Burberry Group plc: Overview, Porter Five Forces, Segmentation, Targeting and Positioning Approach

This document provides an overview of Burberry Group plc, a British luxury fashion house. It discusses the Porter five forces analysis, including the threat of new entrants, bargaining power of suppliers and buyers, substitute threat, and intensity of rivalry. It also explores the segmentation, targeting, and positioning approach of Burberry, highlighting its geographic and psychographic segmentation, differentiated targeting strategy, and unique positioning in the market. References are provided for further reading.

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Overview..........................................................................................................................................3
Porter five forces..............................................................................................................................3
Segmentation, Targeting and positioning Approach.......................................................................5
Segmentation...............................................................................................................................5
Targeting......................................................................................................................................5
Positioning...................................................................................................................................5
REFERENCES................................................................................................................................6

Burberry Group plc
Overview
It is the British Luxury fashion house situated in London, England and has its outlets
across the globe. Main fashion house of this business emphasize and in distributing the trench
coats, fashion accessories, cosmetics and the fragrances. The company was established in the
year 1856 by Thomas Burberry focusing on development of the outdoor attire, fashion house has
been moved in high level of fashion market with developing first of its respective Kind Fabric
named as Gabardine, which entirely seen as waterproof and breathable exclusively made for
specific brands.
Porter five forces
It is referred as the strategic management tools that analyze an industry and understand
the underlying levers of the profitability accounted within an industry. The managers of Burberry
plc makes use of this tool for enhancing the competitive advantage and he long run profitability
in respect of personal and the household property sector.
New entrant threat- Economies of the scale is very difficult to achieve within fashion
industry that is in which the Burberry group operate its business. This makes easier for those
companies who are involved in producing larger capacities for gaining an advantage over cost. It
also made the production more and more costly for the entrant firms. Thus, this made the entrant
of new threat as the weaker force. Product differentiation in this industry is seen as strong where
an entity within this industry sell its differentiated products instead of the standardized product.
The consumer also seeks the differentiated products and there is strong focus on the customer
services along with advertising. All such factors made the new entrant threat as the weak
workforce in this industry. The capital needs in this industry are reflected as high, therefore, it
becomes difficult for new firms to set up its business with such high expenses in addition to
research and the development cost. Moreover, government policies in this industry or segment
require strict legal and the licensing which need to be fulfill by new entrant prior to starting their
business or selling their products and the services. Thus, this makes difficult for the new entrant
in joining an industry, making new entrant as weak force.

Bargaining supplier power- Number of the suppliers within this industry where Burberry
group operates is low more compared with buyers. This clearly means that suppliers are having
very less control over the prices which in turn made bargaining power of the supplier as weak.
The products that are facilitated by the suppliers in this industry are fairly standardized, very less
differentiated and having the lower switching cost. This in turn made easier for Burberry to
switch the supplier and makes the supplier power a weaker section of the workforce.
Buyer bargaining power- the dynamic s of entertainment and the media industry allows
customers in having higher bargaining power. The sales and the profits are created by company
are mainly based on customers positioned in the varied areas across the world. Lower switching
costs made it possible for customers in seeking other types of media service enterprise and thus
cancel their membership (Porter’s five forces analysis, 2018). Thus, this result to increased threat
and because of this, an entity cannot charge high value for the services from clients and it must
keep rates method in accordance to the need of customers with a very little increase in the prices.
Substitute threat- Risk in relation to substitute in market poses the moderate level of risk
in the media and reflects the business. An enterprise is been facing strong competitors in
comparison with rivalry facilitating same kind of services by way of online streaming and the
rental DVDs. For example- conventional media company is counted as the best example
associated with it. Consumer may participate in other sources of information in comparison to
view online streaming and the media material.
Intensity of the rivalry- There exist a high level of the competition or the rivalry in
fashion industry, engaging companies in striving for retaining existing customers by using cost
effective services or the reasonable prices. The major competitor of the Burberry Plc is Amazon,
as both of such companies offers the DVDs on the lease. Strength of the rivalry is strong within
this market and it is important for business in coming up with an innovative and the distinct
offerings as clients or the audience are seen as more advanced in such contemporary kind of
innovation period.

Segmentation, Targeting and positioning Approach
Segmentation
Geographic segmentation of Burberry brand grew continuously with its digital market
and globalization. The outwear section alone restricted the marketing towards the cooler climates
and thus product development of brand in addition to apparel and the accessories was seen as
inevitable in context of overall growth plan of the company. Even though the Burberry classic
style attracted wide range of the buyers, recently it had tended towards more youthful
demographic kind of segmentation apparent in the numerous advertising or digital campaigns
(STP Approach, 2018). It is seen as psychographic segmentation which solidifies the brand
loyalty from older and the upscale buyers who values the British tradition.
Targeting
Burberry opts for differentiated targeting strategy in which the company created
campaigns which appeal to at least the two market segments or the target groups. Company
mainly targets the high and medium income class people by providing luxurious and unique
fashion accessories.
Positioning
With rejuvenation of heritage, Burberry positioned itself with that of virtually no useful
or meaningful competitors. Innovative staging of their high-end accessory lines that recently
occupied around one-third of its respective product mix had placed Burberry in unique position
of being as solidly positioned and the well-diversified for attracting wide demographic types of
the affluent consumers. The strategic report of Burberry confirmed that its diversified product
offers around accessories, beauty and apparel.

REFERENCES
Books and journal
Online
Porter’s five forces analysis. 2018. [Online]. Available through :<https://casemba.com/youngme-
moon/burberry/porters-analysis.php>
STP Approach. 2018. [Online]. Available
through :
<https://www.researchgate.net/publication/304581621_Burberry_A_Market_Success_Story>