Business Strategy Analysis of Burberry

This report provides a comprehensive analysis of the current market situation of Burberry, including brand introduction, business operating structure, SWOT analysis, PESTLE analysis, Ansoff model, and stakeholder matrix.

Business Strategy

Table of Contents
.........................................................................................................................................................2
Executive Summary ........................................................................................................................3
1. INTRODUCTION ......................................................................................................................4
MAIN BODY...................................................................................................................................4
2. Business Situation Analysis ........................................................................................................4
2.1 Brand introduction ................................................................................................................4
2.2 Current analysis.....................................................................................................................4
2.3 Current business operating structure and business model of distribution. ............................5
2.4 SWOT analysis .....................................................................................................................6
2.5 Pestle analysis of Burberry....................................................................................................7
2.6 Ansoff model ........................................................................................................................8
2.7 Stakeholder Matrix ................................................................................................................9
3. Strategic Positions .....................................................................................................................10
3.1 Porter's 5 forces model ........................................................................................................10
3.2 Porter' generic model ..........................................................................................................10
BCG Matrix ..............................................................................................................................11
Market mix of Burberry comprises of :.....................................................................................11
CONCLUSION & RECOMMENDATIONS................................................................................12
REFERENCES..............................................................................................................................14

Executive Summary
The brand taken for analysing the current situation in the marketplace is Burberry. Firstly
the brand was introduced in terms of its history. Then their mission, vision, aims and objectives
were specified and its life cycle phase was also determined, the company is in the growth stage
and the customer segment was also determined. There are various motivations for the customers
to come to Burberry and the company also focuses on the unmet needs of the customer. In the
next part the company's operating structure and business model was discussed.
To analyse their current market situation various internal and external analysis were done such as
SWOT, PESTLE, ANSOFF and stakeholder matrix. To understand their strategic position
porter's five forces model is used and also porter's generic strategies is also used.

1. INTRODUCTION
The purpose of the report is to analyse the current market situation of Burberry by
conducting various analysis such as Pestle, Swot, Stakeholder matrix, Ans off model for macro
environment and porter's 5 forces model with their pros and cons. For devising the strategic
planning for Burberry porter's generic strategies, diversification will be used. Also, customer
analysis will be done based on segments, unmet needs etc. The research was conducted based on
secondary source.
MAIN BODY
2. Business Situation Analysis
2.1 Brand introduction
Burberry is a UK based luxury fashion brand which was founded by Thomas Burberry. The
company was founded in 1856 and initially the focus was on the development of outdoor attire,
but they later moved into the high fashion market. In 1879 Thomas invented Gabardine, a kind of
fabric which was completely waterproof and breathable. In 1888, Gabardine was patented and in
1891 the brand moved into the first London store at 30 Hay market. In all the years from 1892 to
1913 many adds on and innovations took place in the brand. From 1914 to 1918 during the first
world war they supplied various apparel and equipment to the armed forces. And in 1920 the
company became a publicly quoted company for the first time. And various changes and
innovations were introduced in the brand in all these years. The mission of Burberry is to
maintain their integrity and vitality of their brand. They also aim to develop the business which
becomes relevant to consumer tastes and evolving markets. Their main values are to protect,
explore and inspire. The products offered by Burberry are accessories, clothing, cosmetics,
perfumes. The business life cycle of Burberry is categorised in growth stage as their revenues
and profits are growing continuously as they strive to innovate and add something new to the
fashion (Cooper, 2019).
2.2 Current analysis
Burberry has segmented its market based on demographic segmentation as their product
prices are too high therefore, they target higher income group. Demographic segmentation is
dividing the target market based on certain characteristics such as age, gender, income group etc.
they have also segmented their market based on Psychological characteristics as they also focus
on lifestyle, producing for customers who have a traditional, heritage and legacy taste with

stylish outfit. The motivation of customers to buy Burberry products are their unique and high
fashion products. To motivate customers to buy their products they have also launched a theme
name 'The Burberry Love' (Goworek. and et.al., 2016). The people who purchases Burberry
products likely to do with relevant check design. As the company comes under the luxury brand
therefore higher incomes groups are motivated to purchase their products as it adds on to their
status. The unmet needs of customers like innovative design products which is sensible and
strong and have international recognition. The company also promises their customers to provide
high quality products which have a distinctive checks print. As it resonates a multi-generational
and dual-gender audience therefore needs of various segments are fulfilled.
2.3 Current business operating structure and business model of distribution.
The current organizational structure of Burberry is matrix structure company have a
complex project therefore matrix structure best fits the organization.
The main head is the general manger and under him there are four departments which are
production, finance, marketing and R&D managers. Under all these departments they have
respective groups. The main aim is to enhance the degree of coordination and to draw
employees come together which have necessary traits by which they can draw necessary
skills. This type of structure gives Burberry a high degree of freedom, flexibility and
coordination. Model of distribution is the chain through which the products move from
manufacturer to customers. It is the process of dispersing the products so that customers can
purchase it to satisfy their needs and business earns profit. Generally, Burberry follows the
General
Manager
Production
Manager
Production
group
Finance
Manager
Marketing
Manager
Marketing
group
R&D
Manager
R&D group

distribution channel in two formats firstly they started their distribution through retail outlets.
But a decline in sales was observed through this channel therefore they adopted digital
commerce as a distribution channel and now-a-days it is also very effective way for distribution
of the products. To make themselves stand out they adopted a unique pattern for distribution
which allows their customers to immediately 'shop the show' live when the fashion week is going
one. This helps the company in creating a unique technique to attract customers and build an
innovative distribution model (Zhang. and et,al., 2016).
The second type of distribution channel they adopt is wholesale distribution in which
intermediaries help the company to generate large amount of supply. They also reply on deep
collaboration with the wholesalers and also, they communicate with the wholesalers directly
which helps them in controlling their distribution channel (Guo. and Heese, 2017). They also
adopt license distribution channel in which consist of four-link chain of flagship stores, Burberry
blue and black stores, department store concessions and speciality fashion stores. As they are
growing at an exponential rate, the company is now planning to adopt omni-channel excellence.
Mission of Burberry – the mission of Burberry is to develop the business which is relevant to
evolving markets and consumer’s taste and preference and maintain the brand's integrity and
vitality.
Vision of Burberry – the vision of Burberry is to establish themselves in the list of Luxury
fashion brand. They strive to sharpen their positioning in the rewarding segment of the market.
They focus on delivering attractive returns to drive their sustainability, growth and higher
margins over a period of time.
Aim of Burberry – The aim of the company is to position themselves as a sustainable brand
among the list of heritage brands by being a connoisseur brand and focusing on the technology.
Objective of Burberry – The objective of Burberry are short and medium term and they strive to
achieve strategic goals. Another objective is to shape resource allocation and they focus on
achieving smart objectives.

2.4 SWOT analysis
Swot analysis is the analysis of the strength, weakness, opportunity and threats of Burberry so
that it can take future decisions. Strength and weakness consist of micro environmental and
opportunities and threats consist of macro environment.
Strengths – The company has a good track record of coming out of something new, also they
have skilled workforce which are effectively trained (Vlados, 2019). Also, they have a strong
brand portfolio by expanding into new product lines. The company also maintains good quality
of their products. Also, it has a diversified workforce that bring diverse ideas and methodology.
Weakness – The company offers high range products and there are many brands that offer
similar designs and at cheaper rate, also their premium pricing is not affordable by most of the
people. One more weakness is that they have a limited product line and there are many
competitors offering wider range (Sarsby, 2016).
Opportunities – As now-a-day there is trend of online purchasing therefore the company may
take the use of this platform to reach out wide range of customers all over the globe. The green
government drive gives an opportunity to the company to sales their products to federal and state
government contractors. New trends in consumer behaviour of carrying stylish outfit with
traditional and heritage touch.
Threats – There are various competitors that are offering similar designs with affordable prices
and also have a greater availability (Phadermrod, Crowder. and Wills, 2019). The customers also
have a high bargaining power and low switching cost. The supply of innovative designs and
products are also less. The strength of local distributors is also an alarming signal for the
company.
2.5 Pestle analysis of Burberry
Pestle analysis is a strategic tool which is used to analyse the external environment that
can impact the functioning of Burberry. The following is the Pestle analysis of Burberry:
Political factors – as the company operated worldwide therefore laws, policies, political stability
do impact the operations of the company. Due to Brexit there the company is in confusion to
open stores or not and any changes in the rules will impact their functioning. Also, high tax rates
imposed by different countries adds on to the cost of production and ultimately products become
expensive.

Economic factors – With change in disposable income of the people the sales and revenue of the
company is impacted (Perera, 2017). As Burberry caters to only premium customers with high
income groups therefore any little affect will be there. Also, the falling trend of tourism due to
Covid-19 have also impacted the business.
Social factors – Initially the company only targeted the higher income groups but they also
realized that there are more diversified groups and to stay competitive they also serve these
groups. They targeted different groups of society based on customers taste and preference such
as reserved dressing, skimpy cloths. They also engage themselves on social media platforms like
Facebook, twitter etc.
Technological factor – The technology plays an important role in the functioning of Burberry
therefore to reach out customers the company uses advertising and live streaming that allowed
customers to buy online. They also introduced fast delivery to maintain customer loyalty which
helps them give a competitive edge over others.
Environmental factors – The environmental factors do impact the business as deterioration of
environment will adversely affect the working therefore the company uses organic cotton wool
that does not harm the environment in this way they also indulges into CSR which creates a good
brand image of the company.
Legal factors – Various laws impact the functioning of Burberry but also benefits them too. To
operate in the society the company must follow certain labour laws and employment laws. Also,
the patent and intellectual property laws protect the company's unique designs.
2.6 Ansoff model
Ans off model is a tool which is used by the organization to plan their growth strategies.
This model presents a framework extract the opportunities present in the market. Burberry by
this Ans-off model can identify where they can expand. The Ansoff model of Burberry is
discussed below:
Market Penetration – The market penetration of Burberry is good as they are using new
technology like social media platforms to open new opportunities and increase the rate of
purchasing of products by the customers (Loredana, 2017). To penetrate the market the company
is also launching various advertising campaigns through these platforms like Facebook, twitter
etc. they also do it by relaunching their products, improving the existing products.

Market development – Burberry develops new market with the existing products that focuses
on local customers. They also focus on strengthening their store network and investment in
specific stores to develop their market. They concentrate on diffusing for younger generation,
opening stores in different countries etc.
Product development – They concentrated on launching new products with keeping the iconic
British touch to the products. Also, they have diversified into producing accessories, customised
products while safeguarding the brand's identity and uniqueness. This helps the company to drive
growth and increase consumer awareness.
Diversification – This is a strategy in which new products are launched in new markets and the
company do this by monogramming and new acquisitions. The company gets the benefit of
brand diversity.
2.7 Stakeholder Matrix
Stakeholder matrix
Stakeholder analysis is the tool which consist of two variables which are power and
interest. This matrix is used determine different actions which are important to align the goals of
stakeholders with that of the project.
Source: 3 Types of Stakeholder Matrix, 2019
The following are the stakeholders of Burberry:
Customers – Customers are the main stakeholders of Burberry and retention of these customers
is crucial for the company (Eskerod. and Larsen, 2018). The customers of Burberry have high
power and high interest too therefore they come in manage closely category.
Employees – Employees are the main asset of the company as the profits and losses will impact
them too. Therefore, employees have high interest, but low power and they come in the category
of keep informed.
Management – Management of Burberry plays an important role as they use strong and
sophisticated approaches to control the marketplace but there is no internal rigidity. The
management of Burberry have high power and high interest.

Investor – These players are the source of finance for the company and they keep their investors
informed about their approaches to capitalize the marketplace. They have high interest and high
power.
Government – As the company operates in the country and have various impact on the society
therefore the government have high power but low interest.
Labourers – labourer work for the company and they only want wages in return for their work
therefore they come in the category of low power and low interest.
3. Strategic Positions
3.1 Porter's 5 forces model
The porter's 5 forces model of Burberry is as follows:
Threat of new entrants – The threat of new entrants is low in case of Burberry as this segment
needs huge investments and innovation. The company can tackle this threat by innovating new
products, building economies of scale, investing into R&D.
Bargaining power of supplier – The bargaining power of supplier is higher, and this lowers the
profitability of the Burberry as suppliers can charge higher prices. The company can tackle this
by building efficient supply chain which have many suppliers, and pitching suppliers whose
business depends upon the company (Omsa, Abdullah. and Jamali, 2017).
Bargaining power of buyer – The bargaining power of buyer of Burberry is also high as there
are many suppliers and also, many buyers that influence the company to reduce the prices. They
can tackle this by attract new customers, innovating frequently.
Threat of substitutes – The threat of substitute is high in case of Burberry as there are many
other players offering similar products which forces the company to lower the prices which
impacts the profitability of the company. To tackle this, they the company can focus on proving
services, increasing the switching cost.
Rivalry among existing competitors - The rivalry in this industry is intense. To tackle this
situation Burberry should strive to differentiate their products, collaborating with the
competitors.
3.2 Porter' generic model
Porter's generic model of Burberry is as follows:

Cost leadership – Cost leadership is a strategy used by Burberry to stand out by keeping the
prices of their products low. This strategy helps Burberry to expand their target market which is
middle income group people.
Differentiation – This is a strategy which Burberry uses by differentiating their products from
that of the competitors to get a competitive advantage. Burberry do this by innovating new
products and extending the product line after analysing the consumer behaviour.
Focus strategy – This is a strategy Burberry focuses on specific targeted segment to get the
competitive advantage. Burberry applies this strategy in terms of offering best value and the
company revises their branding strategies.
BCG Matrix
The BCG matrix of Burberry is as follows:
 Stars : These are the products which have high relative market share and also have high
market growth. In case of Burberry the non-apparel products and the product
development and design contributes to the growth. Scrafs are the star products of
Burberry. These products generated the maximum sales.
 Question marks : These are the products which have relatively low market share but have
opportunities in this market and in case of Burberry local food and confectionery market
comes under question mark.
 Cash cows : These are those products which have high market share but have low growth
prospects. In case of Burberry their supplier management service is considered cash
cows.
 Dogs : These are the products that have both low market share and low growth rate.
These products do not make earning and does not give any return. In case of Burberry
plastic bags comes under this category.
Market mix of Burberry comprises of :
 Product – The product mix of Burberry is fashionable apparels as they have unique
designs and a heritage touch. The company has a brand which specialize in clothes which
are water resistant and have breathable fabric.

 Place - The stores of Burberry is located globally of which some are franchise and third
party sellers. The company has chosen premium locations for their stores and also the
company has tie ups with various online organizations.
 Price – The price mix of Burberry comes under luxurious and premium pricing as they
have employed amazing craftsmen for making innovative designs and caters to premium
customers. The company also does price discrimination as it is located at different
countries and different countries have different economic condition.
 Promotion – For promoting their products the company have outfitted various celebrities
and also printed their ads in high class magazines and also digital technologies are also
used to launch the products.
Investment/disinvestment strategies
Burberry should invest into underpenetrated markets where there is potential and growth can be
made. They can also invest into digital technologies as it has strong growth in the near future.
The company should disinvest the products which are not reaping any profits and it is
determined by BCG matrix.
 Global and local staretgies
There are various strategy to expand globally a well as locally. Burberry strives to expand
internationally in markets which are untouched by the company and the competitors and have
considered this as their global strategy, and they do not leave their roots of unique designs and
coats. For local strategy the company is getting into partnerships with local traders and sellers
and also they go for competitive pricing strategy to expand locally.
CONCLUSION & RECOMMENDATIONS
It can be concluded that Burberry started so long back and have a mission and values so
high. The company is in the growth stage of business life cycle. The segmentation of the
company is based on demographic and psycho graphic. The company has a matrix organisational
structure also analysis of the micro and macro environment of the organization is analysed to
determine where the company make use of their strength and opportunities to get the competitive
advantage and to overcome the weakness and threats to increase the profitability. Analysis of

external factors are also important as they impact the functioning of the organization. By
analysing Ansoff matrix the firm will be able to know where they can expand and by what
strategy. Stakeholder matrix helps the company to develop a view about the relationship between
different stakeholders and the amount of power and interest they have in the company. The
marketing plan of Burberry porter's five forces model and generic model consist of determining
the profit potential of a market and the forces that shape the competition. The threat of new
entrants is low and bargaining power of supplier and buyer is high. The threat of substitutes is
high and also the rivalry is also intense. To get the competitive advantage over other competitors
porter's generic model was analysed by Burberry, and they stand out by adopting differentiation
and focus strategy.
Review:
1. The investment and disinvestment strategy of Burberry is strong enough as they are
planning to penetrate into the markets which are not yet covered by the company, and
they are also planning to adopt various digital technologies by doing all these they will
get a competitive advantage over others. By disinvesting into the products which are stale
and not performing they can save a lot of money and also can focus on the new emerging
products.
2. The marketing mix of the company is in accordance with their values and quality of
products. As they cater to premium products and serve to the premium customers. The
location they have chosen for their stores are where there are more footfalls. For
promotions also they have done partnership with celebrities and these celebrities are very
influential and can impact on the people's lifestyle. So the marketing mix of Burberry is
also effective.
3. The global strategy of Burberry is also effective as they are investing into different
countries and expanding their empire. And also their local strategy to do partnership with
different sellers and retailers is also good as they are focusing to capture greater market
share and making their products available at majority of the stores and seller. This will
enhance the visibility of the brand and also motivates new customers to try their products.
4. The organisational structure of Burberry is effective and beneficial for their operations as
this structure improves the accessibility to the resources, promotes better coordination
and enhances the communication across all the departments and areas. This structure also

helps in meeting global and regional customer's needs and increases flexibility for faster
decisions.
5. Following points, Burberry needs to do to be successful for the future:
To be successful in the future the company should reinvent and reenergize their products
and should keep innovating their designs as per the trends in the markets that fulfils the need and
expectation of the market. The company should also invest into digital technologies for
purchases and payments, and they should also make additional marketing efforts. They can also
modernize their stores and can extend their product range.

REFERENCES
Books and Journals
Cooper, R.G., 2019. The drivers of success in new-product development. Industrial Marketing
Management. 76. pp.36-47.
Eskerod, P. and Larsen, T., 2018. Advancing project stakeholder analysis by the concept
‘shadows of the context’. International Journal of Project Management. 36(1). pp.161-169.
Goworek, H. and et.al., 2016. Emotionally engaging customers in the digital age: the case study
of “Burberry love”. Journal of Fashion Marketing and Management.
Guo, S. and Heese, H.S., 2017. Product variety and distribution channel structure. International
Journal of Production Research. 55(12). pp.3392-3410.
Loredana, E.M., 2017. The use of Ansoff matrix in the field of business. Annals-Economy Series.
2. pp.141-149.
Omsa, S., Abdullah, I.H. and Jamali, H., 2017. Five competitive forces model and the
implementation of Porter’s generic strategies to gain firm performances.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44. pp.194-203.
Sarsby, A., 2016. SWOT analysis. Lulu. com.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
Zhang, S. and et,al., 2016. Multi-objective optimization for sustainable supply chain network
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Online
3 Types of Stakeholder Matrix. 2019.[Online]. Available
through:<https://www.projectengineer.net/3-types-of-stakeholder-matrix/>