.

Victorias Secret is owned by mother company L Brands, who also own Pink, La Senza, Bath and Body Works and Henri Bendel. Victorias Secret is the biggest lingerie brand in the US, with over 1,000 shopping locations and over 20% of the total US market share (Snyder, 2014). Mintel discovered in 2016 that 89% of Victorias Secret shoppers would recommend the brand to a friend, so it will be interesting to see how they differentiate themselves and use brand values to remain the lingerie power house.

L Brands make large claims on behalf of Victorias Secret stating “We are committed to doing well by doing right. We are leaders in our communities, stewards of the environment and making positive strides for better business practices.” Their aims of doing right are controlled by five major compliances:

  • Making a difference – Les Wexner, CEO and founder of L Brands prides himself in creating a brand who ultimately aim to have to ability to give back. This is done through supporting community programmes to empower women, nurturing and mentoring children and improving education. In 2016 alone L brands Foundation invested more that $18.6 million to non profit organisations. It is incredibly evident that L Brands are doing a great job with charitable giving, in 2004 they responded to the Southeast Asian Tsunami by delivering shelter, mattresses and hygiene kits, providing volunteers and thousands of hours worth of help. It has also been proven that companies who give to charity actually increase their revenue by doing so (Rimmer, 2013).
  • Supply Chain Overview – It is of no surprise that L Brands keep a close eye on their supply chain, stating that the quality of garments relies on the fair treatment of the staff during production. There are internal auditing processes that ensure the management of the supply chain remains seamless, multiple codes of conduct that suppliers and associates have to adhere to which enables a happy environment for all companies involved. They claim that they are able to look into all aspects of the supply chain without a moments notice to ensure action is taken upon any in-discrepancies. However, the brand does not currently disclose any specific information of supplier names or addresses and it is unclear if the brand is able to trace the supply chain itself.
  • Product Overview – To provide high quality, safe and effective products are the main aims of L Brands. Testing is stringent, they ensure they use components that are second to none, these components are then put through their paces by specialist textile and fabric technicians who test fit, comfort, performance, design and durability. Oeko 100 is a standard that Victorias Secret use for all of their garments, it is a prestigious standard that has been enhancing the performance and safety of garments since 1992. In order to maintain this award all raw materials are tested to ensure that all of their finishes comply with their regulations. This includes banned azo colourants, formaldehyde, pentachlorophenol, cadmium amongst other rules relating to the environment, REACH and requirements from the US Consumer Product Safety Improvement Act.
  • Environmental Overview – The environmental impact of their brand is clearly very important to Victorias Secret where they are constantly looking for ways in which to reduce their carbon footprint. They are doing this by investing research into more sustainable or reusable materials and introducing programmes to reduce energy consumption. They have received many awards for their environmental efforts including two gold achievements awards from the US EPA WasteWise Programme and being included on the FTSE4Good Index in 2014, 2015 and 2016.
  • Inclusion – Inclusion at L Brands ranges from their staff, through their Angels, manufacturing bases right through to their customers. Victorias Secret is an incredibly diverse brand filled with talents from all over the globe who all come from different lives. They are able to give back to communities enabling to help them thrive, partnering with National Black MBA Association, National Urban League and National Council of La Raza amongst many others.

However, when looking at the 2017 Ethical Fashion Report, all of the L Brands Company only score a D+ on the overall scale. Their highest score came from final manufacturing, where traceability and monitoring were the only aspects they were commended for. They scored very low for inputs and raw materials and their living wage throughout the brand was scored at a dismal 0%. This is very disappointing as a large brand who have proven to make many promises to consumers and employees alike are falling short on their values. It will be incredibly interesting to see if the Ethical Fashion Report has an impact on future sales in 2017.

What is really interesting to see is the lack of open transparency from the brand. They have a lot of information online as to what they are doing and what they aim to do. Their CSR is often  not all what it appears with bad press revealing discrepancies within their morals. Project Just discovered an incredibly interesting set of data, where the overall consensus was that they are not complying with all of the promises they are making (please read more here https://projectjust.com/brands_victoriassecret/). The depth and vigour of their CSR is clearly not as genuine as consumers may hope. The sheer success of Victorias Secret begs the question if consumers are as interested in the ethics behind a company as they claim.

Bibliography:

Lb.com. (n.d.). L Brands – Mast Global. [online] Available at: https://www.lb.com/our-company/mast-global [Accessed 1 May 2017].

Lb.com. (n.d.). L Brands – Responsibility. [online] Available at: https://www.lb.com/responsibility [Accessed 1 May 2017].

Mintel (2017). Underwear – June 2016. [online] Academic.mintel.com. Available at: http://academic.mintel.com/display/774530/?highlight#hit1 [Accessed 1 May 2017].

Oeko-tex.com. (n.d.). OEKO-TEX® | STANDARD 100 by OEKO-TEX®. [online] Available at: https://www.oeko-tex.com/en/business/certifications_and_services/ots_100/ots_100_start.xhtml [Accessed 1 May 2017].

Post, J. (2017). What is Corporate Social Responsibility?. [online] Business News Daily. Available at: http://www.businessnewsdaily.com/4679-corporate-social-responsibility.html [Accessed 1 May 2017].

Project JUST. (n.d.). Victoria’s Secret: ethics, sustainability, labor rights data. [online] Available at: https://projectjust.com/brands_victoriassecret/ [Accessed 1 May 2017].

Rimmer, A. (2013). Most consumers favour companies that support charities, says study. [online] Thirdsector.co.uk. Available at: http://www.thirdsector.co.uk/consumers-favour-companies-support-charities-says-study/fundraising/article/1183955 [Accessed 1 May 2017].

Snyder, B. (2014). 7 surprising facts about the Victoria’s Secret business. [online] Fortune.com. Available at: http://fortune.com/2014/12/02/7-surprising-facts-about-the-victorias-secret-business/ [Accessed 1 May 2017].

Image: Shape Magazine. (n.d.). victoria’s secret. [online] Available at: http://www.shape.com/topics/victorias-secret [Accessed 1 May 2017].

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