set for life final update for presentation

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TEAM: SET FOR LIFE-5

NAMES:

1. FAITHFUL ABEL2. HEATHER MASON3. ROKAS KASEVICIUS

BURBERRY COMPANY

Tuesday 11 April 2023STRATEGIC MANAGEMENT - M3N209277

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Burberry Overview

Founded by Thomas Burberry in 1856 with the aim of producing innovative functional outwear.

Invented water resistant material - gabardineAn Iconic British global luxury brandBy end of June 2012, globally had 196 retail stores, 207

concession, 48 outlets and 58 franchiseAverage turnover of past 5 years of £1,367,060,000Sells apparel, non-apparel and luxury products

Burberry (2012a)

STRATEGIC MANAGEMENT - M3N209277

Tuesday 11 April 2023

3Burberry Core Values

“The Company believes that to be a great brand, it must also be a great company”

ProtectExploreInspire

Burberry (2012b)



Burberry Foundation

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Strategic objectives

Burberry’s five main strategic objectives:

Leverage the franchiseIntensify non-apparelAccelerate retail-led growthInvest in under-penetrated marketsPursue operational excellence

Burberry (2012a)



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CSR Approach

Burberry focuses on 5 aspects of Corporate Responsibility

People Ethical Trading Community Sustainability Governance

Burberry (2012b)Burberry (2012c)Ethical Trade Initiative (2012)Financial Times (2007)The Guardian (2012)

“Helping young people realise their dreams through the power of their creativity”



http://www.ethicaltrade.org/

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2011 2010 2009 2008 2007

% Change in Sales

23.71 17.30 6.53 20.71 17.06

% Change in Pre-tax Profit

23.77 78.13 931.06 -91.97 25.21

Profit margin 19.71 19.70 12.97 -1.34 19.66

RoCe 36.10 35.62 26.03 -2.78 37.85

Current 1.72 1.63 1.53 1.36 1.35

Gearing 40.94 39.92 43.06 52.72 43.11

Burberry Finance



Burberry (2012d)

Campbell et. Al. (2011a) Fame (2012)

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Burberry Finance

Burberry Five-year Summary



2007 2008 2009 2010 2011

-600.00%

-400.00%

-200.00%

0.00%

200.00%

400.00%

600.00%

800.00%

1000.00%

1200.00%

Change in Pre Tax Profit of Burberry and Gucci

BurberryGucci

Year

Perc

en

tag

e

http://about.hm.com/gb/investorrelations/fiveyearsummary__fiveyearsummary.nhtml

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PESTEL Analysis

Political/Legal

Tax

EconomicGlobal

economic downturn/ Recession

SocialPeople

Community

TechnologyE-commerceNetworking

Environmental

Environmental Protection Law

Burberry, (2009) Campbell et. Al. (2011b)

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Porter’s 5 Forces Analysis



Competitive rivalry

Threat of new

entrants

Buyer Power

Threat of substitute

Supplier Power

Campbell et. Al. (2011c)

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Five Force Analysis-Burberry



Threat of new entrants (LOW). Well established brand name

. High capital of investment

. Expensive to enter

. International trades

Buyer Power (LOW-MEDIUM). Most of wealth customers are

insensitive to price. High rivalry

Supplier Power (LOW). Able to change supplier

. Uses variety of suppliers

. Owns some suppliers

Threat of substitution(LOW-MEDIUM). Establish/known globally

. Unique brand

Competitive rivalry(HIGH)

The sector is intense and highly competitive

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Competitive Strategy (Porters Generic Strategy)

Awarded two Royal warrants Won many awards for its design, such as 2010

British Fashion Award Use celebrities endorsement Leaders in CSR approach

Mindtools (2012)STRATEGIC MANAGEMENT - M3N209277


Burberry follows Differentiation Focus

Strategy

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Strategic Direction of Development (The Ansoff Matrix)



Market Penetration

•Digital advertisement •Fashion show promotions•Enhance design innovation•Communications functions

Product Development

•Partnerships with designers

•New collections every season•Expands product portfolio

Market Development

•Market leader in digital innovation and e-commerce

•Global Company, new stores around the world, both franchise and licensing

Diversification

•Uses digital and social media to promote the brand

•Search for opportunities to enter new markets.

Carlwestonmarketing (2012)

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Methods of Development

Internal Development /Organic

External

•Use in-house expertise and skills to advertise its business

•Utilise the existing skills for innovation

•Use of variety means of networking such as website, Facebook and twitter to get to know their customers

•Increase retail shops

•The brand operates in the global luxury goods market - Europe, America and Asia Pacific

•Franchise with variety regions across the world (emerging Markets) China, India, Russia, Eastern Europe and the Middle East

•Signed a joint venture agreement with its Japanese licensing partner to develop the distribution company’s international non- apparel products in Japan



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SPACE Analysis

Tuesday 11 April 2023STRATEGY MANAGEMENT - M3N209277

Industry Attractiveness

Competitive

advantage

Financial Strength

Environmental Stability

6

6

-6

-6

1-1-1 1

Competitive

Defensive

Conservative Aggressive

Campbell et. Al. (2011d)

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References

Burberry (20o9), “Full Annual Review” online at http://annualreview2009-10.burberry.com/pdf/full_annual_review_2009_10.pdf [Accessed 7 November 2012]

Burberry (2012a), “Full Annual Report” online at http://www.burberryplc.com/documents/fullannualreport/burberryar2012.pdf [Accessed 8 October 2012]

Burberry (2012b), “Corporate Responsibility – Great Brand Great Company” online at http://www.burberryplc.com/corporate_responsibility/great_brand_great_company [Accessed 15 October 2012]

Burberry (2012c), “Store - Foundation” online at http://uk.burberry.com/store/foundation/the-foundation/ [Accessed 15 October 2012]

Burberry (2012d), “Full Annual Report” online at http://www.burberryplc.com/documents/fullannualreport/burberryar2012.pdf [Accessed 8 October 2012]

Burberry (2012e), “Fashion Review” online at http://www.fashionreview.co.uk/burberry-fashion/ [Accessed 5 November 2012]

Campbell, D., Edgar, D., Stonehouse, G. (2011), “Business Strategy: An Introduction”, 3rd edition, England, Palgrave.

Carl Weston Marketing (2012) online at http://carlwestonmarketing.files.wordpress.com/2012/05/the_ansoff_matrix.jpg [Accessed 16 November 2012]

Ethical Trading Initiative (2012) online at http://www.ethicaltrade.org/about-eti/our-members [Accessed 1 November 2012]

Fame (2012) online at http://fame.bvdinfo.com/version2012104/Report.serv?_CID=47&context=2O1M83139O6RU3L [Accessed 8 October 2012]

Financial Times (2007) online at http://www.ft.com/cms/s/0/6105ae9e-c92d-11db-9f7b-000b5df10621.html#axzz28d9RU1Tn [Accessed 3 October 2012]

Financial Times (2009) online at http://www.ft.com/cms/s/0/107c276a-e75c-11dd-aef2-0000779fd2ac.html#axzz29Yhrxc5Y [Accessed 3 October 2012]

Mind Tools (2012), “Porter's Generic Strategies - Choosing Your Route to Competitive Advantage” online athttp://www.mindtools.com/pages/article/newSTR_82.htm [Accessed 5 November 2012]

The Guardian (2012) online at http://www.guardian.co.uk/business/2012/sep/18/burberry-handbag-chinese-factory-ethics [Accessed 3 October 2012]



http://annualreview2009-10.burberry.com/pdf/full_annual_review_2009_10.pdf

http://annualreview2009-10.burberry.com/pdf/full_annual_review_2009_10.pdf

http://www.burberryplc.com/documents/fullannualreport/burberryar2012.pdf

http://www.burberryplc.com/corporate_responsibility/great_brand_great_company

http://uk.burberry.com/store/foundation/the-foundation/

http://www.burberryplc.com/documents/fullannualreport/burberryar2012.pdf

http://www.fashionreview.co.uk/burberry-fashion/

http://carlwestonmarketing.files.wordpress.com/2012/05/the_ansoff_matrix.jpg

http://www.ethicaltrade.org/about-eti/our-members

http://fame.bvdinfo.com/version2012104/Report.serv?_CID=47&context=2O1M83139O6RU3L

http://www.ft.com/cms/s/0/6105ae9e-c92d-11db-9f7b-000b5df10621.html

http://www.ft.com/cms/s/0/107c276a-e75c-11dd-aef2-0000779fd2ac.html

http://www.mindtools.com/pages/article/newSTR_82.htm

http://www.guardian.co.uk/business/2012/sep/18/burberry-handbag-chinese-factory-ethics

set for life final update for presentation

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