Burberry's International Business: PESTLE Analysis & Governance

This report provides a comprehensive analysis of Burberry's international business strategy, focusing on its market-leading position, brand strength, and growth in emerging markets. It examines the company's organizational structure, including the roles of the Board Committee and key executiv...Read More

Running Head: INTERNATIONAL BUSINESS 0
International Business
(Student Name)
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Table of Contents
Introduction......................................................................................................................................2
Background of the company............................................................................................................2
Organizational structure and governance of company....................................................................2
PESTLE Analysis............................................................................................................................4
Conclusion and Recommendation...................................................................................................6
References........................................................................................................................................8

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Introduction
The strategy of group is marked by the position of leading market that are combined with strong
franchise in the established countries along with the usage of the emerging countries platform to
drive the earnings growth as well as volumes. The company also focuses on meeting the ever
changing consumer demands through the continuous innovation with expanding the product
portfolio that directly operated store network, selective wholesale distribution channels as well as
enhance the operational capabilities that result in the healthy growth in the recent years
(Cameron and Green, 2015). One of the leading companies Burberry has positioned its brand as
a functional luxury in the mind of their consumers. Burberry maintains a product line with a
great width as well as depth that consist of huge variety of products in effective manner. Such
products fallen into two main categories which include fashion or continuity. The company has
grown at greater level in the international market. However, the market is unpredictable that
create a risk for the company. The market changes with period of time that may affect the overall
performance of the company at greater level (Noe et al., 2017).
In the following part there will be detailed discussion on management structure of the company
and the level of impact of external forces on the overall business of the company. It would help
them to analyze the risk that occurred due to fluctuation in the market and prospective measures
can be adopted by them in effective and efficient manner.
Background of the company
Burberry Plc. is one of the international companies that were established in Basingstoke in the
year 1856 by Thomas Burberry. It is international leading brand for both women as well as men.

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Burberry Group PLC operates as manufacturing, holding company that design as well as
distribute the apparels with accessories under the brand Burberry. The company has established
their first foreign outlet in Paris in the year 1910 as well as the company has soon had retail
established chains in South America as well as United States (Straker and Wrigley, C, 2016).
They have first shipment of their raincoats to Japan in the year 1915. It was the World War I;
however such circumstances brought widespread acclamation as well as fame to the Burberry.
They were considered as first worn by high-ranking generals during the turn of the centaur Boer
War in South Africa, the coat of Burberry soon was accepted as standard issue for all the British
officers. In the year 2000, the company operated own stores and their products were also found
in the department as well as specialty stores round the world. In the year 1999, the company
launched the Prorsum designer collection as a part of their efforts to reinvent the luxurious brand
of Burberry (Robinson and Hsieh, 2016). The Company has spread their roots in great number of
countries with different languages. The reputation of the company was improved through the
development of the Burberry of “gabardine”- a material was resistant to tearing that was
weatherproof but was also breathable (Rome, 2018).
Organizational structure and governance of company

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Role of Board Committee
The Board is supported in their activities by a number of commit7tee which include Audit
committee, Nomination Committee as well as Remuneration Committee. All the non-executive
directors are the members of each of the main committee of the Board. The board has a view that
such things are essential as it ensure the appropriate connection between the work of the
Committee and the Board as a whole. The committee can also involve third-party consultants as
well as independent professional advisers that can call upon more resources of the Group to
guide them in allocating their respective responsibilities (Cooper, Miller and Merrilees, 2015).
Number of Members

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With the help of the organizational chart for the company, it can be analyze the board of the
company currently consist of 12 members which include Chairman, the Chief Creative as well as
Chief Executive, the Chief Operating Officers, the Chief Financial Officers and eight
independents no-executive director.
Detailed Explanation
The Board of directors as well as their governance are explained in below points as they are:
 Sir John Peace who is the chairman of the company is majorly responsible for leading as
well as managing the business of board that also assures its effectiveness. He became the
Chairman of the Board in the year 2002 of June as well as he is also the Chairman of the
nomination Committee. He is the Chairman of Standards Chartered PLC as well as
Experian plc. He is responsible for the leadership of the Board as well as ensuring their
effectiveness on all aspects of their roles in effective and efficient manner. He promotes
high standards of the corporate governance within the group that are taking account of
the corporate governance code. He set the agenda for the Board discussion as well as
ensures that the board receives the accurate timely as well as clear information. The
chairman of the company promoted the culture of the openness as well as trust that
allows for the debates with great challenges of the executive directors. The Chairman
also coordinate with the Chief Creative as well as Chief Executive Officer in setting the
agenda of Board as well as ensuring the actions that agreed by the Board are effectively
implemented. The Chairman is also the responsible to the shareholders for the
performance of the company as well as has regular connection with the main institutional
shareholders of the company (Pedersen, Gwozdz and Hvass, 2018).

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 While Philip Bowman (Senior Independent Director) support the chairman in their role
as well as guide non-executive directors in the omission of the chairman. The senior
independent directors are also available for the company in additional points of contact
for the investors in the company.
 Christopher Bailey (chief executive officer) is also responsible for the management of
business, develop the directions of group that are strategically consideration. They take
the approval by the Board as well as implement the agreed strategies. They are assisting
by the members of his senior leadership team who meet regularly (Burt, Johansson and
Dawson, 2017).
 Moreover, Catherine Sukmonowski (Secretary) supports the chairman for delivering the
agenda of corporate governance.
 Lastly, board reserves relatively small as well as insure the linkage between the work
committee with board. Committees can call upon the other resources of groups to
support for rehearse respective responsibilities.
Role of the Board
It is the responsibility of the Board to support the management in their strategies aims to enable
the company to continue to perform in more effective manner as well as sustainably for
shareholders with wider stakeholders. The board is majorly responsible for promoting the long-
term success for the group. It leads as well as provides the direction by setting the strategy as
well as overseeing their implementation by the management. The board is also majorly
responsible for the oversight of the system related to group of governance, their internal control
as well as risk management. The Board is majorly responsible for promoting the long-term
success of the Group. The Board leads as well as provides the direction for the company by

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setting the goals as well as strategies that are overseeing its implementation by the management.
The essential decisions as well as matters have been retaining for approval by Board
(Burghausen and Balmer, 2015).
PESTLE Analysis
The PESTLE analysis of Burberry Group Plc. is one of the strategic tools to analyze the
condition of the macro environment of the organization. The PESTLE stands for Political,
Economic, Social, Technological, Environmental as well as legal factors that affected the macro
environment of the company at greater level. The company operates in a dynamic environment
where it is majorly influenced by the enhancement in the regulatory framework for the
environmental factors, enhancement in the environmental activism among the consumers,
spending behavior of consumers, government decisions, collective social trends, evolving legal
system as well as technological changes (Sammut‐Bonnici and Galea, 2015).
Political Analysis
The Political factors play a vital role in determining the factors that can affect the company on
long term profitability in a certain country or the market. Burberry group Plc. is managing their
business in Personal as well as Households products in more than dozens of countries as well as
expose itself to different type of the political environment as well as risk of political system. The
company is not only operating in the London but throughout the world. Different countries that
the company operated need the organization to abide by their domestic rules with different laws
that may be unfavorable for the company. Some of the countries impose high tax rates on the
foreigners to promote their domestic production. The high rate can enhance the operating cost to
the company. The political instability disrupts the stores as well as supply chain. For example

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United Kingdom has revised the tax rates from 45% to 50% that affect the purchasing power of
the consumers that directly affect the sales of the company at greater level. Moreover, the
company also faced the steep competition due to the cheap copies that are produced locally
(Robinson and Hsieh, 2016).
Economical Factor
The Economic downturn affects from the level of spending money by the individual. When there
is the downturn of the economic, the consumers prefer to purchase the products that are
reasonable in process and able to meet the basic requirement that to purchase a luxury which
many people can live without. Therefore, Burberry is affected by the local as well as
international competitive brands. The inflation rate of UK increased from 3.19% in the year 2006
to 4.29% in the year 2007. Therefore, the downwards trend continued in the first three month in
the year of 2009. It affects the purchasing power of the consumers at greater level. Moreover, the
unemployment ate also jump to 7.1% by the end of the year 2009 that affect the spending level
of the consumers as consumers mostly prefer to buy basic products to satisfy their needs that
affected the overall sale of the company at greater level (Escobar, 2016).
Social Factors
The culture of the society as well as the way of doing the things affected the culture of a
company in such uncertain environment. Shared attitude with beliefs of the population play a
great role in how the company would able to understand the need so the consumers of given
market. The target consumers of Burberry have distinct cultures a swell as lifestyles as Weston
affirms. For instance, the dress code of the consumers varies according to their culture.
Therefore, different community prefers different products. Some of the people prefer reserved

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dressing and other prefer skimpy clothes therefore; the collection of the company greatly
depends on the changing takes and preference with different culture.
Technological Factors
The change in the technological factors affected the overall performance of the company at
greater level. It is fast disrupting various industries across the board. In the UK it is estimated
that over $80 billion was made by the broadcasting as well as telecoms networks with services in
the year 2006. It represent that the country has upgraded towards the technology at a faster pace
that give a new platform to the company to target their consumers in more effective manner.
Therefore, the company issues the latest technology in advertising their products to reach out to
their targeted consumers in more effective as well as efficient manner (Roberts, D.L. and Piller,
2016).
Environmental Factors
Different market has different environmental norms as well as standards that can affect the
profitability of the company in such market. Even within the country often the states can have
different environmental laws with liability laws. Burberry is strategically located as well as can
avail the products to their targeted consumers easily. The company needs to manufacture their
products according to the norms and standards of the country that has been set by them. in UK,
the government has taken the steps towards sustainable development since the year 1999. They
have focused on the ecological, economic as well as social development of the EU that forces the
company to set their standards accordingly. It enhanced the overall cost to the company (Medina
and Coelho, 2016).

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Legal Factor
To ensure the success, Burberry needs to abide by the legal laws of the countries within which
the company operates their business. The favorable legal laws have a positive impact on the
performance of the company whereas the unfavorable regulations van compromise the
profitability of the company. The main law that affects the company is labor and employment.
According to the labor law of UK, the maximum working week is 8 hours in seven days with a
minimum rest of 11 hours in each 24 hours a period. Therefore, Burberry needs to manage the
working hours of their employees accordingly (Olsanova, Cook and Zlatic, 2018).
Conclusion and Recommendation
From the above analysis it can be concluded that management of the company play a vital role in
the growth as well as success of the company. One of the leading companies Burberry has
expanded their business in international market. The Chairman of the company led the activities
of the company in effective manner. Other executive as well as subordinates supported the
Chairman in running the business and taking important decision in effective and efficient
manner. However, the market is full of uncertainty that forces the company to manage their
business accordingly. The macro environment greatly influences the overall performance of
Burberry. The instability in the political environment and increase in the tax rate affect the cost
of the company. Every country has different political conditions that need to be managed by the
company. Moreover, the increase in the rate of inflation decreases the spending power of the
consumers that directly affect the sale of the company at greater level. Every country has
different environmental standards and norms that also influenced the overall performance of the
company. Therefore, it is highly recommended that the company should focus on the fluctuation

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in the market and take the steps accordingly to maintain their growth and success in the
international market in effective and efficient manner.

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References
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marketing perspective. European Journal of Marketing, 49(1/2), pp.22-61.
Burt, S., Johansson, U. and Dawson, J. (2017) Dissecting embeddedness in international
retailing. Journal of Economic Geography, 17(3), pp.685-707.
Cameron, E. and Green, M. (2015) Making sense of change management: A complete guide to
the models, tools and techniques of organizational change. New York: Kogan Page Publishers.
Cooper, H., Miller, D. and Merrilees, B. (2015) Restoring luxury corporate heritage brands:
From crisis to ascendency. Journal of Brand Management, 22(5), pp.448-466.
Escobar, A. (2016) The impact of the digital revolution in the development of market and
communication strategies for the luxury sector (fashion luxury). Central European Business
Review, 5(2), p.17.
Medina, I.G. and Coelho, P.M. (2016) How Culture has an Impact upon Product/Brand and
Communication Decisions in the Global Environment. Revista EducaOnline, 10(1), pp.95-103.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2017) Human resource management:
Gaining a competitive advantage. New York: McGraw-Hill Education.
Olsanova, K., Cook, G. and Zlatic, M. (2018) INFLUENCE OF LUXURY
COMPANIES'CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES ON CONSUMER
PURCHASE INTENTION: DEVELOPMENT OF A THEORETICAL FRAMEWORK. Central
European Business Review, 7(3).

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Pedersen, E.R.G., Gwozdz, W. and Hvass, K.K. (2018) Exploring the relationship between
business model innovation, corporate sustainability, and organisational values within the fashion
industry. Journal of Business Ethics, 149(2), pp.267-284.
Roberts, D.L. and Piller, F.T. (2016) Finding the right role for social media in innovation. MIT
Sloan Management Review, 57(3), p.41.
Robinson, P.K. and Hsieh, L. (2016) Reshoring: a strategic renewal of luxury clothing supply
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Rome, A. (2018) Fashion Forward? Reflections on the Environmental History of
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Sammut‐Bonnici, T. and Galea, D. (2015) PEST analysis. Wiley Encyclopedia of management,
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