Company Overview
L Brands, Inc. (LB) is an international company operating a specialty retail business. It was incorporated in 1963 is headquartered in Columbus, Ohio. The primary focus of the company is in women’s apparel, beauty categories, and personal care like antibacterial soaps, lotions, shower gels, and aromatherapy. As such, its strategic intent gives focus to the expansion of its product portfolio. It is through company-owned specialty retail stores in the United Kingdom, Canada, and the United States that the company sells its merchandise. The company’s operations to total to 3,007 and the brands are sold in more than 700 additional noncompany-owned locations around the world. All the activities are primarily mall-based; through the international franchise, wholesale partners, through Websites, and license. The mission of the company is in making their customers feel sophisticated, sexy, and forever young. Moreover, the company is committed to delivering their promise to its clients through providing them with safe, high quality, and effective products ( L brands – Heritage (n.d.) .
The NAISC code of L Brands is 448120 and has over twenty-thousand employees. On the quality of its products, L Brands, Inc. applies a disciplined approach. As a retailer, they contract manufacturers worldwide to make their merchandise. It is only in the United States, Sri Lanka, China, and India that L Brands sources five percent of their global order volume. The vendors are selected based on their ability and commitment in meeting the safety and quality standards of the company. Moreover, they also look at strict ethical labor and standards of the environment.
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PEST Analysis
Political/Legal Environment
Failure to comply with the numerous regulatory requirements like the New York Stock Exchange (the “NYSE”) may lead to the hindering of business operations as it affects the reputation of the company. Moreover, the market price of common stock is also affected, which ultimately affects the cash flows and financial condition of the firm (Perreault, Cannon & McCarthy, 2015). In international, national and local jurisdictions, the company is subject to income tax and this will mean that it will affect the import and excise duties on products and or their sales or value-added taxes. Besides, the Internal Revenue Service is liable to examine the company’s tax returns and other matters about tax and thus, the company should review and determine their adequacy regarding providing the government tax. Failure to comply or even tax rates fluctuations will mean that the firm’s operations will be affected severely.
Economic environment
The company will be affected by the strength of its global, national and regional economy in terms of providing opportunities to the members of the community where it conducts its operations (Waters & Waters, 2006). The disposable income of buyers affects the operations of the company because products are not moving fast and this means that they will have to trim the numbers of their employees. Therefore, high unemployment rates will be experienced in the company ad this will mean that they will need to look at increasing their interest rates to cater for the needs of the business.
Socio-cultural environment
Under this, Victoria’s Secrets (under L Brands, Inc) had a racist problem and lagged behind regarding applying diverse consultancy or the focus on customer groups and racial stereotyping. It also has a gender problem where many a time’s people will give attention to the physical homogeneity of the models. This will affect the company’s performance negatively because perception influences what clients buy.
Technology (Advancements) Environment
Customers, suppliers, associates security and other company information are the top most priority of the company, and their failure to maintain the security will have an adverse impact on their reputation. Advancement in technology means that the information system of any given company becomes susceptible to the increasing external threat attributed to factors such as the evolving cyber security risks (Perreault, Cannon & McCarthy, 2015). As such, the disclosure of customer, supplier, associate or any company information confidential due to a breach of data security will harm the company regarding their damaged reputation. This will mean that customers will no longer trust the company and thus, will not transact any business with them and this may result in significant regulatory, legal, and financial liabilities for the company plus lost revenues.
References:
L brands – Heritage (n.d.). https://www.lb.com/our-company/heritage
Perreault, W., Cannon, J., & McCarthy, J. (2015). Essentials of Marketing: A Marketing Strategy Planning Approach (14th Ed.). New York, NY: McGraw-Hill.
Waters, D. J. & Waters, D. (2006). Operations Strategy . Bedford Row, London: Thomson Learning.
