Global Business: Burberry's Expansion Strategy in Belgium Market

This report examines Burberry Group PLC's strategic move to introduce its fashion clothing business in Belgium, highlighting the various business issues and challenges the company may encounter. It delves into fundamental, diversity, ethical, governmental compliance, and financial issues that Burberry must address to establish a strong presence in the Belgian market. The report provides a background on Burberry, including its history, financial performance, and global presence, emphasizing its evolution into a digital-first company through social media marketing. Furthermore, it analyzes the business environment in Belgium using the PESTLE framework, considering political, economic, social, and technological factors that impact Burberry's operations. The report concludes by underscoring the importance of adapting to local culture, adhering to regulations, and building strong customer relationships for successful market entry and sustainable growth in Belgium.

Business Organizations and Environments in a Global Context

Table of Contents
Introduction......................................................................................................................................3
Background to Business Organisation:............................................................................................5
3. Background to Business Environment.........................................................................................8
4. Data/Graphs/Tables:..................................................................................................................10
Reference List................................................................................................................................12

Introduction
A business environment is the sum total of some internal and external factors that influence the
growth of a business (Botha et al., 2014). The factors may not be under the control of a business
organization but those factors may affect the business of that particular organization. Every
business organization has a particular business organization by which it is influenced and the
growth of that business is also dependent on the business environment. The internal elements of
a business environment are value of the business, vision and mission of the business, objectives
of the organization, culture of the organizations, availability of the human resources, influence of
labor union and others. The external elements of a business environment are micro environment
that includes political, economic, social, technological, legal and environmental factors and the
internal elements are some strengths and weaknesses that influence the business. In this
assignment, the cloth company Burberry is going to introduce its business of fashion cloth in
Belgium. Burberry Group PLC is a British company headquartered in London (Zozulya et al.,
2015). The company makes trench coats, outwears, jackets, belts, socks and some other products
of men women and children. In this assignment it has been highlighted how the company is
introducing its new cloth business in Belgium. The business issues have been discussed here that
have been faced by the company.
The issues Burberry Group PLC may face at the time of introducing its business in Belgium are
the following:
Fundamental issues: Burberry Group is going to introduce its business in the new country
“Belgium” and hence, it will be first issue in that country to think whether the new customers
will support the company or not or whether the customers will take the new products fairly or not
(Katzenbach and Smith, 2015). To gain an ethical image of the company the company has to
develop a high level of trust in the minds of the customers. A relationship is to be built among
the new customers by campaign, communication program and others.
Diversity issues: This is the most important issue for doing business in other country. Burberry
Group is going to introduce its business in a new country Belgium. The first issue that may arise
here is the culture of the new country. The employees of Burberry have to adapt them with the
culture of Belgium. They have to know the culture of the local community to develop the

company’s business. In case of recruitment and selection of the company, the company has to
maintain fair selection in the company without any partiality. The language is the other major
factor. In a new country, the pioneers of Burberrry Group may face problem at the time of
speaking with the local people and hence they have to make them familiar with the local people
of that country. The local culture will help the pioneers of the company to know the lifestyle of
the local people and it will help them to produce company’s products accordingly. The local
culture of the people will help the employees of the company to make a good relationship
between the local people and the company. Hence, all these issues have to be solved to promote
the business of the company (Grossman and Valiga, 2016).
Ethical issues: Ethical issues are the other issue here. In some cases it is very hard for the
pioneers of the company to decide what to do and what not. They cannot understand what the
fair decisions are and what are not. As Belgium is a new country in to the company, the company
has to abide by the rules and regulations of the government of Belgium; they have to maintain
the employment rules, environment rules, customers’ protection rules and some other ethical
related rules and regulations related to business (Johnson, 2016). The company should be aware
of the packing laws of the government of Belgium that shoed be abided by Burberry Group.
These will enhance the brand image of the company in the Belgium market.
Compliance of the governmental rules issues: Each and every business company has to
maintain some governmental rules for running the business of the company in that country. The
major business of the company that it is going to introduce is the cloth products. Hence the
manufacturing process is related to the environmental effects. Burberry Group will abide by all
the manufacturing rules, product quality rules and packing rules of the government so that the
consumers cannot charge it for violation of business laws. The company policies are to be abided
by. The employee benefits are also to be provided by the company for employee benefits
(Salamzadeh and Kawamorita Kesim, 2017).
Financial issues: The final issue is the financial barrier for starting up a new business. Burberry
Group has to consider how much financial aid it will get from the government financial

organizations and other non-governmental financial establishments. Apart from its won capital,
financial aid may be required for the establishment of the country in Belgium (Burns, 2016).
Background to Business Organisation:
Burberry group PLC is a British company headquartered in London that deals in clothing in the
fashion industry (Zozulya, et al., 2015). The company mainly deals with trench coat that is a
raincoat made of waterproof materials, ready to wear outwears, accessories of fashion industries
like handbag, umbrellas, wallets, boots, jackets, belts, socks jewellery, watches and the similar
types of products. The company was established in the year 1856 by Thomas Burberry. The
normal clothing business developed gradually and then it developed into fashion industry by
fashion cloths. The fashion cloths later developed in the fashion market. The products of the
company are waterproof, high fabric and cotton based. The first shop of the company was
opened in Haymarket in London in 1891. The company is headquartered at Haymarket now.
Burberry Group PLC is financially strong and in the year 2016, the revenue of the company was
£2514.7 million and operating income of the company was £402.9 million. The net income of the
company in the year 2016 was £314.6 million.
The distinctive check pattern of the company has become the trademark of the company. The
company has its numerous stores and the franchises across the world and sells its products
through third party stores. The company gives concessions at the time of its sales. The company
is listed under the Stock Exchange of London. The company has more than 500 stores in about
50 countries in the world. The trench coats began to be made more than two different colors for
more than 100 years. Now the trench coats both for men and women have started to be made
worldwide in different colors and they are white, red and honey. Considering the need of the
military personnel, trench coat was first discovered by the British officer during the First World
War. The coat has been famous and populous. The aviation garments have also been designed by
the company.
Burberry became associated with the culture of “Chav” and football hooligan culture. This
culture helped the company to product the lower-priced products in the cloth industry. Moreover

Burberry introduced the trademark check pattern and some of company’s products became
branded in some particular venues. The company floated itself in the London stock Exchange in
the year 2002. Burberry became the ready-to-wear license holder in the country Japan.
Burberry first started its online selling in UK and then in United Kingdom and then it introduced
its online selling in European Union in the year 2007. In the year 2016 the company increased its
77% of sales profit for its stores.
The modern world has started to wear Burberry’s cloths. In between 1970s and 190s the
company made agreements with a lot of worldwide manufacturers to produce world-class cloth
products based on British collection such as trousers, shirts, sportswear and some other cloth
products for men and women and children. These all products are distributed through the
company’s stores across the world. Thus, the company has enhanced its brand. The company
has a number of stores across the world like United Kingdom, Africa, Canada, Hong Kong,
Portugal, Nederland, India, Saudi, Poland, Switzerland, Philippines, Finland, Indonesia, Ukraine
and some others.
The main focus of the company is on the products – outerwear, sunglasses, accessories of
fashion and cosmetics.
Burberry is has been struggling for the past few years. In the year 2016, the CEO of the company
highlighted the reinvention of the brand of the company and hence, he announced the company
as a digital company.
In the year 2009, Burberry underwent a marketing campaign on the platforms of social media
like Face book, Instagram, Twitter and others. The users of those social media were urged to
upload their photos in the pages of the company. The website of the company encouraged the
other new users to use the other products of the company. The number of Burberry’s social
media followers has increased day by day and now the Face book followers of Burberry are more
than one million. Thus the campaign led the company to the path of success.
The present age is the age of social media. People spend most of their times in social media
(Ananda et al., 2015). These social media like Face book, Twitter and others have helped the
marketers to promote their market in the global market. Burberry’s page in Face book is the

most populous and there are 15.6 million followers. In Burberry’s pages there are options of
various videos, taking feedback of the customers. Through these systems, the company gets
feedback of the customers and modifies its products and services accordingly. In Instagram, the
followers of Burberry are 10.5 million. In Twitter, the company has 8.09 million followers .
3. Background to Business Environment
Burberry stands as a prestigious fashion company dealing in branded clothing’s and fabrics
perfumes and cosmetics. It is based in Belgium and is a global market. The business environment
of Burberry can be analyzed using the PESTLE framework.
Political
The company Burberry operates in Belgium (London). The political condition in Belgium
induces Burberry to abide by their domestic rules. The company is a Global Organization and
imposes high tax rates on foreigners to endorse domestic production. The high rate of taxes
raises operating costs. However, political instability distorts supply chains and stores (Hines,
2014). The company faces rigid competition in Belgium due to cheap copies formed locally.
Burberry products produced in Belgium are associated to reputation due to their luxury status.
There is political unsteadiness in the country due to different governmental policies. Being a
Global Organization it operates in Asia Pacific, India, Middle East, Africa and America. Various
political policies affect the company.
Economic
Belgium has a well-developed free market economy. Burberry in Belgium depends on
international trade. . Economic recession affects an individual’s expenditure. The customers
favor affordable goods to meet their indispensable needs. Local and competitive brands affect the
company. Visitors from UK buy Burberry products due to its prestigious status. Their reputation
is established as a prestigious English brand dealing in clothing’s and fabrics globally. However,
Belgium’s economy has been placed as the top 20 economies of the world. Therefore, the impact
the economy of Belgium has on Burberry is consistent and strong.

Social
The major customers of the company Burberry are subjected to different cultures and lifestyles.
Different customers prefer different products while some prefer snobbish dressing or skimpy
clothes. Burberry takes into consideration the needs of the customers when distributing goods. It
also endorses its products via social media Facebook or Twitter. However, the social impact for
establishing a business environment in Belgium is considerably excellent. Burberry currently
operates in 489 stores according to May 2016. According to the perspective of establishing a
conducive business in Belgium, the company considers the preferences of its prime customers.
Tourist from all over the world perceives the company as a prestigious English Brand. The
individuals spend their investments with consideration to economic conditions (Kamakura and
Yuxing Du, 2011).
Technological
With the advent of the Internet, the use of technology enhances the competitiveness in a business
market. The company Burberry uses modern and newest technologies to endorse their products
and reach to their prime customers. With innovation in technology in Belgium branded fashion
companies like Burberry, benefit to a much larger extent. However, the customers can reach out
to the company by use of the internet to live stream and purchase their products. Technology also
benefits its customers by providing them with online marketing options. Thus, this creates
efficiency as any customer can have an access to their products without travelling. The
innovation in technology also has led to fast delivery services in elite companies like Burberry.
Therefore, to conduct a business in an environment such as that of the country Belgium there
stands to be a lot of competition.
Environmental
The environment has to be tactically located in order to establish successful business
environment. Burberry is located advantageously in Belgium and endorses its luxurious products
to endorse its prime customers. Products that are produced by this elite company such as inner
clothing, pants socks, are recyclable and do not pose as a serious threat to the environment as
they are made from organic wool. However, environmental catastrophes such as terror attacks

are unpredictable. Companies like Burberry do not risk in investing in areas prone to perilous
attacks. Companies witness huge losses if they invest in hazard prone areas.
Legal
In order to establish a successful business venture in Belgium, one must adhere to its legal rules
and procedures; companies such as Burberry abide by all the legal laws of the country. These
legal laws have a positive effect on the presentation company. Poor policies can have an adverse
effect on the company’s profitability. Labor Law and along with Employment, laws have an
influence on the activities of Burberry. To protect the exclusive rights of the products produced
by Burberry it must have a copyright (Lampasona, 2015). Therefore, legal laws ensure the
patent of the products and leads to efficiency in its sale.
4. Data/Graphs/Tables:
Figure 1: Burberry's global revenue from 2005 to 2017

(Source: statista.com, 2017)
The following graph shows Burberry’s international revenue from 2015 to 2017. In the year
2017, its international revenue amounted to 2.77 billion GBP. In the year, 2015 Burberry was
valued for more than 5.7 billion US dollars. The growth of the Brand is a mirror image of
Burberry’s profits as it had been progressively increasing over the years. In the year 2005, its
profit progressed from around 716 billion GBP to over 2.5billion GBP in the year 2015. In the
year 2015 the retail sales accounted for 70% of Burberry’s global profit generating 1.8 billion
only. The women’s sector is highly advantageous for the fashion luxury company Burberry
markets its sale of luxury products through three different areas mainly retail, wholesale and
licensing. In the year 2015 the endorsement of woman luxury products accounted for 740 million
GBP in profit. Accessories are the most lucrative product line generating 900 million GBP in the
year 2015.Burberry’s accessories includes wallet, umbrellas, blankets candles and various home
accessories.
According to analyst Bill McNamara, at brokerage Charles Stanley says NXT experienced a turn
down through its short-term uptrend and released results that failed to register. The chart shows
how the decline took the share price back to 6975p. It is somehow unimpressive that the bounce
from the low was noticed. McNamara interprets that the Burberry Group took in another stock
that resulted in its short-term uptrend.
However, according to Rocky Muddar from Trade Text the information about the market
mentioned in the graph are volatile. After the colossal gush of over 40% London before closing
27.56 billion.

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Zozulya, D., Radomski, D., Boey, E., Lozanoski, H., Nathani, A. and Sheppard, J., 2015.
Burberry Group PLC.
Zozulya, D., Radomski, D., Boey, E., Lozanoski, H., Nathani, A. and Sheppard, J., 2015.
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