Growth Opportunities, Ansoff Matrix, Funding Sources, Exit and Succession Options, Business Plan of Burberry Clothing Store

This article discusses the growth opportunities for Burberry, including new locations, expanding through new channels, and collaboration with other businesses. It also explains the Ansoff Matrix and its four strategies. The article further explores the sources of funding, such as bank loans, debentures, and angel investors. It also discusses the exit and succession options available to Burberry, including liquidation, acquisition, and merger. Lastly, the article presents the business plan of Burberry Clothing Store, including its products, market analysis, and strategies.

UNIT 42 ASSESSMENT

Table of Contents
MAIN BODY...................................................................................................................................3
1. Growth opportunities...............................................................................................................3
2. Anshoff Matrix.........................................................................................................................4
3. Sources of Funding .................................................................................................................5
4. Ways and meaning of the Exit and Succession Options along with their Pros and Cons used
by the Burberry :..........................................................................................................................6
5. Business Plan ..........................................................................................................................8
Business Plan of the Burberry Clothing Store ............................................................................8
REFERENCES................................................................................................................................1

MAIN BODY
1. Growth opportunities.
Growth opportunities are the strategies that an entrepreneur considers for the expansion
of its industry. There are various areas which should be focused to ensure growth of the
business. Burberry is the popular and vast industry as it provides the customers with all the
necessary needs. For the growth and expansion of the retail industry, the following factors should
be considered :
 New Locations : Addition of new locations and new stores help the retail business in
expanding its services and products across all the areas of the world. The adding of new
stores and locations increase the operations and logistics of the store and require regular
maintenance (Sunday, and Godspower, 2022). The procedures and policies should be
streamlined at all the locations.
The addition of new location will help the organisation in understanding the need and
requirements of that society which will add a competitive advantage to the business. These
factors have also a negative impact that the business have to update its technology and logistics
to manage similarity of the operations at all the stores.
 Expanding through New Channels : with the evolving world, the organisation should
also enhance their distribution channels and this will help the company to make a better
reach to all the customers in the market. This is a safer , better and less costly opportunity
to grow and expand the business.
 Introduction of e-commerce platforms or using social media platform will help the
business in expanding and increasing the sales of the business. To manage the customer
data and information electronically, the organization have to adopt new technologies
which will be expensive and incur huge expenses for the organisation.
 Collaboration with other Business : Partnerships and collaborations with the existing
and companies with huge capital and brand image help the companies to expand their
businesses. To expand the business or introduce any new product or services, the
Burberry can team up with the businesses having sufficient assets and resources in the
market to build a reputation for the new product.
It is not necessary that every business can collaborate with the other companies because of the
high royalty and expenditure cost. Partnership sometimes accompanied by the overruling effect

of the decisions because of the higher stake and assets in the business and thus this leads to the
acquisition of the company.
2. Anshoff Matrix
The matrix is used by the organisations in identifying the opportunities of the growth in
the market and the ways to increase the revenue by developing and expanding its products and
services in h existing and new market. The Burberry can use this model to evaluate what are the
opportunities the company has to increase the sales by using the different alternatives with the
varied combinations including the locations and the customer segments (Khajezadeh and et.al.,
2019.).
There are four strategies of the Anshoff Matrix –
Market Penetration
This strategy is the less risky strategy in the
growth opportunity. The strategy is used when
an organisation want to grow in the existing
market with the existing product and services.
Market Development
This strategy focuses on the development of
existing product and services in the new
market. This enables the business to expand
through retail stores,geographical locations,
regions. It is risky as compared to the market
penetration strategy.
Product development
The third strategy which emphasizes on
creating new products and services for the
existing market. Product development strategy
is riskier as compared to the market
development because the organisation will
provide the customers with varied product line
and out of which the customers choose
(Prasetyo, and Rahman,2018.).
Diversification
The last strategy is more risky to the
businesses. This growth strategy emphasizes
the organisation to approach new market with
the new products and services. This is riskier
because the market in which the business will
operate and the product both are untested and
new.
Market Penetration : This strategy will the help the Burberry by improvising the quality of
product and selling them in the existing market.
 Pros : It will have an advantage of having strong customer base in revenue generation.

 Cons : The existing products in the existing market may create issues such as outdated
designs.
Market Development : Burberry can use this strategy to expand its product range in new
market.
 Pros : This strategy will help the business in understanding the cultural norms and needs
of the people of different regions and sections.
 Cons : Shifting to new market may result in losses at the initial stage for the Burberry.
Product Development : The Burberry will have an opportunity to introduce new products in
exiting market.
 Pros : This will increase the revenue and sales if it provides the best quality products.
 Cons : This might lead to losing the customers because of the effect of new and untested
products at the market.
Diversification : In this the Burberry will enter into the New market with the new products such
as cosmetics and accessories.
 Pros : The business will get an idea about the new market trends and the customer
choices.
 Cons : It is not necessary that in the new market the products had the same quality which
might affect the brand image.
3. Sources of Funding
Funding means investment of money into the businesses, ventures or start-ups to help
them to start and run their business.
The Burberry can choose from the various sources of funding to raise the funds for the
operational activities of the business. The sources of funds are :
 Bank Loans : Bank loans are the best option for funding from where the small and
medium enterprises can raise the funds. On raising funds from the banks, the enterprises
have to pay interest on a fixed rate on the principal loan amount (Wang, Lin, and Luo,
2019.). The banks may provide short term and long term depending on the performance
and financial position of the business.
 Pros : The interest paid on the bank loans is deductible from the tax calculation as
expense thus it will help the Burberry in tax planning.

 Cons : To avail the facility of loan, businesses should maintain the financial position and
sustainability in the organisation to receive the demanded amount of loan.
 Debentures : It is an instrument that the company's issues to the individuals, lenders and
investors to borrow funds. The debentures provide the lender with the security of loan
repayments through the assets of the SMEs in vase of default in repayment (Sen, and
Mehta, 2018). In case of debentures, the payment of interest is compulsory by the SMEs
even in case of loss.
 Pros : Debenture provides an opportunity to the companies that they can borrow as much
they want , in case of bank loans it depend on the financial stability of the business.
 Cons : The regular interest payments of the debentures affect the financial flexibility of
the SMEs as in case of non repayment of loans, the SMEs have to suffer the loss of
assets.
 Angel Investors : These investors are also termed as private or seed investors, as they are
the investors with high net worth, and they provide the funds to the SMEs, Start-ups or
business lacking the finances in exchange for ownership in the company in form of equity
(Herck Giaquinto, and Bortoluzzo, 2020).
 Pros : The funding by the angel investors is not based on the credit scores and the
financial statements of the SMEs.
 Cons : Angel investors may take over the control of the business by funding higher
amount and holding more than 50 percent of the stake of the SMEs.
4. Ways and meaning of the Exit and Succession Options along with their Pros and Cons used by
the Burberry :
The Burberry may adapt the various options available for the exit and succession of the
business. The exit options enables the business in winding up and permanently shut down of the
business while the succession option provides an opportunity to the business to succeed and
remain in the market either by way of acquisition or merger of the business with other business.
The exit and succession options available to the Burberry are :
 Liquidation : It is a process when an entity comes to an end after selling off its assets
and paying off all the liabilities. It distributes the funds if any left after the settlement of
liabilities and payments, the amount is distributed to shareholders (Nagy, and Ghica,
2020). This option is exercised when the company faces the situation of bankruptcy.

Benefits :
 The hire-purchase agreements and lease terms remain cancelled after the companies goes
into the liquidation process that is no payments shall be made further.
Limitations :
 Liquidation process will result in selling of all the assets of the company to provide the
payments to its creditors and the fees of the insolvency professionals .
 Acquisition : In this option, a company purchases the equity shares of the other company
to exercise control on the decisions of the company. This can be exercised by acquiring
more than 50% of he share of the target firm, in acquisition, both the companies operate
differently and the target company is controlled by the parent company (Dewi, and
Mustanda, 2021.).
Benefits :
 It expands the market share of the SMEs as acquisition helps in gaining competitive
advantage in the market.
Limitations :
 Acquisition may cause conflicts between the objectives of the business resulting in
resistance regarding the acquisition of the companies.
 Merger : A corporate strategy which unites two companies existing in the market into a
new company. The companies merging have the same scale of operations and same size
(Tarigan, Claresta,and Hatane, 2018). The objective behind the merger of company is to
increase the market share and expand the reach of companies.
Benefits :
 Merger helps in reducing the operation cost of the companies and achievement of
economies of scale due to bulk purchasing of raw materials and so on.
Limitations:
 Merger may cause the creation of monopoly in the market due to reduced competition
and good share in the market which leads to increase of prices of the products and
services.

5. Business Plan
Business plan is the document that is used by the companies to build up a plan which
define the objectives and the ways that can be adapted to achieve the objectives. It is a roadmap
for the business to ascertain the standpoints (McKenzie, and Sansone, 2019).
SMART analysis
SMART analysis helps in setting the effective goals for the business. SMART , it is an
acronym which stands for S as Specific which emphasizes on setting clear and defined goals, M
as Measurable which means that the progress of the firm should be measurable, A as Achievable
that is the goals of the firm should be attainable , R as realistic means the goals should be
realistic and reachable and T as Timely means there should be a timeline defined for the goals'
attainment.
Business Plan of the Burberry Clothing Store
Executive Summary
The business plan of the Burberry Clothing company will determine the products and
services offered by it. The plan will provide the market analysis of the company in a summarized
way. It will discuss the strategies that the company should adapt to grow and expand it business
with the new products. Lastly, it will present the financial plan which will provide the company
an idea about the expenditure and the requirement of the funds.
Company Summary
Burberry Clothing Company is the store that distributes ready-made clothes including
men , women and kids wear. The stores of the Burberry are spread across 60 countries.
Currently, the Burberry is focusing on the development of the fashion industry and along with it,
the company want to introduce cosmetics and fashion accessories with the clothing business.
Products
The Burberry focuses on the fashion house and designs the variety of wears such as gym
wears, swimwear , trench coats , jackets ,casual wears and so on for men, women and children.
The company has its focus on expansion of its business with the evolvement of Fashion
accessories , cosmetics along with the clothing business.
Market Analysis Summary
To conduct the market analysis of the Burberry, the STP model and marketing mix can
be used.

STP Model
Segmentation : On the basis of reports, it is identified that the sales of the women
segment has shown a growth of 3.7% whereas men's segment represented the sales of 4.1%.
this showed that the men clothing business is growing whereas the women sales was increasing
at but at a lower rate. Girls and boys clothing rose by .5% and 4%.
Targeting : The Burberry 's business targeted on the segments such as sports and gym
wear because of the increased interest of people in the health and fitness areas. It also targeted
the junior clothing segment because of new and variety of designs (Bigo, Raj,and Situmeang,
2021.).
Positioning : For the better positioning of the products in the market, the company
adopted the low cost strategy and a good advertising strategy. This helped in providing the
customers with products at affordable cost and of the best quality.
Marketing Mix
Product : The products provided were of the best quality and covers all the variety of
clothes from the everyday basics to the party wears.
Price : Burberry adapted the low cost strategy to manage its cost of production and
operations and provide the customers the products at a competitive and low price.
Place : To sell its products, it set up exclusive stores and in many countries it started
franchisees to offer its products and services.
Promotion : For promoting its products it used TV advertisements, you tube, digital
marketing and sponsorship programmes.
Strategies and Implementation
To grow the business, there are various ways to be adopted by the Burberry :
Adapt the E-commerce Technology : Providing the customers with the updated
technology options such as online shopping through websites or apps will help the business grow
and increase its sales and revenue.
Innovation : As the Burberry decided to expand the product line with the fashion
accessories and cosmetics, this will help in growth of the business by adopting new strategies
and directions to promote the new product chain.

Customer Focus : Being the fashion industry,the Burberry should focus on the changing
needs and preferences of the customers and developing the products as per their tastes this will
ensure growth in creating a strong customer base.
Management Summary
The Burberry management has key-man includes President, CEO, CFO and managing
director for taking the important management decisions.
Additional positions includes CIO,VP IT, for functional and operational level decisions.
Overall in the company , there are 5000 employees including the employees at the
franchisee stores.
Financial Plan
Cash Budget for the Financial Year 2022 :
Particulars
2020
($000)
2021
($000)
2022
($000)
CASH INFLOWS
Sales 30 202 374
CASH OUTFLOWS
Labour 45 75 108
Materials 88 119 69
Overheads 35 50 73
NET CASHFLOW -138 -42 124
OPENING CASH
BALANCE 150 12 -30
CLOSING CASH
BALANCE 12 -30 94

Appendices
Market Analysis of Burberry Company

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