Critique Of The Limited Inc. Critique of The Limited INC. Overall, we think that our classmates, Melissa and Jay, did a good job in their paper. Here are just few comments and suggestion that we think our classmates have missed. History: The management of the Limited relies heavily on the shoulders of CEO Leslie Wexner.
The analyst has criticized him that he is frequently creating new businesses that evidently fails. The underperforming stores are as follow: *sum* 1995 Limited Inc. own 84% of Intimate Brands, Inc. o Closure of 79 underperforming stores *sum* 1996 Closure of 135 underperforming stores. *sum* 1998 Abercrombie & Fitch became independent.
Limited Inc. on longer have ownership *sum* 1999 Limited Inc. became independent through a tax-free spin-off. He has not been successful in being a good day-to-day manager. As recent as the mid-1990s he had 24 associates reporting directly to himself.
His employees should not rely upon him and instead they should be able to make decisions by themselves without consulting with Mr. Wexner. This direct communication between Mr. Wexner and his employees probably hindered the business. Not empowering his employees to make decision-making can be detrimental to the company business because his employees suggestions may have had significant contribution to the company and its ability to remain open. They need to implement a strategy where the employees are allowed to make suggestions and comments.
Mission Statement Their mission statement is weak. It has been criticized to be a sexiest advertisement. Limited focused heavily in promoting women in their advertising. Limited needs to revise this mission statement so that the consumer will realize that Limited also caters for men. External Analysis Limited has encountered a few lawsuits. On September 14,1999, two complaints were filed against the company and its subsidiary, Lane Bryant.
The complaint was related to labor practices allegedly employed on the island of Saipan. It was dismissed because the Department of Labor has commended their high labor standards; the DOL has placed the Limited Co. on the trendsetters list, which insures that their goods were not made in sweatshop conditions. DOL supported Limited Co. with this lawsuit because Limited Co.
has a reputation to conduct business according to ethical standards. The employees of Limited Co. take pride in complying with their high policy related to labor standards. Limited Co. is known for its problem solving abilities; the company takes precautions when faced with any lawsuit.
They meticulously research the lawsuit and make immediate changes to eliminate future lawsuits. Limited Co. is fast to respond to any accusation they encounter. Limited Co. has a very strong connection with DOL and DOL will continue to support their corporate image.
Limited Co.s employees are encouraged to comply with policies that maintain the integrity and honesty of the company. Limited Co.s website encourages visitors to send in comments and complaints, so that they can correct unknown problems immediately Social Factors Their second strength is that Limited Co. is a highly active member of the community. They participate in hundreds of charity functions, such as the Columbia reads program. This program in conjunction with the government has sponsored 400 employees that visit kindergarten classes in the Ohio area for one-on-one tutoring on company pay. The 400 employees voluntarily participated in this program because they are committed and they take pleasure in helping improve the community. Industrial Analysis-Porters Five Forces Model 1. Potential Entry of New Competitor (Medium) The barrier to enter the market is minimal and free to entry. This makes the potential of new entrants high.
However, it is difficult to compete with Limited because it involves many factors, such as capital, patent, economies of scale, and market leader position, therefore, the potential to entry for new competitors is medium. 2. Bargain Power of Customers (Medium) There are many alternatives in the market; therefore the buyers switching cost is low. Consumers do not have the power to bargain because Limited does not sell their merchandise at wholesale or at a discount. Limited provides qualitative features such as, better quality and they enhance their brand image.
3. Bargaining Power of Suppliers (Low) Limited offer fair compensation and benefits, consequently this will motivate their suppliers to comply with their laws and regulation. 4. Potential Development of Substitute Products (High) Ideally, Limited product can be easily substituted. There are many substitute products.
Many consumers are price conscious which induces them to shop at discount outlets. There are several stores that sell similar product as Limited at a cheaper price. The only difference is that Limited merchandise has better quality and the brand name. 5. Rivalry Among Competing Firms (High) Limited is a mature company and has established itself in the market successfully.
In order to compete with Limited competitors need to differentiate their product, provide additional feature that Limited does not provide, lower their pricing strategy, and have a substantial amount of capital for advertising. Internal Analysis -Value Chain Primarily Activities Inbound/Outbound: Most of the merchandise and related materials for the Company’s stores is shipped to the Company’s distribution centers in the Columbus, Ohio area. In addition to Mast and Gryphon, the Company uses common and contract carriers to distribute merchandise and related materials to its stores. The Company’s businesses generally have independent distribution capabilities and no business receives priority over any other business. The Company’s policy is to maintain sufficient quantities of inventory on hand in its retail stores and distribution centers so that it can offer customers an appropriate selection of current merchandise. The Company emphasizes rapid turnover and takes markdowns as required to keep merchandise fresh and current with fashion trends. Operations To ensure the consistent quality, The Company has established a separate division named Independent Production Services (IPS) to assist the company to control and monitor its vendors through programs, such as Vendor Qualification and Compliance and Vendor Monitoring. The IPS establishes and maintains in reliance on specific qualification standards and protocols developed from time to time on behalf of the Company. All vendor, subcontractor and supplier factories will be inspected periodically over time to Limited’s qualification criteria and procedure standards. Services The Company offers its customers a return policy stated as No Sale is Ever Final.
As the Company continues to develop strategic relationships with vendors, it will continue to intensify its commitment to vendor education. Support Activities Firm Infrastructure The Limited, Inc. is supported by a number of strategic functions, or centers of fu …