Strategic Management Plan for Burberry

This document provides a strategic management plan for Burberry, a leading fashion brand. It includes an analysis of the impact of macro environment, evaluation of internal capabilities, and application of Porter's five forces model. The document also suggests appropriate strategies to improve competitive edge and market position.

Strategic Management
Plan

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Application of frameworks to analyse the impact and influence of macro environment on
the organisation and its strategies................................................................................................1
M1 Critical analysis of macro environment to determine and inform strategic management
decisions.......................................................................................................................................3
TASK 2............................................................................................................................................3
P2 Analysis of internal environment and capabilities of the organisation with the help of
different frameworks....................................................................................................................3
M2 Critical evaluation of the internal environment to assess strengths and weaknesses of an
organisation's internal capabilities, structure and skill set...........................................................5
TASK 3............................................................................................................................................5
P3 Application of Porter's five forces model to evaluate competitive forces of the market
sector for an organisation.............................................................................................................5
M3 Appropriate strategies to improve competitive edge and market position based on the
outcomes......................................................................................................................................6
TASK 4............................................................................................................................................7
P4 & M4 Application of rage of theories and production of strategic management plan...........7
D1 Critique and interpretation of information applying environmental and competitive
environmental analysis to produce set of valid strategic directions, objectives etc...................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management plan can be defined as a program which is focused by business
entities for the purpose of attaining growth in future by communicating actual position of
company with stakeholders, formulating strategies and organisational goals. In order to reach all
the predetermined objectives it is very important for organisation to pay attention towards it as it
helps to align resources for executing operations successfully (Ansoff and et. al., 2018). The
company which is selected for this report is Burberry which is operating business under fashion
industry. It was founded in year 1856 by Thomas Burberry. Its headquarters are in London, UK
and it is one of the well known large global enterprises. This report covers various topics such as
impact and influence of macro environment on organisation and its strategy, assessment of
internal environment and capabilities, and application of porter's five force analysis.
Additionally, a range of theories and concepts is also applied for the purpose of strategic
planning.
TASK 1
P1 Application of frameworks to analyse the impact and influence of macro environment on the
organisation and its strategies
All the conditions which are there in the economy are considered as the part of macro
environment. In order to formulate strategic decisions for betterment of companies it is vital for
management to pay attention towards it. Corporate Strategy Manager of Burberry is being asked
to product an environmental analysis so that actual position of business could be determined. For
this purpose PESTLE is being used which is as follows:
PESTLE analysis: It is a strategic management tool which is utilised by business entities
for the purpose analysing external business environment to determine the forces which are
affecting organisation and its strategies. It is being used by Corporate Strategy manager of
Burberry. All the elements of it are discussed below in context of the company (Baker, 2014).
 Political: The factors such as political stability, integrity of politicians, laws and trade
barriers are the part of it. Burberry is operating in multiple nations and these forces are
influencing and affecting its strategies in negative manner because there is instability in
its operations due to variation in the policies of different countries.
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 Economic: The components such as trade policies, exchange rates, inflation, deflation
are economic factors which may affect companies in positive or negative manner. The
Corporate Strategy Manager in Burberry analyse all of them on regular basis because
due to them organisation and its strategies may get affected. For example, if the rate of
inflation or deflation fluctuates then it result in lower or higher purchasing power of
customers. By keeping detailed information of such situations the managers makes sure
that appropriate modifications are made in the strategies to increase demand of its
products.
 Social: Culture, demographics, beliefs and attitudes are considered as social factors
which should be focused by all the business entities for the purpose of executing
operations in systematic manner. As Burberry is operating business in multiple countries
therefore corporate strategy manager of it makes sure to take all the social factors in to
consideration. Ignorance of them may influence and impact strategies and the
organisation because new policies are required to be formed according to them to reduce
their negative impact (Cowley and Domb, 2012).
 Technological: The factors such as innovative techniques, technological enhancement
etc. are the part of this element of PESTLE analysis. In order to be the first choice of
customers Burberry use latest technologies to perform all its activities related to
advertising and promotions. Sudden changes in such components result in influence and
impact of them on organisation and its strategies because the corporate strategy manager
of the company will be required to find new ways to reach its clients.
 Legal: There are various laws, rules, regulations and policies which are imposed by
governmental bodies of different countries which are required to be followed by global
companies to execute operations in systematic manner. As Burberry is operating at
international level so it is very important for the company to comply with labour and
employment laws of the nations where it operates. Due to them, the enterprise and its
strategies gets influenced and impacted because if these are changes suddenly then it is
very difficult to make quick changes in organisational policies (Crandall, Parnell and
Spillan, 2013).
 Environmental: It covers the components such as climate change, CSR etc. In order to
carry out operational activities appropriately it is very important for companies such as
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Burberry so that a positive image in the market could be established. The company is
making a high contribution in its corporate social responsibility activities for the purpose
of executing operations appropriately. Environmental factors may influence and impact
the company and its strategies if any of its executional activities is affecting the
environment adversely.
M1 Critical analysis of macro environment to determine and inform strategic management
decisions
PESTLE analysis is a tool which is used by companies such as Burberry for the purpose
of analysing macro environment. With the help of it strategies management decisions could be
determined. Managers in the organisation pays attention towards the economic factors such as
inflation, deflation and exchange rates which guides them to take decisions for pricing. Market
analysis is also conducted by corporate strategy manager of organisation to be aware of
technological enhancement. With the help of it decisions regarding advertisement and
promotions are taken.
TASK 2
P2 Analysis of internal environment and capabilities of the organisation with the help of different
frameworks
All the forces such as culture, employees, events etc. organisation which may influence
the strategies are the part of internal environment. In order to formulate highly effective strategy
for business it is very important to analyse it as it can help to improve the performance. In
Burberry the Corporate Strategy Manager has used SWOT analysis to perform it.
SWOT analysis: It is a techniques which is utilised by companies to gather information
about different elements which are their strengths, weaknesses, opportunities and threats. All the
elements of it are analysed by Corporate Strategy Manager of Burberry and description of them
is as follows:
Strengths Weaknesses
 Brand image of Burberry is very high
because of good quality of its products
that helps it to enhance revenues
(SWOT analysis of Burberry, 2019).
 The prices of all the products of
Burberry is very high and its targets
only upper class customers.
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 The company is having global presence
that results in larger market share of it.
 Product line of the company is limited
which results in lower interest of
customers.
Opportunities Threats
 In order to more growth the company
can expand its product line that will
attract large number of customers.
 Burberry can launch a small product
range for middle class customers to
target them.
 Competition in the global market for
Burberry is very high and competitors
such as Prada, LVMH, Dior etc. are
affecting it.
 Taste and preferences of customers in
fashion changes with trends and these
are currently changing frequently which
may affect sales of products of
Burberry.
For all the organisations it is very important to determine their capabilities and resources
that can help to reach long term business goals (Eden and Ackermann, 2013). Corporate Strategy
Manager in Burberry uses VRIO analysis. All the elements of it are discussed below in context
of the company:
Resources Valuable Rare Inimitable Organised
Product line ✓ X X X
Advertisement ✓ ✓ X X
Brand image ✓ ✓ ✓ X
Global presence ✓ ✓ ✓ ✓
Valuable: The VRIO analysis of Burberry shows that there are various resources of it
which are valuable. These are product line, advertisement, global presence and brand image.
Reason behind their value is contribution of them in higher revenues and profits of the company.
Rare: One of the resource of Burberry is not rare which is product line reason for it is
limited. Advertisements, global presence and brand image are rare because it is very difficult for
all the companies to pay attention towards them and gain advantage from them.
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Inimitable: The efforts which are made by the company in advertisement are non
inimitable because most of the companies such as Prada, Armani etc. are using same techniques
for promotions. Global presence and brand image of Burberry are inimitable because both of
them could not be copied by other enterprises in the sector (Harrison and John, 2013).
Organised: Managers in Burberry are not able to organise the brand image appropriately
because it may get affected due to limited product lines. On the other hand, global presence is
organised systematically by corporate strategy manager of company because it helps the
organisation to be on the top of the industry.
M2 Critical evaluation of the internal environment to assess strengths and weaknesses of an
organisation's internal capabilities, structure and skill set
With the help of SWOT and VRIO analysis strengths and weaknesses of internal
capabilities, structure and skill set are determined by Corporate Strategy manager of Burberry.
These analysis are showing that company's global presence and brand image are strengths of it
and limited product line is weaknesses for it. In order to overcome it the management can pay
attention towards the expansion of it.
TASK 3
P3 Application of Porter's five forces model to evaluate competitive forces of the market sector
for an organisation
For all the organisations it is very important to evaluate all the competitive forces which
can help to formulated future strategies and decisions. Burberry is currently operating at global
level so it is very important for it analyse the level of competition within the industry. For this
purpose, Porter's Five Forces analysis could be used.
Porter's Five Force Model: This model was introduced by Michael Porter to help
organisations to determine their competitive position within the industry. There are five different
elements of it which are discussed below in context of Burberry:
 Threat of new entrants: In case of luxury brands the threat of new entrant is low as the
new firm require the accessibility of huge resources as well as capital to compete against
the well established brand which is Burberry. Along with that respective brand has gained
the trust of people after understanding their requirement and catering it effectively. So
this whole process took the years for company as well as customer to establish the strong
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relationship (Hitt, Ireland and Hoskisson, 2012). Thus, it is not easier for the new entrant
to conquer the customers or market of Burberry.
 Threat of substitutes: The substitution threat for Burberry company is moderate as the
company target to the high income group people who are comfortable paying high prices
and are less likely to switch. Although there are certain luxury brands like Zara that too
offer the quality product but relatively at less prices. Still, the company do not faces
much threat of substitution because it satisfy the status of prestigious customer.
 Industry rivalry: It refers to the competition in the industry in which companies operate
all the business activities (Jones, 2013). As there are various leading brand within the
fashion industry that make best possible effort to engaging the existing customer as well
as attract the new ones. This depict the pressure of competitive rivalry is high so
Burberry need to effective strategy and continuously modify its product as per the trend
in order to sustain its market share.
 Bargaining power of buyers: Burberry experiences moderate bargaining power of
customers as the company has already targetted the high income group people effectively
and made them loyal towards the brand (Burberry Group Plc Porter Five Forces
Analysis. 2019). So buyer are not in state to influence the prices of the commodities
offered by the Burberry.
 Bargaining power of suppliers: Burberry being the leading brand attract the vendors to
work with such big brand this led to low bargaining power of the supplier. The company
has formed the partnership with various supplier who provide quality material to the firm
which is unique fro instance Peru. Additionally, this is profitable for supplier top gain
profit by catering the demand of large audience by offering favourable material to the
company.
M3 Appropriate strategies to improve competitive edge and market position based on the
outcomes
For the purpose of determining competitive position of Burberry the management has
used Porter's five forces analysis which guides the managers to determine the level of
competition within the industry. As the competition for Burberry is very high so the company is
required to formulate effective strategies such as launching unique products in the market. The
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bargaining power of buyers and threat of substitute is moderate which could be decreased by
paying attention towards quality of products and making brand loyal clients.
TASK 4
P4 & M4 Application of rage of theories and production of strategic management plan
Strategic planning includes implementation of growth strategies so that it can benefit the
company. While looking for best suitable strategy for business execution Ansoff matrix could be
used as it guides managers to find option for growth of organisation. In order to devise strategic
planning Corporate Strategy Manager of Burberry used this model.
Ansoff matrix: It is considered as a framework which facilitate business entities to adopt
the best option which could help them to attain growth. There are four different elements of it
which are discussed below in context of Burberry:
 Market Penetration: This strategy provides an opportunity to the organisations to
achieve growth by selling more and more products in the existing markets. By adopting it
Burberry can promote its items in its current marketplace for the purpose of attracting the
prospects and increasing number of customers (Punt and et. al., 2016).
 Product development: Under this option of growth companies launch new product in
the existing market. With the help of it, Burberry will be able to increase revenues and
profits by offering a unique or modified product to the current customers.
 Market development: It guides organisations to offer their existing products in new
market to expand the business. It could be adopted by Burberry to increase the market
share and achieving the objective of expanding the business in different locations (Stark,
2015).
 Diversification: It is the last strategy of Ansoff matrix that guides companies to launch
new products in a new market. It is considered as the most riskiest option that requires
higher funding. It could be adopted by Burberry to attract new customers from a new
location with a brand new product.
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Illustration 1: Ansoff Matrix, 2019
(Source: Ansoff matrix, 2019)
Porter's Generic model is also a technique which could be used by companies such as
Burberry for the purpose of determining the growth strategy. All the four elements of it are
discussed below in context of Burberry:
 Cost leadership: This strategy guides companies to be the lowest cost producer in the
industry so that large number of customers could be attracted towards it. It could be
adopted by Burberry to increase its number of clients by becoming the lowest cost seller
in fashion industry (Rothaermel, 2017).
 Differentiation: This strategy of Porter's generic model guides organisations to launch
unique products in the industry which are different from others in the sector. It could be
adopted by Burberry to target new customers in the existing market.
 Cost focus: Under this strategy business entities try to become lower cost producers in a
small market area. By adopting it Burberry can set lower price for its products for a niche
market to become the market leader (Stead and Stead, 2014).
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 Differentiation focus: This strategy guides organisations to launch unique products in a
small market area so that responses of all the customers regarding the new item could be
determined. Burberry can select this option to check that the new product which will be
launched in the market will be able to attract customers or not.
From both the above described model Corporate Strategy Manager of Burberry should
focus on Ansoff Matrix and adopt the strategy of product development. This recommendation is
provided to the company because with the help of it organisation can attract more customers
from its existing market. The risk in this option is very low because the management within the
company is already aware of customer behaviour and market trends.
On the basis of above recommendation a strategic management plan for Burberry is
being formulated that covers objective, tactics and strategy for product development (Therivel
and Paridario, 2013). It helps staff members to determine the details about future goals and
targets of organisation and them. All the elements of it are as follows:
Objective: All the objectives of strategic management plan of Burberry are as follows:
 Burberry is working on product development for the purpose of attaining growth and
increasing profits by 5% in upcoming two years.
 Organisation is willing to increase profits and sales by launching new product in its
existing market.
Strategies: While launching a new product in the market it is very important for
companies to formulate effective strategies so that the goals could be achieved successfully. The
strategies focused by corporate strategy manager are as follows:
 Market research: In order to launch a new product in the market it is very important for
management to conduct a research so that information regarding latest trends could be
collected. With the help of collected data new product could be developed properly.
 Promotional activities: When a new item is launched in the market then it is very
important for organisations to promote it to aware large number of customers about it.
Burberry is also required to perform promotional activities to attract large number of
customers towards the company (Therivel, 2012).
Tactics: These are set of essential elements which require higher attention of managers.
Some of them which are highly focused by Burberry are as follows:
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 Focus upon technology: In order to launch new product in the market the corporate
strategy manager of Burberry has decided that latest technology will be focused to make
the items attractive. It will help to achieve the objective of attainment of growth.
 Gathering funds: It is very important for Burberry to arrange finance for new product
which will be launched in its existing market (Ward, K., 2012). There are various sources
of funds which could be selected by it are bank loan, personal capital of owner etc.
D1 Critique and interpretation of information applying environmental and competitive
environmental analysis to produce set of valid strategic directions, objectives etc.
When an organisation is willing to acquire growth then it is very important for it to use
different techniques such as PESTLE, SWOT, Porter's five forces, VRIO etc. All of them can
help to find the best way to execute the operational activities. By using all of them a strategic
management plan is being formed by Corporate Strategy Manager of Burberry. The main
objectives of it are attaining growth and increasing profits. The strategies for it are market
research and promotions. Tactics which are focused by the company are gathering funds and
technology.
CONCLUSION
The above report concludes that strategic management plan is a document which covers
detailed information about the strategies which are formulated by top executives for the purpose
of managing operations in systematic manner. While planning for macro and internal analysis
different tools and techniques could be utilised by corporate strategy managers of companies.
These are PESTLE, SWOT and VRIO analysis. While planning for determination of competitive
position of an enterprise Porter's Five Forces Model could be applied by management. In order to
generate a plan for long term theories such as Ansoff's matrix could be used which helps to find
strategic direction for business.
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REFERENCES
Books and journals:
Ansoff, H. I. and et. al., 2018. Implanting strategic management. Springer.
Baker, M. J., 2014. Marketing strategy and management. Macmillan International Higher
Education.
Cowley, M. and Domb, E., 2012. Beyond strategic vision. Routledge.
Crandall, W. R., Parnell, J. A. and Spillan, J. E., 2013. Crisis management: Leading in the new
strategy landscape. Sage Publications.
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management.
Sage.
Harrison, J. S. and John, C. H. S., 2013. Foundations in strategic management. Cengage
Learning.
Hitt, M. A., Ireland, R. D. and Hoskisson, R. E., 2012. Strategic management cases:
competitiveness and globalization. Cengage Learning.
Jones, C. E., 2013. Strategic environmental assessment and land use planning: an international
evaluation. Earthscan.
Punt, A. E. and et. al., 2016. Management strategy evaluation: best practices. Fish and Fisheries.
17(2). pp.303-334.
Rothaermel, F. T., 2017. Strategic management. New York, NY: McGraw-Hill Education.
Stark, J., 2015. Product lifecycle management. In Product lifecycle management (Volume 1) (pp.
1-29). Springer, Cham.
Stead, J. G. and Stead, W. E., 2014. Sustainable strategic management. Routledge.
Therivel, R. and Paridario, M. R., 2013. The practice of strategic environmental assessment.
Routledge.
Therivel, R., 2012. Strategic environmental assessment in action. Routledge.
Ward, K., 2012. Strategic management accounting. Routledge.
Online
SWOT analysis of Burberry. 2019. [Online]. Available through:
<https://www.swotandpestle.com/burberry-group/>
Burberry Group Plc Porter Five Forces Analysis. 2019. [Online]. Available through:
<https://www.essay48.com/term-paper/8823-Burberry-Group-Plc-Porter-Five-Forces>
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