Burberry Group PLC's Organizational Structure and Profitability Analysis

The present report conducts a comprehensive analysis of Burberry Group PLC's organizational structure and profitability by examining internal and external factors. A PESTLE analysis is performed to identify macro environmental factors affecting the company's productivity and operations. Additionally, a SWOT analysis is conducted to analyze strengths, weaknesses, opportunities, and threats that impact the company's capabilities and limitations. This report aims to provide insights into Burberry Group PLC's business operations and competitive position in the market.

BUSINESS AND BUSINESS
ENVIRONMENT

EXECUTIVE SUMMARY
Present report explained 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...........................................................................................................................5
LO 1.................................................................................................................................................5
P1. Types and purposes of public, private and voluntary organizations and legal structures of
Burberry Group PLC....................................................................................................................5
P2. Size and scope of a range of different types of organizations ..............................................7
LO 2...............................................................................................................................................11
P3. Relationship between different organizational functions and the way they are linked to
organizational objectives and structure......................................................................................11
LO 3...............................................................................................................................................13
P4. Positive and negative impact of macro environment upon business operations of Burberry
Group PLC.................................................................................................................................13
LO 4...............................................................................................................................................14
P5. Internal and external analysis to identify strengths and weaknesses of Burberry Group PLC
....................................................................................................................................................14
P6. Interrelation of strengths and weaknesses with external macro factors of Burberry Group
PLC............................................................................................................................................16
CONCLUSION .............................................................................................................................17
REFERENCES..............................................................................................................................18
HISTORY. 2018. [Online]. Available through:
<https://www.burberryplc.com/en/company/history.html>..........................................................19

LIST OF FIGURES

INTRODUCTION
Business is a process followed by the firm or economic system including the exchange of
goods and services 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 micro and
macro environmental elements which impacts business operations with 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.
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 PLC firm enlisted at Stock exchange of London (LSE) is a part of the stoke
exchange of Financial times top 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, 2018). The
brand has multiple stores and franchises all over the world which began selling online in US and
UK in 2006 October.
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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
closely-held, handled and disciplined by forming a new firm or privatizing a PLC sector
organization. Sole proprietorships, Partnerships, Small and Medium Enterprises, Trade unions
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. They are self sustained firms which are called as
society, tertiary or NPO 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
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
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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 sunglasses, timepieces and European kids aperal. The
board of directors are collectively responsible for promotion of Burberry’s elongated success to
set proper aims and ensure agenda of discreet and effective management.
Analysis of size, scope and structure to have a good linkage to Burberry Group PLC
Size, scope and structure 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 to have attention of high end buyers. They concentrate on delivering or
forming full apparels for customers with inclusion of innovative approaches at every price to add
new customer base. Selected firms 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.
VIRGIN GROUP
Background details of Virgin group
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
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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”
 Taking business decisions with long lasting impacts.
 Embedding principles to existing as well as investments of new business with adding
values to it.
Mission
 “To embrace the human spirit and let it fly”
 To give consistent paybacks from the effective returns from the investment made within
the company and seek new opportunities of growth for the investors and stake holders.
Business objectives
 Have clearly joined, incorporated and calculable operations which assists decision
making improvement in effective resulting in positive influence on buyers and nature.
 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
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.
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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 with branded stores and franchises available globally (Commander and
Svejnar, 2011). It is enlisted on LSE and is famous for trench coats.
Products and services offered
Burberry is a luxury brand which offers high quality products to consumers delivered by
generation of money 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
Vision
 Establish position in high end apparel section with proper profitability.
 Attain effective investments 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
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(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 advice's 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 buyers,
investors, supporters and stakeholders to have a distinctive business identity.
NATIONAL HEALTH SERVICES (NHS)
Background Details of National Health Services
NHS is the public health services in UK which is a collective organization set up in 1948,
after Second World War as one of the major social reforms. It is a public oriented healthcare firm
for UK and is the largest single healthcare payer.
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
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“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 accountable for the overall work done by Health and Social care
Department, providing a strategic leadership and funding for both in UK. It is supported by 23
agencies and public bodies. NHS has self sustaining structure and is the commissioner of
primary care services.
Stakeholder’s information
NHS involves people related to health care and consult or include them while designing
or changing health care measures. Contributors, commissioners, customers, collaborators,
channels, etc. are some of their main stakeholders who is hugely depend on NHS’s interest
concerns and activities.
LO 2
P3.
Interrelationships between business activities 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 proper management of work force involved in maintenance and
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
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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:
 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.
PESTLE for analysis macro environmental factors of Burberry Group
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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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.
SWOT analysis to understand influence on decision making of Burberry Group
Strengths
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 Iconic fashion brand: Being the luxury brand with history of 156 years, Burberry
remains important with UK's trends 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 operated around 50 countries with 500 stores and sells its
products and services through outlets (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 clothings, fragrances, cosmetics and
accessories which is included in high ended 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 buyers aspiring to lead luxury lifestyle. Burberry must fix price and take decisions
regarding cost included and price fixation of goods.
Opportunities
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 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. 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.
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
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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
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.
PESTEL of BurBurry Group PLC
Political: As the selected firm operates all over the world, it will be susceptible to
different political conditions and the domestic restriction and supportive surrounding. If the
political condition went out to be unfavorable for the organization, this will impact their supply
chains and store functionality in much suitable manner.
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STRENGTH:
 Due to the Brexit, company brought many benefits such as increasing brand image and
also brought in ideas of British-ness to firm.
WEAKNESS:
 Due to terrorist attack, company's sale is huge dropped and reduce in number of tourists.
Economic: the purchasing power of their customers and financial stability within the
country is the major factor or operations that is been followed by the firm. This is required to be
looked after by the organization that will support a good placing of business activities and
operations to a greater extent. As the Burburry's products are been marked as the luxurious
commodity, maintaining the financial consideration is very important.
STRENGTH:
 Firm utilize economic factor such as Personal and Household Goods industry growth rate
to forecast growth.
WEAKNESS:
 The sale of firm is fell drastically, due to economic slowdown in China.
Social: operating in the different country makes it vital for the selected company to
follow out the dress codes and other social implications in much effective and suitable manner.
This will also help the firm to initiate its CSR related operations in much effective way.
STRENGTH:
 Company utilize digital marketing with growing popularity of social media platforms
such as Facebook, Instagram and so on.
WEAKNESS:
 Difference preferences of various customer, so that target consumers are various cultural
background.
Technological: It is the most important factor that is been taken in consideration by the
firm in order to maintain its sales and thus will lead to the rise in operational efficiency of the
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organization in much effective manner. These measures will prove out to be effective and
supporting the firm to operate on the international level.
STRENGTH:
 Firm utilize the latest platforms for promoting and selling of product across the world.
WEAKNESS:
 Impact of cost of technology in Personal and Household Goods industry.
Environment: Burburry will look after the usage of natural fabric and dyes to make its
clothing based products in order to have the least level of negative environmental impacts on the
organization. This will improve the people's goodwill towards the firm.
STRENGTH:
 Company has sustainable corporate social responsibility policy, it is the strength of
business.
WEAKNESS:
 Endangered species, air and water pollution regulations in private and household Product
sector.
Legal: Being operational in multiple countries, the selected business enterprise is
required to be maintaining the legal obligations in an effective way in order to gain the good rise
in the placing of business operations in much efficient manner.
STRENGTH:
 Burberry Plc's apply Anti-trust law in personal and household product in overall the
nation.
WEAKNESS:
 It can lead to theft secret of firm thus overall competitive edge.
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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
with macro environmental factors which may help company in attaining a strong market position
and competitive advantage over others.
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REFERENCES
Books and Journals
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Online
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