Burberry Company History and Management Structure

The assignment provides a comprehensive analysis of Burberry's company history, management structure, and environmental considerations. It highlights the importance of adopting new technologies to increase productivity and reach high fashion markets. The study also emphasizes the effective management process used by Burberry, making it one of the most global brands.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
1. Examine The Management Structure And The Governance Of Burberry..............................1
2. Assess The Importance And Evaluation Of The Effects Of External Environmental Factor
Which Influences Burberry.........................................................................................................6
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
Business environment refers to demand, supply, customer need, customer satisfactions,
management, changes in technology, current and future trends. Management is a means to
manage process of organisation by cooperating employees and managers. Present study lay
emphasis on Burberry. It is a PLC group fashion company which provide luxurious products like
cloths, dresses, cosmetic products. Its headquarter is in London (Weston, 2016). This report
evaluates the management and organizational structure of Burberry including its history. It
explains how company is governed by its Board of Directors. It examines environmental factors
that influences company by Pestle analysis and why is it important for company.
TASK
1. Examine The Management Structure And The Governance Of Burberry
Overview Of Burberry
Burberry Group PLC is a fashion house. It was founded in year 1856 by Thomas
Burberry at London. Its headquarter is in London, England. It is globally leading company in
Fashion industry. Its business is to design and sell trench coats, ready to wear outerwear, fashion
accessories, fragrances, sunglasses and cosmetic. It has 500+ stores in 51 countries at worldwide
level. Its revenue in 2018 was £2,732.8 million. Its Operating and Net income was £410.3
million and £293.6 million respectively in 2018. Its first online selling was in the US in 2006. In
year 2004, Burberry opened its own website. Burberry Group PLC are divided into 3 divisions -
Burberry Prorsum, Burberry London and Burberry Brit. The company employs 10000+
employees. The company is set to grow with increased revenue and become popular with ready-
made attires (Zozulya and et.al., 2015).
History Of Burberry
Burberry Group PLC was founded by Thomas Burberry in 1856 by opening a store in the
Hay-market area of London. Till 1870, it was established by making outdoors attire. In 1879,
Burberry introduced Gabardine made clothes which make Burberry a little famous. In 1888,
Burberry patented gabardine so that another companies can not use it.
In 1891, Burberry opened a store in Hay-market, London. In 1901, Burberry made
Burberry Equestrian Knight Logo and trademarked it 1909. In 1911, Burberry gained popularity
by supplying rugged outdoor attire. In 1914, during world war 1, Burberry trench coats was worn
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by British officers. After war, these coats became famous and it made Burberry more popular at
worldwide level (The History of Burberry and Its Famous Fashion Comeback, 2019).
In 1955, Burberry was acquired by Great Universal Stores till then Burberry was owned
by Burberry Family. During 1970 to 1990, Burberry did collaboration with many textile makers
to produce ready-made attire for Men, Women and Kids. Also, during years, Many famous stars
and celebrities started wearing Burberry which plays an important factor to becoming Burberry a
unique brand.
In 1999, The company changed its name from Burberry's to BURBERRY. In 2006,
Burberry starts its first online store in US and then UK. In 2013, Burberry introduced “see-now-
buy-now” allowing customers to buy collection from online shopping site and through mobile
(Nguyen and Bug, P., 2016).
Organizational Structure and Management of Burberry
Burberry follow functional based hierarchical organizational structure in which company
is govern by Board of Directors.
In hierarchical organizational structure, Burberry functions are divided into tasks.
According to the nature of tasks, jobs are created. These jobs are converted into Departments.
Then Burberry hires Chief Officer for every departments. Under the chief officer, vice president,
general manager, design director, employers, supervisors, leaders and employees are hired. They
are those people who are specialized in particular field and they are given job according to their
skills, knowledge and experiences in that field (Jensen, 2017).
In this structure, whole organization is working at the basis of power of authority in
which top management and chief officers make decision or policy or strategy and communicate
to the middle management team. Middle management team implement those decision, policy or
strategy and communicate to the front line manager and employee representative. Front line
manager and employee representative work on that decision, policy or strategy. If they face any
organizational issues regarding decision, policy or strategy or they need to reporting then they go
to middle management team who then go to top management team. Like this, Management
process is handle by everyone at their level with their works, powers, roles and responsibility
(Zhou and et.al., 2018).
Currently, in Burberry Company, there are 11 directors on boards, in which 7 are non –
executive directors and 4 are executive directors. Both Chairman and CEO are elected by
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company's BOD. Currently Company's Chairman is Gerry Murphy. He was appointed on 12th
July 2018. CEO are Marco Gobbetti and Riccardo Tisci. Macro Gobbetti was appointed on July
2017. Riccardo Tisci was appointed on March 2018.
Stakeholders and Its relationship with Boards Of Directors
Stakeholders are those people who have interest in the company. They are the group
who get affected by business and also who affect the business too (Marshall, 2018). Stakeholders
are broadly divided into 2 groups -
1. INTERNAL STAKEHOLDERS
2. EXTERNAL STAKEHOLDERS
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Illustration 1: Organizational Structure
Source: Burberry, 2019.

INTERNAL STAKEHOLDERS – Internal stakeholders are those who are within the business.
Example of Internal stakeholders are Employees, Managers and Owners.
EXTERNAL STAKEHOLDERS – External stakeholders are those who are not within the
business but influence by business and also do influence the business. Example of External
stakeholders are Suppliers, Creditors, Government, Shareholders, Society and Customers.
The Relationships With Board Of Directors (BODs) are as follows -
1. With Shareholders – Generally people get confused between BOD and Shareholders.
Shareholders are those who own company by holding shares of the company. BOD
manages the company. Shareholders are the one who elect the BOD of the company.
Shareholders invest their money in the company with motive to earn return and maximize
its wealth. This will lead company have to keep them satisfy. For that company need to
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Illustration 2: External And Internal Stakeholders
Source: Overview of Key Elements of the Business, 2018.

earn profits. So how will company grow, make profits and become competitive
advantages. This all are decided by its BOD. BOD is the one who think about the
company's growth and objective. So there is direct relationship between both
stakeholders whose motive is to earn profits.
2. With Employees – There is direct relationship between employees and BOD of the
company. BOD make decisions, policies and strategies to achieve the organizational
goals. Employees are the one who works on these decisions, policies and strategies to
achieve the organizational as well as personal objectives. Employees help the company to
earn profits by doing their performance better. This will lead BOD to achieve their
objectives. Thus, without employees, BOD cannot do anything. With the help of
employees, BOD achieve their targets and earn profits which is beneficial for employees,
BOD and Company as well. Also, BOD's decisions also affect the employees (Mosey,
Kirkham and Noke, 2017).
3. With Customers – BOD acts as a link between company and its customers. According to
the customers trends, preferences, tastes and cultures, BOD make policy regarding
products and services to attract the customers towards company and make them loyal.
Also, BOD is the one who make Corporate Relationship Management Strategies for the
beneficial of customers so that they can gain customers' trust. Without customers'
support, Company and BOD cannot earn profits and enhances its goodwill (Ramus and
Vaccaro, 2017).
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2. Assess The Importance And Evaluation Of The Effects Of External Environmental Factor
Which Influences Burberry
PESTLE analysis is method which an organisation chooses to monitor and analyse
external marketing environment factors. It helps to make strategies for organisation to gain
competitive advantage.
PESTLE stands for -
P – Political Factors
E – Economic Factors
S – Social Factors
T – Technological Factors
L – Legal Factors
E – Environmental Factors
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Illustration 3: Factors of Pestle Analysis
Source: PESTLE ANALYSIS, 2019.

Importance of PESTLE analysis
To start a business or in existing business, Pestel analysis gives strong evaluation to
enhance and to have better growth of organisation. It helps to make strategic plans for marketing
and to maintain team working to get efficient results. It deals with those factors which interrupt
in between to achieve the goal in the best effective way. It set priorities for how to work in
planned manner so that work gets completed on time. It helps to allocate resources worldwide so
that cost of getting materials to make products gets low which increases market share of
organisation. It helps to identify problems that being occurred during business process so that
significant changes can be made to gain better results than before. It gives detailed understanding
about factors that occurred in trading goods and services and helps to make a next business plan
in effective and efficient manner (Abbott, 2015).
PESTLE Analysis of Burberry
This analysis focus on both internal and external factors that influence organisation
productivity and enhancement. It affects marketing budget for product according to planned
strategies based on Pestle analysis. It stands for political, economic, social, technological,
environmental, legal. All these factors are analysed for organisation and problems with solutions
are evaluated which benefits for organisation.
Political factors- This factor refers to government factors which involved in starting
business or in existing business by applying changes. Every country has its own government and
for a specified time. Government sets their own rules and regulations which is to be followed by
organisation to stand in competitive market. As government changes, rules changes, organisation
has to be flexible and active to change accordingly. For example some countries have high tax
rates so its makes unprofitable for Burberry to give high operating cost in international market.
As Burberry products are luxurious one to it is not affordable for some customers which give
raise to cheap brands. It disturbs supply chain management system across international
boundaries as developing countries has low currency rates due to which products are not sold
due to unaffordable price tags.
Economic factors- This factor lead to profitability of organisation by analysing
competitive market in terms of economical scenario. It includes inflation rate, investment rate,
exchange rate, interest rate, economic growth, annual income of customers worldwide. It
depends on demand of products being rising within public. Government is also being included in
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this to control inflation rate through monitory policy or fiscal policy. For example, high economy
country visitors to UK purchases Burberry products as Burberry product is being on top brands
in UK in terms of fashion products. When number of visitors decreases, it reduces sales and
profit for Burberry. Quality of products matters to customers. Burberry provides qualitative
products such that its price for products is high.
Social Factors- This factor frames the behaviour and attitude of customers towards
organisation. It includes age factor, health, career attitudes, population growth. These factors
affects so much to sell of products. Organisation makes strategies to target population
conditionally in such a way that it makes a competitive advantage against favourable brands. It
helps to make a relationship between marketers and customers directly or indirectly. For
example, each person has its own dressing style. To fulfil customer need accordingly, Burberry
organises campaigns in order to have demands of dresses styles according to various age groups.
Then by using social networking sites like Facebook, Instagram, Burberry promotes or advertise
their products to people according to feedback taken through campaigns (Burberry PESTLE
Analysis, 2003-2019).
Technological factors- Technology is changing highly and it impacts on process of
organisation. It gives new ways to manufacture goods, new ways to interact with customers, new
ways to transport goods or services. It includes research and development process for good
growth of organisation and it also increases infrastructure level. It also disturbs supply chain
management by adopting new technology that makes trouble for employees to learn system. For
example, Burberry uses the latest technology to interact with customers and to promote the
products. Like social networking sites is being used to allow customers to purchase products
online worldwide. It enhances international marketing and aware more and more customers
about their products. It is also beneficial to promote a new product of Burberry as 80% of world
population is connected on social sites. An option is being used to create an online platform on
main website to buy products from it directly and have feedback from customers to improve their
productivity. It is good for future purpose as technology is getting advanced and public is getting
habitual of adopting new changes. Burberry planned a strategic approach to adopt changes
according to customer needs by taking skilled employees and also by giving training in effective
and efficient manner.
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Legal factors- This factor provide assurance to customers in terms of quality about the
product produced by organisation. It includes consumer laws and rights, product labelling, health
and safety, equality laws. These all laws are made for customer satisfaction purpose. To have
global trade of goods or services, organisation need to understand rules and regulation of
individual nations. For example, Burberry has to make products patent to sell their products
effectively in right concern. But due to some rules and regulations of other countries make loss
for Burberry as they do not allow selling chemical toxicants' product like hair shampoo and all.
Patenting product gives benefits to sell products in large volume but it does not solve the
problem of emulation. Data protection law in UK helps Burberry to keep their data private and
makes a competitive advantage. It is a robust mechanism to use against favourable brands to
increase productivity and popularity of products.
Environmental factors- Over in past years, It is analysed that environmental situation is
becoming critical for organisation to adopt changes. Global warming is major factor of
environment due to which organisation is facing problems regarding safe disposal of waste, safe
and healthy water treatment, changes in climate. Customers want sustainable and confident
qualitative product which are environment friendly. For example, Burberry makes their cloth
products from organic cotton or wool that do no harm environment. Less production of organic
materials make loss for Burberry unconditionally. So, Burberry thinks twice to invest their
money in such countries where resources are available in bulk so that interruption in productions
do not occur. Wastage of material during production is buried in soil as organic materials are
biodegradable one which do not harm soil and do no not created pollution (Zada, 2017).
CONCLUSION
From the above study, it has been summarised about Burberry company history and its
management structure. This unit concluded about hierarchical structure that being used by
Burberry to manage employee and environment within organisation effectively. Environmental
factors are analysed by considering Pestle factors which helps to management process to make it
efficient. Burberry focussed on adopting new technologies that increases its productivity and
helped it to reach to a high fashion market. It can be concluded by saying that Burberry has
effective management process so that it is one of the most global brands.
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REFERENCES
Books and Journals
Abbott, R.J., 2015. Pestle Analysis for Students.
Jensen, K.R., 2017. Global Organizational Leadership for Luxury Companies. In New Luxury
Management. (pp. 33-45). Palgrave Macmillan, Cham.
Marshall, S.J., 2018. Internal and External Stakeholders in Higher Education. In Shaping the
University of the Future. (pp. 77-102). Springer, Singapore.
Mosey, S., Kirkham, P. and Noke, H., 2017. Entrepreneurship with external stakeholders. In
Building an Entrepreneurial Organisation. (pp. 73-87). Routledge.
Nguyen, K.L. and Bug, P., 2016. Burberry: a model for successful technology integration.
Ramus, T. and Vaccaro, A., 2017. Stakeholders matter: How social enterprises address mission
drift. Journal of Business Ethics. 143(2). pp.307-322.
Weston, S., 2016. Branding Burberry: Britishness, heritage, labour and consumption. (Doctoral
dissertation, Goldsmiths, University of London).
Zada, I., 2017. Studying the External Environment of the Organizations and Evaluating the
Strategic Options to Win a Business Competition.
Zhou, Z., and et.al., 2018, October. Fashion Sensitive Clothing Recommendation Using
Hierarchical Collocation Model. In 2018 ACM Multimedia Conference on Multimedia
Conference. (pp. 1119-1127). ACM.
Zozulya, D., and et.al., 2015. Burberry Group PLC.
Online
Burberry PESTLE Analysis. 2003-2019. [ONLINE]. Available through :
<https://businessteacher.org.uk/pestel/burberry.php>
The History of Burberry and Its Famous Fashion Comeback. 2019. [ONLINE]. Available
through : <https://theculturetrip.com/europe/united-kingdom/england/london/articles/the-
history-of-burberry-and-its-famous-fashion-comeback/>
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