Types and Purposes of Organizations and Legal Structures of Burberry Group PLC

This report explores the types and purposes of public, private, and voluntary organizations and the legal structure of Burberry Group PLC. It also discusses the size and scope of different organizations and how they link to Burberry's business objectives and products and services offered.

BUSINESS AND BUSINESS
ENVIRONMENT

EXECUTIVE SUMMARY
Present report explained the macro and micro environmental factors that affect decision
making and organizational structure of organizations. PESTLE and SWOT analysis are
conducted to identify these factors of Burberry Group PLC, UK which highlighted positive and
negative impacts. The research also investigated Burberry’s internal and external environment
which clarified strengths and weaknesses of London based fashion house. Further, this report has
discussed the organizational objectives, legal structures, mission, vision, business objectives and
information about stakeholders of Burberry Group PLC.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Types and purposes of public, private and voluntary organizations and legal structures of
Burberry Group PLC...................................................................................................................1
P2. Size and scope of a range of different types of organizations...............................................3
TASK 2............................................................................................................................................6
P3. Relationship between different organizational functions and relation to organizational
objectives and structure...............................................................................................................6
TASK 3............................................................................................................................................8
P4. Positive and negative impact of macro environment upon business operations of Burberry
Group PLC...................................................................................................................................8
TASK 4............................................................................................................................................9
P5. Internal and external analysis to identify strengths and weaknesses of Burberry Group PLC
.....................................................................................................................................................9
P6. Interrelation of strengths and weaknesses with external macro factors of Burberry Group
PLC............................................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

LIST OF FIGURES
Figure 1: Organizational structure of Virgin Group........................................................................5
Figure 2: Organizational Structure of Burberry Group PLC...........................................................8
Figure 3: Macro environmental factors.........................................................................................10

INTRODUCTION
Business is an activity of an organization or economic system where goods and services
are exchanged for one another with an aim of making profit. Business environment consists of
the factors, forces, individuals and entities which influence an organization where it operates.
Report on business and business environment is prepared with the purpose of understanding
these internal and external environmental factors which affect the business operations and
organizational structure of Burberry Group PLC. The present report will investigate internal and
external environment of Burberry to understand the micro and macro factors which affect its
operations, and organizational structure. It will explain these factors by conducting PESTLE and
SWOT analysis. Also, its positive and negative impacts will be discussed. Strategies needed to
be developed by business for coping up with uncertain and turbulent business environment after
UK’s referendum decision to leave European Union will be explained as well.
LO 1
P1. Types and purposes of public, private and voluntary organizations and legal structures of
Burberry Group PLC
Overview
Business environment is the collection of several conditions i.e. institutional, political,
social, legal and economic factors that are uncontrollable has and have impact on functions of
Burberry Group PLC with affecting its organizational structure and business (Boons and Lüdeke-
Freund, 2013). Business environment includes internal factors comprising employees, objectives,
culture, vision and mission that are under its control. External factors include economy, market,
government, stakeholders and media which are beyond business control which might cause a
threat to the organization. It is the collection of internal and external factors that affect a business
in its operations, performance, functions, growth and survival.
Background
Burberry is a public limited company listed on the London Stock Exchange and is a
constituent of Financial Times Stock Exchange 100 index. It was founded by Thomas Burberry
in 1856 with the concept of developing fashion garments which later on shifted to a high fashion
market after development of Gabardine fabric which is breathable and waterproof (HISTORY,
1

2018). The brand has multiple stores and franchises all over the world which began selling online
in US and UK in 2006 October.
Different types, size and scope of organizations
Private Sector
Private sector is run by private individuals, groups and companies with the motive of
earning or generating profit by employing workers. It is the part of national economy that is
owned, managed and controlled by forming new enterprise or privatizing a public sector
organization. Sole proprietorships, Partnerships, SME’s, Trade unions etc are some private sector
businesses which are diverse area and has a huge role on economy of a country. Virgin Group is
a leading investment company with a global identity and brand image which renders various
products and services including mobile telephony, travel, holidays, music, health and financial
services. It has operations around 50 countries with more than 50000 employees. Their purpose
is to serve society through delivering quality products and services with a profit making motive.
Public Sector
State sector or Public sector is the part of a country’s economy which is controlled by
national, state or provincial and local governments that comprises of public services and
enterprises (Bughin, Chui and Manyika, 2010). These part of national economy offers goods and
services to the public which cannot be delivered by private sector and is composed of all levels
of government and government controlled enterprises. London North Eastern railway is a British
train operating company that operates long distance inter city services and is owned by
department of transport. It manages 11 stations and intend to render services until a new public-
private partnership is established.
Voluntary Sector
Community or voluntary sector are the organizations whose primary motive is to create
social impact rather than generating profits. These are independent organizations which are
called as civil society, tertiary or not for profit sector in contrast to private and public sector.
National Health services (NHS) England is the world’s largest publically funded healthcare
organization. Its purpose is to serve nation and people for the betterment of society and
communities.
Legal structure of Burberry Group PLC
2

Burberry Group PLC is larger than a joint stock company is an incorporated business run
by Board of directors on shareholder’s behalf where they can vote on certain issue and problems
related to the organization (Cantwell, Dunning, and Lundan, 2010). They are listed company in
the London Stock Exchange where it sells it shares to the general public and raises finance to
meet the capital requirements of the business. It is a legally registered company and to meet the
interests of shareholders issues certificate of incorporation and trading that allows it to sell shares
on the London stock exchange. The licensing segment engaged in royalty’s receipts from firm’s
partners in Japan and global licenses of eyewear, watches and European children wear. The
board of directors are collectively responsible for promotion of Burberry’s long term success to
set strategic aims and ensure agenda of discreet and effective controls.
Analyzing how structure, size and scope of different organizations link to business
objectives and products and services offered by Burberry Group PLC
Structure, size and scope of an organization connects with goals of business organization
which sets a huge target as their aim when having an effective organizational structure. An
organization’s people or employees in organizational structure with fair knowledge regarding
subordinates and roles helps in achieving goals with great clarity. If the size of organization is
huge enormous and huge capital investments can be made as companies set their objectives
based on their scope (Carroll and Shabana, 2010). Main aim of every organization is to serve
customers and earn profit which differs according to firm’s size. Burberry Group PLC involves
products that offer change and attract attention of luxury consumers. They focus on delivering
and creating full outfits for customers adding innovation at every price to add new customer
base. The brand delivers luxury items which includes fragrances, trench coats, sunglasses,
cosmetics, fashion accessories and ready to wear outwear.
Growth of international business environment
Due to liberalization of trade and investment, globalization and support of advanced
technologies, international business grew over 20th century. It has led business organizations to
take several transformations and implement strategies to cope with the changing business
patterns and trends.
P2. Size and scope of a range of different types of organizations
VIRGIN GROUP
Background details of Virgin group
3

Virgin Group Ltd. is a private sector enterprise or company is technology focused venture
investor and a UK based multinational venture capital conglomerate. It was founded in 1989 and
has a portfolio of more than 35 companies spread over the internet.
Products and services offered
Investment team of Virgin is focused on core consumer sectors of Travel and tourism,
music, Media, Telecommunication, Entertainment, Energy, Retail, Money, Beverages, Nonprofit
care services, Earth challenges, Financial services and health and wellness.
Size and scope of organization
Virgin Group is an active technology focused venture capital investment firm which has a
strong network of investors, management teams and alumni’s with having a diversified group
into 200 different businesses (Chesbrough, 2010). It has more than 50,000 employees in more
than 50 countries with revenue of £15 billion in 2012.
Vision
“Changing business for good”
 Think about long term impact of business decisions
 Embedding principles, values in all existing and new business investments.
Mission
 “To embrace the human spirit and let it fly”
 To deliver long term capital appreciation through investment in its sectors and seek for
new opportunities to partner with likeminded potential investors and stakeholders.
Business objectives
 Have clear articulated, embedded and measurable purpose in every business which drives
decisions and enhance success resulting I positive impacts on customers, people,
communities and environment.
 To become a global business leader by pioneering systemic change and rising to
challenges.
 To serve customers as per their expectations with high standard innovative services in a
cost efficient manner.
Organizational structure
Virgin Group follows a decentralized decision making process with a focus on
independent responsibility for each business’s development. It follows a structure based on the
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product areas and separated with specialized goals. The strategy is common in its all businesses
with a strong dynamic corporate culture, transformational and charismatic leadership. It has a flat
and multi hierarchical teams with a flexible structure that is people oriented innovative, creative,
future and customer oriented approach.
Figure 1: Organizational structure of Virgin Group
Stakeholder’s information
Virgin Group’s enthusiastic employees are the excellent brand ambassadors who place
the brand at top position in market that help them in achieving growth and success. The
organization prioritizes their employees more as well motivated staff can help in gaining happy
customers.
BURBERRY GROUP PLC
Background details of Burberry Group PLC
Burberry Group PLC is a public limited company headquartered in London which is a
luxury fashion house and has branded stores and franchises around the world (Commander and
Svejnar, 2011). It is listed on the London stock exchange and is famous for its trench coats.
Products and services offered
Burberry is a luxury brand which offers high quality products to consumers delivered
through a combination of superior organic profit growth and continued generation of cash with a
commitment to capital allocation framework. The brand delivers luxury items which includes
fragrances, trench coats, sunglasses, cosmetics, fashion accessories and ready to wear outwear.
Size and scope of organization
Burberry Group PLC has 10,000 employees globally and operates around the world
through franchises and stores. It supports business and society diversity
5
Virgin Group
Air Travel Mobile Financial Retail Hotels and
Leisure Music Rail

Vision
 Establish position in luxury fashion by sharpening positioning in most rewarding and
enduring segment of market.
 Attain sustainable growth and higher margins over time and gain attractive returns.
 Operate responsibly and uphold labor standards throughout operations and activities.
 Attain cross functional connections with a range of team building opportunities and
unique culture
Mission
“Six pillars of strategy- Product, Communication, Distribution and Digital, Operational
Excellence and Inspired People”
Business objectives
Burberry Group PLC’s business model is structured by channel, region and product
division that is supported by corporate functions (Laumer, Eckhardt and Weitzel, 2010). The
luxury brand is aimed at creating authentic and distinctive products to by bringing new fashion to
create good customer engagement, brand value, inspiration and goodwill. The brand also aims at
shareholder value generation, employee’s rewards and recognition for retention, support other
businesses and partners to improve resource efficiency and wellbeing of employees and serve
community by addressing key needs.
Organizational structure
Chief people of strategy and corporate affairs are responsible for all internal people and
health and safety matters of the Burberry Group PLC. The luxury brand also consists executive
team to progress against responsibility goals by reviewing regularly. External advisory
Committee group of leading stakeholders independently with expertise advices on drafting
strategies. Foundation board upholds vision and ensures delivery of charitable purposes.
Stakeholder’s information
Burberry Group PLC is aimed at creating good and long lasting relation with their
customers, Partners, supporters and stakeholders to create a distinctive business identity.
NATIONAL HEALTH SERVICES (NHS)
Background Details of National Health Services
6

NHS is the public health services in UK which is a collective organization established in
1948 as one of the major social reforms after Second World War. It is a public funded healthcare
system for England and is the largest single payer healthcare in world.
Products and services offered
Main services offered by NHS includes; urgent and emergency care, mental, sexual
health services, hospitals, pharmacies, opticians and dentists.
Size and scope of organization
NHS provide majority of healthcare in England that consists of primary care, in patient,
long term patient car, ophthalmology and dentistry. It employees more than 1.4 million
individuals and is operating since 70 years.
Vision
Enable people to live healthier and more independent lives through a high quality,
effective harmonized care.
Mission
“To provide services and care that families and society would want to use”.
Business objectives
NHS is planning to improve the health and wellbeing of local communities, capitalize
and build a strong base to develop local integrated systems and innovative ways of working, test
new ideas while considering risks and explore new opportunities and markets.
Organizational structure
Secretary of state is responsible for the overall work of Department of Health and Social
care which provides a strategic leadership for public health and funding for both in in England. It
is supported by 23 agencies and public bodies. NHS has an independent body and is the
commissioner of primary care services.
Stakeholder’s information
NHS involves people in decisions about health care and consult and include them while
planning or changing commissioned health services. Contributors, commissioners, customers,
collaborators, channels, etc. are some of their main stakeholders who is hugely depend on NHS’s
interest concerns and activities.
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LO 2
P3. Relationship between different organizational functions and the way they are linked to
organizational objectives and structure
Interrelationships between organizational functions and impact on Burberry Group PLC’s
organizational structure
Organizational structures depend on business functions of Burberry Group PLC as it
makes their structure and objectives to serve the customers. They generate objectives to increase
productivity and create an effective organizational assembly and deliver customers with
distinctive products (Prajogo, 2016). There are various aspects related to various types of
organization that needs to be analyzed effectively which make an impact on business. Some of
the organizational functions that vary indifferent manner in organizations are:
Management: It is an effectual execution of Burberry’s activities by effective
communication of organizational objectives which impact overall performance and decision
making of business. It is done by effective management team involved in managing
organizational activities that affects productivity and profitability of Burberry.
Finance: This department or functional unit of Burberry controls and manages the flow
of capital, cash and resources in and out of the organization. It prepares, allocates and sanctions
fund or capital for investment, advertising, purchase, etc. of Burberry Group. Every department
of Burberry is interrelated with this functional unit as it manages all the cash inflows and
outflows of the organization.
Human Resource /Administration: It is necessary to effectively execute activities in
Burberry which are related to hierarchy that lead to taking flow and delegation of responsibilities
and roles that affects overall performances. It also includes delegating authorities and tasks,
providing training and development to employees to make organization’s productivity better.
Advantages:
 Inter employee relationship among various organizational functions assists business to
maintain cooperation that will lead to increased productivity and profitability.
 It increases effectiveness in business through association of employees
 Rises profitability level of organization and business as every employee of different
functional department shares information
Disadvantages:
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 Employees knows and understands job responsibilities and operations of other
departments and functional units that might be used to manipulate and harm organization
or its operations.
 Competition is increased among departments that might lead to rivalries and conflicts.
Figure 2: Organizational Structure of Burberry Group PLC
LO 3
P4. Positive and negative impact of macro environment upon business operations of Burberry
Group PLC
PESTLE MODEL to analyze macro environment of Burberry Group PLC
Political
Burberry operates indifferent countries so it needs to abide domestic rules, laws for
favorable activities of business (Savrul, Incekara and Sener, 2014). Changing regulations and
legislations of international markets or countries will force Burberry to reinforce its policies and
procedures to suite the operations and performance of its business activities.
Economic
Downturns in economy affects spending of individuals and as UK decided to leave
European Union the financial market is experiencing a fall that might affect Burberry. The
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Board
Chief Executive
Officer /
President /
Creative Officer
Senior Leadership
Team
Audit Committe
Risk Committe
Global Ethics
Committe
Global Health and
Safety Committe
Remunertaion
Committe
Nomination
Committe

increased inflation and exchange rates will negatively impact the operations and business
activities of Burberry leading to reduced production and rise in price of its offerings.
Social
Shared beliefs and attitudes of UK’s population impacts Burberry in product design,
marketing and organizational objectives. Changing tastes and preferences of customers and their
rationales that are influenced by various changing trends and emerging demands will affect
negatively the business of Burberry tending them to incorporate business strategies and policies
to attract customers by rendering them offerings according to their likes and interests.
Technological
Use of latest technologies helps Burberry Group PLC in advertising to reach out to
targeted customers and markets of UK (Teece, 2010). It also assists them in promotional
activities and online shopping creates efficiency and recognition among people of all ages.
Rapidly changing technological advancements force Burberry to implement such technologies,
systems and platforms to develop and produce innovative products and services to customers in a
cost efficient manner.
Legal
Burberry must follow rules and regulations set by government of countries within which
it operates. Also labor and employment laws must be abided to avoid issues and problems that
might hinder their business. Implementation of mandatory legislations and laws abided by
government of UK and other countries into which Burberry is planning to enter will be a major
concern to avoid hindrances in their business operations and activities.
Environmental
Burberry focusses on organic cotton wool which does not harm environment and also
follows several corporate social responsibilities. Rising environmental concern of government of
UK and people are tending Burberry to adopt sustainable product manufacturing with full
utilization of resources using ecofriendly methods and raw materials to cause lesser harm to the
environment.
LO 4
P5. Internal and external analysis to identify strengths and weaknesses of Burberry Group PLC
SWOT analysis to understand influence on decision making of Burberry Group PLC
Strengths
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 Iconic fashion brand: Being the luxury brand with 156 years of history Burberry
remains important with British fashion that assists them in delivering unique products and
take decisions regarding products and services. Burberry can use this a strength factor to
deliver unique and innovative products development to maintain the brand value of
offering exceptional products and services that will assist in gaining better customer base
and attraction.
 Global presence: Burberry has around 500 stores in 50 countries and sells its products
and services through retail and wholesale channels (Zott, Amit and Massa, 2011). This
adds an advantage to Burberry in launching new and innovative products to people
around the world. Being an international luxury brand Burberry can use it as a single
platform to deliver its offerings worldwide with a sole brand image that will help in
retention of customers globally.
 Distinctive and recognizable pattern: Burberry’s unique design is the most copied
trademark in the world and is famous for their trench coat that became popular after the
First World War. This makes Burberry a unique brand which the brand can utilize for
generating brand awareness decisions and promotional activities. Burberry can take this
strength factor to become unique among their competitors by being recognizable with
exceptional designs and marketing strategies.
Weaknesses
 Limited product line: Burberry manufactures apparels, fragrances, beauty products and
accessories which is limited in luxury and fashion. Brand follows this product line to
maintain the status of the goods and organization. Burberry need to focus on their product
lines by taking decisions to introduce new products and services.
 Price range: Being a luxury brand and products manufactured with high quality and
uniqueness makes Burberry’s products and services expensive that cannot be afforded by
young age population who aspire to lead lifestyle. Burberry must fix price and take
decisions regarding cost included and price fixation of goods.
Opportunities
 Changing lifestyle: Due to development of economies, taste and preference changes
results in downfall of demand of premium luxury goods and services of Burberry.
Therefore, it needs to implement changes in product as per the demands of customers.
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 Expansion of product line: Burberry can expand their product line to meet the demands
of people in UK who are conscious about fashion and trends by adding more products
that are fashionable to meet the rising need of customers
 Competition: Intense or high competition in UK market from other brands like Gucci,
Prada, Louis Vuitton etc. possess serious peril to Burberry (Gecevska and et.al., 2010).
To cope up with competition Burberry need to introduce new and improved products that
are unique from rivals to gain competitive advantage.
 Fake products: Burberry faces a major issue of imitation that affects brand equity as
there are various fake brands in market that are copying the products and services and
design of Burberry which is a serious threat to the international luxury brand.
Figure 3: Macro environmental factors
(Source: Business Environment Types (External Micro and External Macro), 2018)
P6. Interrelation of strengths and weaknesses with external macro factors of Burberry Group
PLC
Burberry Group PLC’s micro and macro environment are interrelated to each other in
many ways. Changes in any of these factors affect company’s operational performances and
profitability. For instance, a change in taste and preference of consumers will provide the brand
to develop new products and services according to their demand. The luxury brand also operates
in personal and household goods in several countries and faces instability due to changes in
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policies of nations. Also decrease in tourists has also led to reduced sales and revenues (Boons
and Lüdeke-Freund, 2013).
They will have to adjust their product pattern and make it according to styles and
preferences of communities. Global presence is an opportunity for Burberry to get an entry into
any market as the brand has attained awareness and goo image that would benefit organization.
Burberry is a luxury brand that offers distinctive and unique products and services to fashion
minded people that can have an experience and history of 156 years. These strengths and
weaknesses of Burberry are the major internal factors that need to be developed and utilized for
implementing strategies and policies for reducing the impact of external factors of threats and
take the benefit of opportunities available to the brand.
Entry to new markets like Turkey, Thailand, Egypt and several countries is a way to
succeed in future as developed economies are having high competition. Burberry’s major
proportion of sales is from Asian markets and due to changes in taste and preference, economic,
regulatory and political environment affects the brand adversely. Burberry should change their
organizational structure, activities, operations according to these factors to meet their objectives
and goals.
PESTLE and SWOT analysis on Burberry explained various positive and negative
impacts of the firm and its business. Burberry being a globally present brand has a high brand
awareness and customer base. It is the largest luxury brand with distinctive patter which can be
utilized by the company to reach out to new markets without much promotional activities. The
firm’s high price range and limited product line may cause customers to choose from rivals who
are also offering similar products in same price range.
CONCLUSION
The present report discussed internal and external factors affecting Burberry Group
PLC’s organizational structure and profitability. PESTLE analysis is conducted to identify the
macro environmental factors which have a positive and negative effects on productivity and
operations of Burberry. SWOT analysis is conducted to analyze the strengths, weaknesses,
opportunities and threats that are the internal capabilities and limitations of Burberry which assist
firm in developing organizational objectives and to have control on outcomes that may hinder
business. This report also analyzed various interrelations of Burberry’s strengths and weaknesses
13

with macro environmental factors which may help company in attaining a strong market position
and competitive advantage over others.
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REFERENCES
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business trends to watch. McKinsey quarterly. 56(1). pp.75-86.
Cantwell, J., Dunning, J.H. and Lundan, S.M., 2010. An evolutionary approach to understanding
international business activity: The co-evolution of MNEs and the institutional
environment. Journal of International Business Studies. 41(4). pp.567-586.
Carroll, A.B. and Shabana, K.M., 2010. The business case for corporate social responsibility: A
review of concepts, research and practice. International journal of management
reviews. 12(1). pp.85-105
Chesbrough, H., 2010. Business model innovation: opportunities and barriers. Long range
planning. 43(2-3). pp.354-363.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance. The Review of Economics and Statistics. 93(1). pp.309-337.
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business environment. Journal of Industrial Engineering and Management. 3(2). pp.323-
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Laumer, S., Eckhardt, A. and Weitzel, T., 2010. Electronic human resources management in an
e-business environment. Journal of Electronic Commerce Research. 11(4). p.240.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics. 171.
pp.241-249.
Savrul, M., Incekara, A. and Sener, S., 2014. The potential of e-commerce for SMEs in a
globalizing business environment. Procedia-Social and Behavioral Sciences. 150. pp.35-
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Teece, D.J., 2010. Business models, business strategy and innovation. Long range planning.
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Online
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Business Environment Types (External Micro and External Macro). 2018. [Online]. Available
through: <http://www.economicsdiscussion.net/business-environment/business-
environment-types-external-micro-and-external-macro/10095>.
HISTORY. 2018. [Online]. Available through:
<https://www.burberryplc.com/en/company/history.html>.
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