Managing and Leading Strategic Change in Burberry: Trends, Drivers, and Theories

This paper discusses the implications and role of change management in Burberry, one of the biggest and leading fashion brands. It highlights the key drivers and factors that put direct impact on the company, and the trends that may impact on the fashion industry. The paper also outlines the three areas in which changes can be done by leaders or managers in Burberry, and the theories of change management that can be applied to the company.

Managing and leading strategic change

Managing and leading strategic change
Executive summary
Change management is an integral part of each and every company to attain targets and success
around the world. No company can survive and flourish the business without adopting the
managerial changes. The operations and activities of Burberry have been elucidated in the task.
The paper discusses that how the firm adopts the changes by focusing on the various approaches,
strategies and policies. The key trends and patterns that can impact on the company’s
productivity and efficiency also have been explained in the report. The paper highlights that how
Burberry uses innovative models and theories to beat the competitors.
2

Managing and leading strategic change
Table of Contents
Introduction.................................................................................................................................................4
Fashion industry and background of the company.......................................................................................4
Trends and drivers for change influencing and impacting the company......................................................5
Three key areas of change that managers within the organization may be required to work.......................7
Theories of change management.................................................................................................................8
McKinsey 7s model.................................................................................................................................9
Kotter’s theory of change management.................................................................................................10
Organizational power, politics and change................................................................................................12
Conclusion.................................................................................................................................................13
References.................................................................................................................................................14
3

Managing and leading strategic change
Introduction
The primary purpose of this study is to highlight and elucidate the implication and role of change
management. For this purpose, Burberry which is one of the biggest and leading fashion brands
has been chosen in the task. The company offers attractive and fashionable clothes, accessories
and other products to the customers in all over the world. The reason behind the adoption of
change is that the firm wants to be a player in fashion industry. The key drivers and factors that
put direct impact on the company also have been elaborated in the task briefly. The paper
portrays that how McKinsey model and Kotter’s theory help in implementing or initiating the
change process in the organization. It also outlines that how power, politics and change
management are interconnected with each other.
Fashion industry and background of the company
The fashion industry is the growing and leading industry in today’s competitive globe. The
fashion industry entails the design, distribution, manufacturing, marketing, vending, marketing,
and endorsement of all types of apparel for men, children’s and women. Fashion is a popular and
well known style especially in footwear, clothing, accessories, lifestyle, hairstyle, body and
make-up (Bhardwaj and Fairhurst, 2010). Fashion is an effective and often constant trend in the
style in which customers present themselves. A fashion could become the prevailing and
dynamic style in behavior or manifest the newest creations of technologists, design managers,
designers and engineers. Various products and services are provided by the fashion companies in
today’s globalization world (Burberry, 2018).
Burberry group PLC is a British luxury fashion house with it’s headquartered is situated in
London, United Kingdom, the company was incorporated in 1856 (Burberry, 2018). The
company provides ample of fashion products such as outwear, fashion accessories, fragrances,
cosmetics and sunglasses. The main vision of the company is to set a dynamic and effective
position in luxury fashion industry. By maintaining and sharpening the position in the most
rewarding and dividing the segment of the market, the company would drive sustainable success,
4

Managing and leading strategic change
growth and higher margin in the global market, while rendering attractive and unique returns and
revenue. Burberry has employed approx 10,000 employees globally. The firm designs,
manufactures, makes, and sells the products and services under Burberry brand. It is stated that
Burberry offers beautiful made, distinctive, effective and authentic products to the customers in
all over the world. The strategy of the firm is to drive long term and dynamic sustainable
shareholder value by rendering profitability, revenue and cash returns. The employees of
Burberry are inspired, motivated and built through various engagement programs. It reveals that
the company has the right and effective expertise, and capabilities to exercise strategies, the
employee’s efforts and contribution at Burberry are rewarded, celebrated and recognized.
Burberry has a strong and dynamic track record of caring for atmosphere and societies. The firm
established community investment, ethical trade, and environmental sessions and programs in
2004, along with this, the company introduced first five year responsibility goal in 2012. In
today’s era, the company is using dynamic and attractive advertising and promotional strategies
to promote the fashion products and services to a large extent (Burberry, 2018).
Trends and drivers for change influencing and impacting the company
It has been studied that various external factors influencing the fashion industry highly. Some of
the key drivers that affect the business activities and operations of Burberry are discussed below.
Consumer factors: It is analyzed that consumer external components include norms, culture,
demographics, and inhabitants and lifestyle changes. These elements highly influence the fashion
industry in various ways. The needs and expectations of the consumers in terms of clothing and
accessories depend on the current fashion. They demand for the products according to current
trend and fashion. The changing demand and needs of the customers largely affect the
profitability and revenue of Burberry widely Suttle, 2018).
Technological factors: It is noted that technological elements also affect the fashion industry
including accessibility of resources, production and demand. For example, the shortage of
specific materials like leather may force trade and extensive clothing company like Burberry
sells more substitute and faux leather products globally. The retailers might maximize the pries
of cotton clothing if they entertain scarcity of this raw material as they should pay their
producers more. The introduction of new and attractive clothing styles by a rival could shift
5

Managing and leading strategic change
demand away from older fashions. Therefore, it may impact on the sale and revenue of Burberry
adversely Suttle, 2018).
Legal and political factors: It is investigated from the various studies that ample of legal and
political factors influence the business behavior and operations of Burberry. The fashion industry
has constantly been influenced by issues like child labor act and workers rights. Along with this,
the adverse publicity and promotion may put direct impact on sale and revenue of Burberry
Suttle, 2018).
Economic factors: The economic elements might have both the unenthusiastic and favorable
impacts on the fashion industry. During the economic rumble periods, the customers keep
disposable income. Thus, they might have more clothing, accessories and maximizing sales for
garments manufacturers, retailers and wholesalers. Recessions have the adverse effect on the
market share and outputs (Suttle, 2018). The income level and buying behavior of the consumers
also put straight impact on the sustainability and growth rate of Burberry adversely.
The key trends that may impact on the fashion industry are presented below.
Globalization reboots: It is studied that globalization reboots also affect the revenue and market
share of Burberry in the international market.
Online platform come first: It is studied that consumers constantly websites to compare
products, and prices, international online platform are predicted to explore and enlarge their
fashion brands and build extra rendezvous tools and techniques to stay in the competitive market.
It is adversely affecting the progress of Burberry in the international market (Textiletoday,
2018).
Mobile gains momentum: It is stated that mobile payment solutions becoming more popular in
today’s modern world. The key target audience would keep challenging fashion firms deliver
convenient smart phones transactions, where they may buy and pay for products simply. It also
affects the growth rate of Burberry positively (Birtwistle and Moore, 2007).
Sustainability shifts to circular economy: It has been found that fashion company like
Burberry is taking sustainability except their CSR agendas and supply chain. From procuring to
product distribution, Burberry would creatively and effectively expand recycling concepts
6

Managing and leading strategic change
including fibers made from recycled plastic bottles in order to make fashion value chain more
effective and eco-friendly (Textiletoday, 2018).
Three key areas of change that managers within the organization may be required to work
The various key trends like engagement retail, exhibitions for sale, Zoned leasing strategy, social
shopping and body versus fashion affect the long term mission and vision of Burberry to a large
extent (Hill, Jones and Schilling, 2014). The changing current trends need to be kept in mind by
Burberry while operating and functioning business globally. The three areas in which changes
can be done by leaders or managers in Burberry include the following:
Product and services: It is examined from the various studies that the company needs to focus
on the new products and services to gain competitive benefits. It needs to make the changes in
stuff quality so that it attracts maximum number of customers globally. The better and effective
way to approach it is to make improvements proactively and effectively, run experiments with
new iterations of fashionable products like clothing, accessories and apparel (Malerba, 2007).
The company needs to produce some new clothing products to fight with rivals in the universal
market. It has been found that the corporation needs to focus on the approaches and policies of
the competitors to build and develop a dynamic image in the global market. As Burberry saw
sales slip in May, they looked to minimize their product range and monitor on more well known
and effective products like trench coats and handbags. The company needs to focus on the
Unitards and pluralist products to attract more and more female customers in the international
market. To sale these products in the market, Burberry needs to analyze and evaluate the threats
and challenges of the market apart from this, it needs to focus on the plans, products and services
of the competitors to struggle and strive with competitors internationally. Unitards and pluralist
are ongoing trend that help in attracting and retaining maximum girls in the global market
(Broadbridge, 2010).
Technology: The Company needs to make the changes in technology to beat the competitors.
New and advanced technology could be formulated into marketing strategy, branding
presentation, operations, customer communication and many other areas. Avoiding to
incorporate these new and advanced technologies as they become available puts business at a
crucial and critical demerit against the competitors. Burberry is the most significant familiar and
7

Managing and leading strategic change
well known luxury brands in the world. The corporation uses artificial intelligence and big data
to augment sales and customer happiness. It is also noted that Luxury retailers are believed to
hamper unsold fashionable products to protect their intellectual property and brand value (Marr,
2017). Along with this, the company needs to focus on the operations to protect the rights and
interests of the shareholders. It is examined that shareholders had raised voice their frustration
with Christopher Bailey’s performance as chief executive and were dissatisfied at his dual role
that also saw him be the group’s chief executive officer (Thompson and Martin, 2010). CEO was
unable to fulfill the needs and expectations of the various stakeholders; as a result, it puts direct
impacts on the market share and outputs of Burberry adversely. The company needs to identify
and analyze various strategies to overcome and handle the various issues that are being
entertained by Burberry. Various changes in technologies need to be done to struggle with rivals
(Thebusinessdesk, 2018).
Supply chain: It is evaluated that Burberry makes the changes in supply chain to serve more and
more customers internationally. Although, the supply chain at Burberry is touching the lives of
thousands of people globally, the company is actually and actively aware of the opportunities
and responsibilities to drive favorable change, but still some changes need to be done in supply
chain. There should be a transparency in supply chain and logistics in Burberry Company. It will
help the company to attract and retain wide range of customers in all over the world (Kim and
Ko, 2012).
There are various aspects of managerial change and they are interconnected with organizational
change (Runfola and Guercini, 2013). Change has an overlapping effect that puts direct impacts
on the growth rate of the firm. It is directly linked with organizational change. It is noted that
changes do not occur in only one cycle as it takes many cycles for real change to be affected. The
company needs to provide training and development coaching to the workers to adopt the
managerial changes. The managerial changes are directly interconnected with culture and
corporate values. Before initiating the change, the firm needs to focus on the working and
environment and culture (Syrett and Devine, 2012).
Theories of change management
The theories of change management have been elaborated below.
8

Managing and leading strategic change
McKinsey 7s model
It is a framework that analyzes and evaluates the company’s organizational design by seeking at
7 key internal factors that include structure, strategy, values, style, staff, skills and strategy in
order to analyze and evaluate if they dynamically aligned and permit company to accomplish the
desired objectives and goals. McKinsey 7s model was propounded in 1980s by McKinsey
consultants Robert waterman, Tom Peters and Julien Phillips (Jurevicius, 2013). This
framework can be used in various circumstances to facilitate the managerial change, to identify
the merger of the company, to support implement new strategy and to evaluate how each area
might change in a near future. In this model, the seven areas of company are categorized into the
“hard” and “soft” areas. The strategy, systems and structure are included in the hard areas and
soft areas include shared values, skills, style and staff. The 7 elements of McKinsey model are
discussed below.
Strategy: It is an approach and plan developed by the company to attain sustainable competitive
benefits and effectively compete in the international market. Strategy helps Burberry to accept
the various managerial changes in the global market. It has been studied that Burberry needs to
use long term as well as short term strategy to adopt various changes in the competitive market
(Hayes, 2018).
Structure: It reveals the way or manner business distributions and units are integrated and
formulated and includes the ample of facts and information of who is responsible to whom.
Structure refers to the organizational chart that determines the image and financial position of the
brand. Thus, Burberry needs to focus on the organizational structure to attain various competitive
benefits. It is one of the effective and attractive factors of the framework (Jurevicius, 2013).
Skill: It refers to the abilities that the company’s employees perform effectively and very well.
They further include competencies and capabilities. Burberry needs to conduct training and
development sessions to manage and cope up with various managerial changes in the global
market. Skills are necessary to reinforce its new structure and strategy (Paton and McCalman,
2008).
Staff: It is significant element and concerned with what type and how many workers a company
would requires and how they would be trained, appointed, rewarded and motivated. Burberry
9

Managing and leading strategic change
needs to appoint talented and skilled workers to implement new strategy for managing the
organizational changes (Jurevicius, 2013).
Style: Style reveals the manner or method the firm is handled by top management, how they
interrelate, what measures do they take and their significant value, it is the leadership or
organization style of the firm’s leaders. The leaders need to use innovative and unique leadership
style such as democratic and transformational to make happy the workers at the workplace. It
will help the company to adopt the various organizational changes globally (Appelbaum et al,
2012).
Shared values: The shared values are considered the basis of McKinsey 7s model. The shared
values include rules, standards and norms that direct and assist employee performance and
actions and hence are the formation of every company (Jurevicius, 2013).
(Source: Mulholland, 2017).
Kotter’s theory of change management
Kotter’s theory is a primary and first in this list to monitor less on the managerial changes itself
and more on the people behind it. By inspiring and admiring a sense of urgency for managerial
change and maintaining that momentum (Daft, Murphy and Willmott, 2010). This theory could
be implemented to great effect in accepting the business to the current climate.
10

Managing and leading strategic change
Kotter’s theory works by:
 Generate a sense of urgency
 Developing a core coalition
 Incorporating a strategic vision
 Getting everyone on board
 Eliminating barriers and minimizing friction
 Creating short term wins
 Sustaining and effective acceleration
 Setting the various changes in stone
This theory also helps Burberry to strive with rivals in the global market. By using this theory,
Burberry can make the changes in supply chain, technology and operations (Mulholland, 2017).
(Source: Mulholland, 2017).
11

Managing and leading strategic change
Organizational power, politics and change
It is noted that there is a great connection between power, politics and change. The leaders at
Burberry provide power and authority to the workers for maximizing the profitability and returns
globally. Reward power, expert power, coercive power and legitimate power are used by
Burberry to motivate and inspire the workers globally. By exercising reward power, the leaders
motivate and inspire the workers to perform tasks and duties in a hassle free manner. It will
further help the firm to conduct business activities in an effective way. On the other hand, expert
power is based on the workers attitudes and perceptions that a leader of the company has a high
level of experience and knowledge possesses (Pahl-Wostl et al, 2007).
By empowering the workers, the leaders boost and improve their self esteem , morale and loyalty
while functioning internationally. Burberry also delegates roles and responsibilities to the
employees to handle various changes in the workplace. The top management takes feedback and
suggestions from the employees to feel them happy and to make unique decisions internationally.
On the other hand, politics is a significant part of any managerial change. Politics may be defined
as the science centering on assisting and affecting policies and conduct of work. Self interests
and politics generally state how employees feel about the various changes to their employment
and the work they control and manage (Parmenter, 2015). Resistance is the effective or passive
opposition to managerial change and the management of change. Without exercising power,
Burberry cannot initiate the organizational and managerial changes effectively and efficiently. It
is further noted that Burberry needs to focus on the communication channels to collaborate and
communicate with people globally (Vega-Jurado et al, 2008). The firm needs to use open and
strong communication channels to stay in the competitive market. Feedback and reviews from
the customers can be collected by the company to improve and enhance the products and
services in the market. By using effective and dynamic communication and collaboration,
Burberry can be able to resolve and handle the complaints and queries of the customers in the
competitive market. It should also focus on the promotional, advertisement and social media
channels to encourage Unitards and pluralist products in the global market (Alvesson and
Sveningsson, 2015).
12

Managing and leading strategic change
Conclusion
It is concluded from the above limelight event that Burberry needs to focus on the key change
management areas to overcome the rivals in the global market. It will help the company to be a
leader in the fashion industry. The managerial changes can be managed and controlled by having
a innovative and unique plan for the future. The above analysis indicates that Burberry uses
innovative theories and models to adopt changes effectively and actively. It will further help the
organization to maximize market share and returns in the competitive market. Burberry needs to
identify and analyze the various areas such as technology, supply chain and new product to
implement the changes in the marketplace. Along with this, CEO and leaders need to use
dynamic leadership styles to inspire workers for adopting the changes successfully. Open
communication shall be used by the firm to maintain direct relationship with customers across
the world.
13

Managing and leading strategic change
References
Alvesson, M. and Sveningsson, S., 2015. Changing organizational culture: Cultural change
work in progress. Routledge.
Appelbaum, S.H., Habashy, S., Malo, J.L. and Shafiq, H., 2012. Back to the future: revisiting
Kotter's 1996 change model. Journal of Management Development, 31(8), pp.764-782.
Bhardwaj, V. and Fairhurst, A., 2010. Fast fashion: response to changes in the fashion
industry. The International Review of Retail, Distribution and Consumer Research, 20(1),
pp.165-173.
Birtwistle, G. and Moore, C.M., 2007. Fashion clothing–where does it all end up?. International
Journal of Retail & Distribution Management, 35(3), pp.210-216.
Broadbridge, A., 2010. Women at the top in British retailing: plus ca change?. The Service
Industries Journal, 30(8), pp.1219-1243.
Burberry.2018. Our approach [Online]. Available from
https://www.burberryplc.com/en/responsibility/approach.html [Accessed as on 12th November
2018].
Daft, R.L., Murphy, J. and Willmott, H., 2010. Organization theory and design. Cengage
learning EMEA.
Hayes, J., 2018. The theory and practice of change management.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
14

Managing and leading strategic change
Jurevicius.O.2013. McKinsey 7s Model [Online]. Available from
https://www.strategicmanagementinsight.com/tools/mckinsey-7s-model-framework.html
[Accessed as on 12th November 2018].
Kim, A.J. and Ko, E., 2012. Do social media marketing activities enhance customer equity? An
empirical study of luxury fashion brand. Journal of Business Research, 65(10), pp.1480-1486.
Malerba, F., 2007. Innovation and the dynamics and evolution of industries: Progress and
challenges. International Journal of Industrial Organization, 25(4), pp.675-699.
Marr.B.2017. The amazing ways Burberry is using artificial intelligence and big data to drive
success [Online]. Available from https://www.forbes.com/sites/bernardmarr/2017/09/25/the-
amazing-ways-burberry-is-using-artificial-intelligence-and-big-data-to-drive-success/
#17d81484f63f [Accessed as on 12th November 2018].
Mulholland.B.2017. 8 Critical change management models to evolve and survive [Online].
Available from https://www.process.st/change-management-models/ [Accessed as on 12th
November 2018].
Pahl-Wostl, C., Sendzimir, J., Jeffrey, P., Aerts, J., Berkamp, G. and Cross, K., 2007. Managing
change toward adaptive water management through social learning. Ecology and society, 12(2).
Parmenter, D., 2015. Key performance indicators: developing, implementing, and using winning
KPIs. John Wiley & Sons.
Paton, R.A. and McCalman, J., 2008. Change management: A guide to effective implementation.
Sage.
Runfola, A. and Guercini, S., 2013. Fast fashion companies coping with internationalization:
driving the change or changing the model?. Journal of Fashion Marketing and Management: An
International Journal, 17(2), pp.190-205.
Suttle.R.2018. The macroenvironmental factors affecting the clothing industry [Online].
Available from https://smallbusiness.chron.com/macroenvironmental-factors-affecting-clothing-
industry-37254.html [Accessed as on 12th November 2018].
15

Managing and leading strategic change
Syrett, M. and Devine, M., 2012. Managing uncertainty: Strategies for surviving and thriving in
turbulent times. John Wiley & Sons.
Textiletoday.2018. 10 Key trends to drive the global fashion industry in 2018[Online]. Available
from https://www.textiletoday.com.bd/10-key-trends-drive-global-fashion-industry-2018/
[Accessed as on 12th November 2018].
Thebusinessdesk.2018. Business bytes: 5 Challenges for Burberry’s new chief executive
[Online]. Available from http://www.thebusinessdesk.com/eastmidlands/news/6073-5-
challenges-for-burberrychief-executive [Accessed as on 12th November 2018].
Thompson, J.L. and Martin, F., 2010. Strategic management: Awareness & change. Cengage
Learning EMEA.
Vega-Jurado, J., Gutiérrez-Gracia, A., Fernández-de-Lucio, I. and Manjarrés-Henríquez, L.,
2008. The effect of external and internal factors on firms’ product innovation. Research
policy, 37(4), pp.616-632.
16