Burberry PLC: A Renowned British Luxury Fashion Company

Explore the history, organizational structure, corporate governance, and pestle analysis of Burberry PLC, a renowned British luxury fashion company headquartered in London.

Running Head: BURBERRY PLC 1
BURBERRY PLC

BURBERRY PLC 2
Burberry PLC
Burberry PLC is one of the most renowned companies in the sector of the British Luxury
Fashion presently headquartered in London, England. It is one of the most powerful brands
established in the year 1856, around 163 years ago in Basingstoke England, part of United
Kingdom throughout the world that is involved in the business of selling the luxury goods which
include the wide range of the products. The products include the products of the women, children
and the men apparel along with the cosmetic products and non-apparel range also. The
company’s main fashion house is engaged in focusing on distribution of the trench coats, nearly
ready to wear outfits, accessories, sunglasses and the cosmetics. At present the brand is serving
in more than 532 locations and serving almost worldwide. Currently the revenue of the company
is 2732.8 million pounds for the financial year 2018 while generating the net income of 293.6
million for the year 2018 (Burberry, 2018).
Earlier the major focus was on the development of the outwear attire and thereafter the company
has moved to the high fashion market where the first fabric namely Gabardine has been
developed exclusively to be completely able to breathe within. Until 1955 Burberry was an
independent family controlled company, thereafter the company went for the reincorporation.
The company is also listed on the London Stock Exchange and ranked 73 in the Interbrand’s
Best Global Brands report along with the major competitors namely Louis Vuitton and Prada
(Burberry, 2019).
History represents that earlier the name of the Burberry was Burberry due to the pronunciation of
the Burberrys of London and the logo of the company was developed in the year 1901. The
design was made in such a manner that it contains a Latin word Prorsum which means moving
forward and with the essence of this word the company has reached to the apex of this fashion
sector (Burberry, 2019).

BURBERRY PLC 3
Organizational Structure
(Source: Burberry, 2018)
The organizational structure of the Burberry can be observed from the image above. There is a
central Board which is further divided into the four categories namely the nomination committee,
remuneration committee, audit committee and lastly the chief executive officer, president and
chief creative officer. The audit committee is further bifurcated into the risk committee which
again is substituted into the Global Health and Safety Committee and Global Ethics Committee.
Directors
When the annual reports of the Burberry PLC are scrutinized it was found that the key people
that are associated with the company are Sir John Peace who is the chairman of the company,
Marco Gobbetti the chief executive officer of the company and Julie Brown the chief operating
financial officer of the Burberry Plc. The non-executive officers on the other hand are Fabiola
Arrendondo, Ian Carter and Jermy Darroch, Ron Frash, Stephanie George.at present there are 11
members in the Board and of which included two major executive directors and the nine non-

BURBERRY PLC 4
executive directors. Hence the management structure of the company is bifurcated into the
following manner.
Governance of the chosen company
The corporate governance of the Burberry determines that the Board is responsible for promoting
the long term growth of the company. The corporate governance of the company is also used to
perform sustainably and efficiently for the shareholders as well as the stakeholders. The duty of
the board of Burberry is not just to seek the strategy by analyzing the factors prevailing in the
environment but the major role is its implementation and the monitoring of those strategies
(BORSBOOM, CASE and LAWSON, 2018). The Committees can connect outsider experts and
autonomous expert consultants and can call upon different assets of the Group to help them in
releasing their separate duties. Notwithstanding the council individuals and the Company
Secretary, outer counsels and, now and again, different chiefs and individuals from our senior
supervisory crew go to board of trustees gatherings yet just at the welcome of the Chair of the
pertinent Committee. There are several decisions which are only taken under the presence of the
Board of the company for example, preparation of the budget, analyzing the operational plans
and managing and controlling the risk of all the types (Parkinson, 2018).
Pestle Analysis
Pestle Analyis is the tool which is used to scrutinize the position of the company with respect to
the external environment and its implications relatively. The pestle analysis is conducted is used
to build the marketing relationships that a company is hard to develop (Charan, 2017). Pestle
analysis is also helpful making the strategic decision making and therefore this tool is equally
effective for the industry it belongs to. The major reason for the Burberry Plc. to opt for the
pestle analysis as a tool to find out what are the factors that are affecting the performance of the
company and how after getting the knowledge the company implements the ideas to overcome
such factors if any. It only suggests the confidence among the company but it also helps in
expanding the business. This tool is one such tool which showcases the company just like a
mirror and gives the opportunity to settle back and protect itself without comprising on losing of
the customer base. Hence this tool is one of the most useful tool to decide whether the business

BURBERRY PLC 5
shall be expanded, product shall be differentiated or any other initiative is required from the side
of the Burberry (Dimitrakopoulou, 2015).
The pestle analysis is further bifurcated into different elements such as political, social,
economic, legal, technological and environmental to get an insight of each element individually.
Economically, the notional luxury itself has been lost into the knock off mediocrity and
aspirational commoditization. Burberry among the top other brands are required to have a health
competition and that to in an aggressive manner to have high end customers in a kaleidoscope of
luxury. Also when there was an economic downturn in the year 2008 the first preference of the
customers were to buy the products at the affordable prices. The United Kingdom’s economy
faced a major breakdown in the year 2008 and further the slow down at 4.9% ensued in the year
2009, the crisis turned out to be worst (Perry, Fernie and Woods, 2018). This slow economic
negatively affected the job creation in the UK in the subsequent years. Since the economy tends
to be weak the buyers shifted their focus more towards the non-luxury products due to the
constant poor economic results. Also the purchasing power of the customers is weak; hence the
company must focus on producing the non-luxury goods to create more opportunities for
themselves and to attract the customer base again (Donzé, 2018).
In terms of the political aspects the Burberry PLC operates in the international markets and
therefore the rules and the policies of the different countries is of the major concern from the
point of view of Burberry. Also the company outsources the raw materials from the suppliers of
different parts of the world subjected to variety of regulations and policies. It can be observed
that the 60% of the raw materials are outsourced from Europe. Furthermore from the point of
view of the international expansion and diversification the Burberry knocked down the dangers
with these benefits yet on the other hand the globalization exposes the corporate vulnerability in
terms of public debt, tax revenue and the low government (Milman, 2018). In this scenario
Burberry also faces the steep competition due to the same design and the copies that available at
the cheaper rates. The foreign tax rates are imposed to promote the domestic production and
therefore this comes at the cost of the political instability. Also the main regions are Europe,
middle East, India and Africa and not to forget the Americans (Doyle and Moore, 2018). Due to
the terrorist attacks in Europe leads to the drop in sales. The purchasing power also increased due

BURBERRY PLC 6
to the fight against the Chinese Market. The only benefit that was available for the Burberry was
the introduction of the Brexit (Loonam, Eaves, Kumar and Parry, 2018).
Under the socio economic factors it can be observed that the customers of the Burberry belong
to different cultures and follow different lifestyles. This comes as a huge challenge on a part of
the Burberry to satisfy the needs of all the customers belonging to the different communities and
the cultural and hence different variety of products are introduced by the Burberry. Some people
prefer the skimpy dressing while the other people prefer the light and the reserved dressing and
according to those ideas the Burberry has created different types of the clothes to cater the
preferences of all the customers and hence in this way the Burberry enhances its position in
terms of the customer base keeping in mind the social factors and moreover the company also
makes use of the social media to attract the number of customers and engage them in the CSR
activities (Sah and Dadwal, 2018). This builds the trust and the loyalty of the customers for the
product as well as the company. To maintain the social activities and the social relationships with
the customers it is necessary for the company to provide the huge return of the resources so used
in the form of the classy and the quality products (Javeed and Mukhopadhyay, 2017).
Unquestionably the online shopping is the bliss and this concept is revolving rapidly across the
world. This online shopping is helpful because of the technological enhancement that is creating
a direct impact upon the marketing strategies everywhere. One such example of this concept is
the website of the Art of the Trench website which is highlighting the youthful snaps of its star
trench coat in the assorted color’s and the design. Apart from this the Burberry’s live streaming
design council which allows the customers to see the latest collections as long as they are
allowed to hit the runaway (Yu, Cao and Tan, 2018). In terms of the technology there is one
more attractive feature that is used by the customers to unlock the product information from their
phones and this was due to the year 2016 wherein the Burberry became the first luxury brand to
avail the benefits of the Snapcode to enhance the shopping experience (Hill, Korczak and
Korczak, 2019). The importance of the internet is increasing day by day and important to luxury
sales also. Technology improvement have allowed the organization to operate more efficiently
typically states that Burberry world visualizes on the different electronic gadgets in terms of the
image, cultural and heritage across so even if the clients and the customers are not willing to
come to store and can shop online in the most easiest manner they could. After the introduction

BURBERRY PLC 7
of the Big Data in the UK, the company was able to track down the behavior and the preferences
of the consumers. This not only strengths the relationship between the company and the
customer and one such medium was the marketing of the brand through the use of the social
media (Henderson, 2018).
(Source: Art of the Trench, Source: Google Inc. ©)
Most of the companies are majorly focused on the first four areas whereas only some
companies are focused on environmental factors and takes the initiatives towards maintaining the
ethical practices and keeping the most of the contributions towards direct grasping of the
customers and the other investors and the shareholders to invest in the business. Additionally the
products are made up of the cotton wool which is a positive initiative towards the environment as
it will not create any harmful situations (Esser, Macneil and Chalaczkiewicz-Ladna, 2018). Also
there are many areas these days that are prone to attack due to the political imbalance and the
increasing attacks; hence the Burberry keeps itself away from these types of the locations for the
future investments. The policies of the Burberry are of global nature that are comprehensively
detailed and associated with the promotional advertising. There is a certain kind of respect for
the environment in enormous activities. The excellence and the top CSR amply illustrate the
commitments of the company towards the goals and the future growth opportunities. According
to the Dow Jones Sustainability Indices, it can be observed that Burberry as one of the top
performing organizations for sustainability in Consumer Durables & Apparel’ sector (Gill,
2018).
Finally the Burberry brand, like many others are subjected to the vulnerability of the
trademark, copyright infringements as well as the intellectual property laws in the rest of the

BURBERRY PLC 8
countries. Burberry heavily invested in the IT solutions to evaluate and the review the
performance of the company (Zahari and Romli, 2018). To ensure the long term success the laws
and rule set by the government of the United Kingdom and which must be complied by the
Burberry. There are certain data protection laws which has emerged has the critical issue an
Burberry Luxury has to consider the strong legal and the technological mechanisms to protect
itself from the different types of breaches. Not only this employment and the labor laws literally
influenced the Burberry. With all this events to be taken in mind the Burberry started to patent
the products and sell those products. Thought the right of the patents may not solve the entire
problem but yet it helps in minimizing the volumes (Fernie and Sparks, 2018).
From the above analysis it can be stated that Burberry is one on those companies that requires
sudden attention when different factors are considered. Also from the point of view of the
investors Burberry must focus on the most crucial factors like the political, economic and the
environmental factors. That does not mean that the rest of the factors must not be considered.
Further the corporate governance of the Burberry is sound and the chief executive officers must
ensure to keep a sound alignment between the top and the operational level of the management
as the external factors may affect the performance but so does the internal factors as well.
Therefore as an investor one must take into consideration both the factors and using these type of
rules on the regular basis gives an insight about how the company is operating or what are the
key investments which are made by the company.

BURBERRY PLC 9
References
BORSBOOM, L., CASE, B. and LAWSON, N., 2018. BURBERRY JOUSTING FOR
REDEMPTION. LBMG Corporate Brand Management and Reputation-Masters Case Series.
Burberry, 2018. Annual report [Online] Available from
https://www.burberryplc.com/content/dam/burberry/corporate/Investors/Results_Reports/2018/
Burberry_AnnualReport_FY17-18.pdf [Accessed on 18th March 2019].
Charan, R., 2017. HOW HIGH‐POTENTIAL LEADERS CAN MASTER THE MACRO
ENVIRONMENT. Leader to Leader, 2017(85), pp.31-36.
Dimitrakopoulou, P., 2015. The Development Of A Bussiness Strategy Model For A Luxury
Brand.
Donzé, P.Y., 2018. The birth of luxury big business: LVMH, Richemont and Kering. In Global
Luxury (pp. 19-38). Palgrave, Singapore.
Doyle, S.A. and Moore, C.M., 2018. Luxury Brand Outsiders: Understanding the Success of
British and American Luxury Brands. In Global Luxury (pp. 65-86). Palgrave, Singapore.
Esser, I.M., Macneil, I. and Chalaczkiewicz-Ladna, K., 2018. Engaging Stakeholders in
Corporate Decision-Making through Strategic Reporting: An Empirical Study of FTSE 100
Companies. European Business Law Review, 29(5), pp.729-772.
Fernie, J. and Sparks, L. eds., 2018. Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
Gill, N.S., 2018. Relationship between diversity on the board of directors’ and firm financial
performance (Doctoral dissertation).
Henderson, E., 2018. It is Impossible to Overdo Luxury: French Variety of Capitalism and its
Contribution to Luxury Market Presence (Doctoral dissertation, Croft Institute for International
Studies).
Hill, P., Korczak, A. and Korczak, P., 2019. Political uncertainty exposure of individual
companies: The case of the Brexit referendum. Journal of Banking & Finance, 100, pp.58-76.
Javeed, N. and Mukhopadhyay, D., 2017. Exosomes and their role in the micro-/macro-
environment: a comprehensive review. Journal of biomedical research, 31(5), p.386.
Loonam, J., Eaves, S., Kumar, V. and Parry, G., 2018. Towards digital transformation: Lessons
learned from traditional organizations. Strategic Change, 27(2), pp.101-109.

BURBERRY PLC 10
Milman, D., 2018. The Company Share. Edward Elgar Publishing.
Parkinson, M.M., 2018. Corporate Governance in Public Companies. In Corporate Governance
in Transition (pp. 9-41). Palgrave Macmillan, Cham.
Perry, P., Fernie, J. and Woods, S., 2018. The international fashion supply chain and corporate
social responsibility.
Sah, S.K. and Dadwal, S.S., 2018. Managing Strategic Change and ERP Implementation under
Distinctive Learning Styles: Quantitative case of Burberry PLC.
Yu, M., Cao, D. and Tan, J.Y., 2018. CSR-consumption paradox: examination of UK apparel
companies. Journal of Fashion Marketing and Management: An International Journal.
Zahari, A.R. and Romli, F.I., 2018. Analysis of suborbital flight operation using
PESTLE. Journal of Atmospheric and Solar-Terrestrial Physics.