Strategic Management Plan for Burberry: Analysis of Macro and Internal Environment, Stakeholder Matrix, and VRIO Model

This report provides a strategic management plan for Burberry, including an analysis of the macro and internal environment, stakeholder matrix, and VRIO model. It also includes an evaluation of the company's resources and capabilities using appropriate frameworks.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
P1: Apply macro environment on selected organisation.............................................................1
M1: Analyse macro environment to determine strategic management decisions.......................5
P2: Analyse internal environment and capabilities using appropriate framework.....................5
M2: Evaluate intrinsic environment to access strengths and weaknesses of organisation
internal capabilities.....................................................................................................................7
P3: Apply Porter forces model for assessing competitive forced in given field.........................8
M3: Devise strategies to enhance competitive edge and market position through outcomes.....9
PART B............................................................................................................................................9
P4: Apply range of theories, concept and models for device strategic planning........................9
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy perform an effective activity that represents the accumulation of all the
decisions taken and the actions performed by business to attain business objectives in effective
manner (Aula and Mantere, 2020). It is a outline or action that is crucial to reach the goal on
time. This particular report is based on Burberry. It is a leading British Fashion luxury house,
headquartered in London, England, UK. The company distributes and design the ready to wear
trench cloths, footwear, fashion accessories, fragrances, cosmetics etc. Therefore, to gain
profitable results company emphasis on several strategies so that best one is chosen. It involves
macro environment on Burberry using Pestle, SWOT, ansoff matrix and stakeholder matrix.
Further it also imply internal environment using Mckinsy and VRIO based analysis. This also
includes porters five forced model to gain competitive advantage that helps in developing
strategic plan for longer sustainability in marketplace.
PART A
P1: Apply macro environment on selected organisation
Burberry is a famous British Grandeur fashion products since 1856 in London, UK. The
company mainly emphasis on developing the outdoor attire such as leather goods, fashion
accessories, eye wear, cosmetics, fragrances etc. There are around 9892 employees on worldwide
who works for gaining more profitable results within marketplace (Pedersen, Ritter and
Andersen, 2020).
The vision of Burberry is to become one of the British Luxury brand that deliver high
quality sustainable products to customers. The company also emphasis on value for out
stakeholders.
The mission on which Burberry works is to create open spaces by unlocking the power of
imagination for pushing boundaries to open new possibilities for people, communities and
customers.
Objectives of Burberry is to recognising beauty in every detail by committed in
excellence. They also challenging the ordinary to pursue extraordinary. Core values is to excite
or encourage glamour in fashion by developing strong Burberry community.
PESTLE Analysis
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It is very useful to analyse external environment. For Burberry it is useful to prepare this
because it influence productivity and performance of company. Pestle analysis is presented
below:
Political factor It involves government stability in nation, democracy, law and order
in market etc. In UK political condition is stable that helps Burberry
to make strategies effectively that represent strength for company.
Therefore Burberry perform activities on worldwide that are
connected with different government risk (Haghighi and Jalali, 2018).
However, it present as threat for organisation because they follow
different country rules and regulation to sustain on international
market.
Economical factor It represent the growth rate, interest rate,spending power of customers
etc. In case of UK, growth rate is high due to which customers spend
high on purchasing luxury products that create opportunity for
Burberry in terms of developing their profit market. But in UK
interest rate is also high on pay taxes especially on luxury products
due to which Burberry profit margin is not so high that reflects as
weakness.
Social factor This aspects shows demographic trends, power structure in
community and many more. In this demographic determinant is key
factor in forecasting demand of economy . As Burberry is dealing on
worldwide basis due to which they develop their products by examine
demographic trends that creates an opportunity for company to
maintain high brand value. Hence it also create difficulty for Burberry
to fulfil customers demands on demographic basis along with
different growth rate. As it affects sales of business.
Technological factor Technology is fastest growing sector within business industry due to
which it avail competitive practices for Burberry. Therefore UK is a
country that is highly technological advanced. In terms of Burberry
the organisation is emphasis on using advanced technology so that
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they meet the demands present in marketplace. For this they use card
scanner for easy payments so that customers does not wait in que to
pay the bill.
Legal factor It involves various laws and regulation for the benefits of employees
and customers so that business face success in business world
(Guillet, 2020). In context of Burberry they emphasis on equity law
where they treat every employees equally so that they perform their
task effectively and satisfy customers. Adopting legal framework to
make positive impressions on government company invest high cost
that shows weakness of company.
Environmental factor Therefore this aspect of Burberry are basically effective in terms of
preventing the environment and its surrounding. In this company has
a strength of day to day check on particular waste management within
business practice. Besides this Burberry also face weakness of
becoming a point of criticism to polluting the environment by
adopting different technological aspects.
SWOT Analysis
Strength Weaknesses
The company is iconic fashion brand due to
distinct checked pattern. It offers luxury
quality products to customers and they placed
their ads on fashion websites such as Elle and
Vogue.
The main weakness of Burberry is their high
price of products that limits the customers and
it affects sales and profits of business (Farrukh
and et. al., 2020).
Opportunities Threats
Global expansion is high opportunity to grow
the business effectively along with high use of
E-commerce Burberry can reach millions of
customers worldwide without extra expense of
The major threats of Burberry is that high
competition in luxury market such as Louis
Vuitton, Prada etc.
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operating business manually.
Stakeholder matrix
For examine the stakeholders of Burberry power and interest grid are presented below:
 High power, High interest- These are those in which Burberry Shareholders and
Directors are included because they are the decisions maker and managed the activities
of company very closely.
 High Power, Low interest- These are those stakeholders who holds high power in
Burberry activities (Yuan and et. al., 2020). In this customers are included because
according to them Burberry plan their activities and produce goods and services. As they
have no interest in working of company.
 Low Power, Low interest- In this category government parties are to be included in
context of Burberry because they does not involve in company decisions making and
performing activities.
 Low power, High interest- This are mainly employees, in context of Burberry as they
does not hold power in taking decisions but show high level of interest as they get pay
from company for this it is important that activities performed well.
Ansoff matrix
It refers to strategic management tool that is adopted by firm in order to select best
strategy for growth of business. It involves four aspects that re presented below in context of
Burberry:
 Market development- In terms of Burberry, company highly emphasis on develop
market with their exiting luxury products (Moktadir and et. al., 2020). In this their quality
of products attracts number of customers in new market and helps in becoming a leading
fashion luxury house on international level. Thus it develops market size of business.
 Product development- In this Burberry pivot on enhancing competitive advantage
within current market by developing product for international level customer. In this
company underline on launch new product with range of sustainable organic cloth to save
environment from carbon footprints and global warming. This help Burberry to attracts
customers so that sales and profits are enhanced.
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 Market penetration- This aspects shows company lower their prices for gain short term
objectives. As it is not suitable for Burberry because it is a Luxury product and lowering
price of product negatively impact brand image.
 Diversification- In this firm develop strategy to diversify market and products to
generate profits. Hence, it is risky for businesses. In context of Burberry it is not
represent as Risky stage because they offer unique feature products to customers and also
in a luxury manner that always attracts the eyes of customers to show high status in
community.
From above all strategies, for Burberry market development is best because it does not
involve high cost due to high usage of technology (digital tools) they show they presence on
global level and develops more profitable results.
M1: Analyse macro environment to determine strategic management decisions.
Burberry company operating their business in UK and many other worldwide areas. It
can run their organisation in a very competitive environment. With help of PESTEL model
company can Burberry can identify impact of external factors on business. If they focus on their
political, technological and social condition then at that time it can support opportunities as it
helps to achieving organisational goals that can bring up from external values. Basically,
Burberry company deals in food products, home items and clothing etc. It making its unique
appearance on stores and provides a high profit margin through quality of products. The
economic condition of business is better as compare to others. And company can affected by
some political factors due to enhancing good strategies which is able to overcome with it. Thus,
they can sell their products and services at a lower price that can maintain its economy of scale.
P2: Analyse internal environment and capabilities using appropriate framework
Resources based view
It refers to that model that is mainly used by company to evaluate the strategic plan as it
provides sustainable results to meet competitive advantage within marketplace. Burberry manage
their resources and utilised in proper manner by selling innovative products. There are generally
two types of resources such as tangible or intangible that helps organisation to enjoy competitive
advantage by optimum utilisation or minimum wastage. Hence, company use this strategy to
become sustainable in market and maintain high position prominently.
McKinsy 7s
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It is a framework that is used for organisational effectiveness that involves several
internal factors of organisation that is to be aligned or reinforced to make successful. In terms of
Burberry the McKinsey 7 factors are presented below:
 Strategy- It's a plan that is adopted by company so that they can meet the competitive
advantage. In terms of Burberry they offer Luxury products with quality to sustain in
marketplace (Lin and et. al., 2021).
 Structure- It represent the manner that Burberry adopts to maintain decorum within
business department. Burberry adopts divisional structure as it is effective to complete
the task in appropriate manner without any misunderstanding. Because in this several
departments is developed that are specialize in own field such as finance, HR , marketing
so that proper decisions are taken.
 System- It represent procedure or method that firm adopts to systematically complete the
activities within working place. In terms of Burberry, manager adopts performance
management system, quality management system so that targets are completed in
appropriate manner.
 Skill- It represent skills and abilities of employees who are working within Burberry. In
this manager must offer effective training to employees by examine individual skills so
that customer experience best.
 Style- It emphasis on leadership style that is used by leader of Burberry in order to
encourage or influence followers towards actions (Suoniemi and et. al., 2020). As
Burberry leader adopts transformational style in which they influence workers to
accepting change in positive manner.
 Staff- Burberry is working with 9892 employees in all over the world who contributes
best efforts in achieving company targets and objectives.
 Shared values- It reflects norms and guidelines that is followed by Burberry where they
have core value to offer quality products for maintaining value of products within elite
customer market.
VRIO model
It is a tool that is used to examine resource capability of organisation so that they can
easily understand the effectiveness of resources in achieving targets. In context of Burberry, Vrio
analysis presented below:
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 Value- It involves those resources that gives values to money. In context of Burberry,
The brand recognition is highly valuable for company (Bayo-Moriones, Galdon-Sanchez
and Martinez-de-Morentin, 2020). It is so because company perform social responsibility
function by doing activities for welfare of people and environment that attracts people
attention towards brand. Hence in this manner brand recognition of Burberry is highly
valuable.
 Rare- Physical resources of Burberry are rare because of Burberry international existence
as it is used to expand attractiveness to gain competitive advantage. Brand image of
Burberry also rare that is useful to create trust of customers in customers mind. It is done
because employees offers quality products to customers so that brand image is to be
maintained. Financial resources are also rare because it helps in completing targets on
deadline.
 Imitable- It represent that products and services are not to be copied by others. In context
of Burberry, there financial resources are not copied by other that helps in generating
elite customers community which is not copy by others that helps in gaining profitable
results.
 Organised- It is used for systematic completing the activities. Within Burberry, financial
resources are very useful because of strong financial resources company satisfy
customers needs and wants along with in a systematic manner so that no
misunderstanding is to be created.
Basis Value Rare Imitable Organised
Brand
recognition
Yes - - -
Human resource Yes Yes - -
Physical
resources
Yes Yes Yes -
Financial
resources
Yes Yes Yes Yes
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M2: Evaluate intrinsic environment to access strengths and weaknesses of organisation internal
capabilities.
The internal analysis is critical finding competitive benefits of business as it is a source to
improve market competition through brands. The internal environment based on organisation
strengths and weakness. It can contributing factors that improve growth of Burberry, as it is a
iconic fashion brand and provide luxury products. For identifying the strengths and weakness of
company through internal factors and VRIO analysis and porter's five forces model,it can bring
out that company enhance their capabilities to deal in different products which can bring positive
outcome for company. And organisation can enhancing employees capability that helps to
produce a better productivity. This positive result increase motivation of staff by which they can
achieve business target enthusiastically. The specific tools that can assess internal environment is
product competency, capacity assessment grid etc. The bench marking capabilities and value
chain analysis help to increase profit margin. The overall strategy gives a competitive benefits
for company that they can easily deal in several products and services and target different
customers.
P3: Apply Porter forces model for assessing competitive forced in given field
Porter's five forces model
It refers to competitive model that is adopted by Burberry to make appropriate strategies
to gain competitive advantage within marketplace. The five forces are presented below:
 Bargaining power of buyers- In terms of grandeur products the power of buyers is
medium to low (Tiwari, Sharma and Sharma, 2021). In luxury brand generally customers
are those who are rich and for them price is not matter but due to number of luxury
brands are available who offer homogeneous products as Burberry such as ZARA,
PRADA, Gucci etc. then customers switch their brands as per price and quality basis
where customers does not do bargaining in buying the products.
 Bargaining power of suppliers- The power of suppliers is moderate because there are
several number of buyers in all over the world and even various luxury brand even finish
the whole production process by their own. In context of Burberry, company do
partnership with some vendors who offers unique fabric to Burberry such as Peru and
organic cotton yarn that helps in developing the trench coat causes higher bargaining
power of supplier on Burberry.
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 Threat of new entrant- In luxury fashion industry, the threat of new entrant is low
because to enter into the luxury brand company need huge capital and resources to
survive and attracts number of customers.
 Threat of substitute- In luxury fashion industry the threat of subsitute is moderate
because consumer choose other brands such as ZARA, Prada, Gucci etc. over quality and
also in price (Stepnov, 2021). In context of Luxury brand, customers are generally
possess individuality due to which they do not switch to other brand easily. Hence, due to
their nostalgic and quality products brand loyalty is maintained in marketplace customers
purchased their products and threat of substitute is low for Burberry.
 Rivalry among firms- In particular fashion industry competitive rivalry is medium to
high. Due to high competition present in market Burberry face major competition with
several Luxury brands in terms of quality and price such as ZARA, PRADA etc.
M3: Devise strategies to enhance competitive edge and market position through outcomes.
Burberry company is well known in UK market, with basis of certain outcomes
organisation can take three strategies that can helps to achieve sustainable competitive
advantage. Burberry can use Low cost strategy as it provide high class products which can afford
by only elite class people. This set of limits can affect its sales and profit. If company use this
method that it will be beneficial for achieving success as this increase customer traffic. Because
not only upper class people can afford, medium level people also buy. The differentiation
strategy make various product that can increase customer reach and market competition.
PART B
P4: Apply range of theories, concept and models for device strategic planning
Porter's generic strategies is a strategic tool that is mainly used by Burberry to examine
different areas that contributes in success and developments of company. Porter's generic model
is presented below in context of Burberry:
 Cost leadership- It is a strategy in which company offered goods and services at low
cost. In terms of Burberry, if company lower their prices then it negatively impact their
brand image. To follow cost leadership, Burberry gives discounts and sale on their
products to maintain customer base and profitability of business. By getting sale and
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discounts customers easily get attracted and firm enjoy high sales and revenue in long
term survival.
 Differentiation- In this strategy, Burberry adopts differentiate strategy by distinct
product features from competitors. Within this Burberry emphasis on offering sustainable
cloth, trench coats to customers so that they attracted towards it and firm attained high
level of profitability in marketplace.
 Focused strategy- In this strategy company adopts both strategy as they offer
differentiate product on low cost to build strong brand image in marketplace (Madadian,
Aerts and Van Caneghem, 2021). In this if manager of Burberry follow this strategy then
they offer modified products to customers with best price that helps in attracting large
base of elite customers so that long term sustainability is to be enjoyed by company.
Bowman strategy clock
It defines that framework which is used to examine several options for strategic
positioning. In this company emphasis on how they can position their products within large
market. In terms of Burberry, these framework are presented below:
 Low price and low value- This strategy is not effective for Burberry because they cannot
offer their services on low price as it impact negatively on the brand image.
 Low price- In this strategy Burberry offer discounts and sale to customers on some range
of products to attract high base of customers.
 Hybrid- In this respective company offers products to customers by using high value and
low price strategy that will develops profits and sales in competitive marketplace.
 Differentiation- In terms of Burberry, company focus on offering modified products to
buyers so that company revenue and sales is developed to high extent.
 Focused differentiation- Burberry use this by developing the focus on differentiation of
products and services by which customers are retain with the company. This helps in
attaining long term survival within marketplace.
 Risky high margins- In context of Burberry, this would be developed by they charge
over price for their products then it create risk on profit and sale margin of company.
 Monopoly pricing- In this strategy limited or one company lead the market by charging
own cost for their products and services. It is not possible for Burberry because there are
several number of competitors are present in marketplace.
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 Loss of market share- It shows negativity on performance and productivity of Burberry
due to which company share prices are negatively impacted so that it would not be
sustain in marketplace.
By analysing above strategy, Burberry adopts the differentiation strategy where they
differentiate their products from their competitors using sustainable practices. It helps in
attracting large base of customers so that more profitable results are attained by firm in long term
survival.
Strategic management plan
Executive summary Burberry is a British luxury fashion house in London that design and
produced ready to wear cloths, trench coats, eyewear, perfumes etc. as
company emphasis on developing their market by modifying their
products and services to develops sales and profit.
Vision Burberry vision is to become best iconic brand in world by serving
qualitative products to customers.
Mission Burberry mission is to unlock the power of imagination by creating open
spaces for people, society and customers.
Strategic objectives The strategic objectives of firm is become identifiable brand in world
market by challenge common to become extraordinary. In this they
emphasis on differentiate their products to competitors to maintain high
position in marketplace.
Strategy Burberry use market development strategy for their growth where they
deliver their products by little bit modify this so that it look distinct from
competitors.
Tactics PRODUCT: Burberry offer classic products such as trench coats, eye-
wear, fragrances, bags etc. within all over the world.
PLACE: Company is plan to expand their business also in developing
countries so that it visibility is increases in international market.
PRICE: Burberry adopts premium competitive pricing strategy so that it
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would sustain in market for longer time period.
PROMOTION: Burberry use social media platform to easily and
conveniently attracts customers in order to develop visibility and
sustainability in marketplace.
Evaluation By using performance indicator tool Burberry measures the performance
of employees to smooth functions of activities. In this they also find
loopholes to remove misunderstanding in effective operations (Zhang,
2020).
CONCLUSION
From the above report it is to be concluded that business strategy is a significant term to
gain profitable results and generate more strategies for success of business. This elucidates
Pestle, swot, stakeholders analysis for examine the macro environment and their related
outcomes on developing strategies for success. Further it also involves internal analysis so that
company effectively understood their resource capability so that more profitable results are
attained by business. In this porters five forces is included for examine the competitive capability
of company that help in generating sustainable growth in business industry. At last it elucidates
strategic plan to fulfil the objectives of business effectively.
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