Burberry's Competitive Advantage: A Marketing Mix Analysis

Desklib provides past papers and solved assignments. This report analyzes Burberry's competitive advantage.

EXTENDED BUSINESS PROJECT
Page | 1

Table of Contents
INTRODUCTION............................................................................................................................. 3
OVERVIEW OF COMPANY (BURBERRY)..........................................................................................4
COMPETITIVE ADVANTAGE............................................................................................................6
SWOT ANALYSIS OF BURBERRY......................................................................................................9
MARKETING MIX STRATEGIES FOR BURBERRY TO GAIN COMPETITIVE ADVANTAGE IN THE
MARKET....................................................................................................................................... 11
RECOMMENDATIONS AND CONCLUSION....................................................................................14
REFERENCES.................................................................................................................................15
Page | 2

INTRODUCTION
In this report, we will be discussing the different factors that have been undertaken to analyze
the competitive advantage of the company. The report will be prepared by examining the
positioning of the famous company Burberry that will examine its functional areas that are
responsible for maintaining the competitive advantage in the market. Burberry will be focusing
on the human resource department and marketing department to gain competitiveness in the
area. The company will be using Porter's five force analysis and SWOT analysis to recognize the
various variations in the market and this analysis will help the company in formulating
strategies for gaining competitive advantage.
In the next section of the report, the area of marketing mix strategies or human resource
management will be used which is relevant to the market changes. At last various
recommendations will be provided to the company to gain a competitive advantage in the
market and to give strong competition to the other famous brands. In the process of gaining
competitive advantage, the company will also be able to satisfy their customers and will
achieve a profit margin to attain success in the long run.
Page | 3

OVERVIEW OF COMPANY (BURBERRY)
Burberry is a British company which deals in the luxurious fashion accessories; the company
was established in the year 1856 and it was founded by Thomas Burberry. The company offers
the range of products such as fashion accessories, clothing, the range of cosmetics and
perfumes. The company has its headquarters in London, the UK and the area to that company
serves is worldwide (Weston, 2016).
Current situation of the company is that in the year 2018 company has decided to destroy all
the item that was lying unsold in the stores because the company do not want to sell those
products at a cheaper price because it could have affected the brand name of the company
(Ryding et al., 2016).
FIGURE 1: BURBERRY FASHION BRAND
[SOURCE: RYDING ET AL., 2016]
Page | 4

However many other people and customer's criticized the decision of destroying clothes and
other unsold items but the company has commented that they are using the energy by
destroying items and making it eco-friendly (Ryding et al., 2016).
Burberry's competitive positioning in the market is sustainable in the long run as the company
provides the vast range of products and also the target market of the company are the
exclusive consumers and people those who only prefer luxurious products (Ryding et al., 2016).
The various competitors of brand Burberry are Polo, Gucci, Coach Etc., thus these brands also
deal in the fashion clothing and accessories products. Thus Burberry is planning to analyze the
market conditions and scenario deeply and will be to achieve a competitive advantage in the
long run by using different strategies.
Page | 5

COMPETITIVE ADVANTAGE
The competitive advantage can be defined as the position in which company try to focus on
providing extra value to the customers by many ways so that they can fight with the other
competitions in the market (Namada, 2018). In the strategy of competitive advantage, the
company has to demonstrate some special or extraordinary features of their products to the
customers that will highlight that company different from the other companies in the market
(Namada, 2018). The company must also be able to communicate their effectiveness to the
target market and thus in this way Burberry is also trying to compete with its competitors to
gain a competitive advantage (Namada, 2018).
Porter’s five force analysis will be used here in the report to determine the profitability and
sustainability of the company in the long run.
FIGURE 2: PORTER'S FIVE FORCE ANALYSIS
[SOURCE: THIND, 2017 ]
Page | 6

Page | 7

COMPETITIVE RIVALRY
Burberry has its unique position in the market but despite that, the company has its many
competitors and thus to compete with those companies and to gain competitive advantage
Burberry has formulated a range of strategies. The various competitors of Burberry are Gucci,
Coach etc. in the context of coach it has a lower price of its products but other competitors like
Armani, Gucci has same pricing strategy as Burberry (Abalkhail, 2019). So Burberry has to focus
on these areas to satisfy their customers.to cope up with the problem and to respond to the
other competitors I the market, Burberry has adop0ted the strategy of continuous fashion, in
which company will focus on improving their product collection by keeping in mind the
collection of other famous brands (Thind, 2017). Also, Burberry has decided to offer product5s
in the different in various lines and thus it allows all type of customer to purchase their
products. Burberry has products for elite customers as well as for customers who have less
purchasing power (Abalkhail, 2019).
BARGAINING POWER OF CUSTOMER’S
The bargaining power of the customers is lower minimum because customers always seek to
higher quality by paying the minimum amount to the marketer. Thus this is creating the
problem for the company (Abalkhail, 2019). To increase their customer base Burberry can focus
on introducing new products range of products that will not allow customers to ask for
frequent discounts and offers. Thus this will help Burberry to create a strong customer base for
future growth.
BARGAINING POWER OF SUPPLIER’S
Bargaining power of suppliers in case of Burberry is low because company depends on
suppliers for raw materials and dominating nature of suppliers sometimes can lead to
minimizing the profit and thus this problem of the company can be solved by much ways
(Abalkhail, 2019). Burberry can choose suppliers whose business will be dependent on
Burberry’s purchase of raw materials as in the case of Nike and Wal-Mart has adopted, this will
help the company to respond to the problem of bargaining power. Burberry can also choose to
Page | 8

maintain a connection with many numbers of suppliers that is by creating a vast supply chain
(Thind, 2017).
THREAT OF NEW ENTRANTS
There is a threat of new entrants in the market because every new entrant in the fashion
market will bring new designs and innovations and thus that will attract new customers. New
entrants can also offer their unique products at lower prices and that will create a problem for
Burberry (Abalkhail, 2019). To tackle the problem of new entrants, Burberry can focus on
developing a new product range that will attract new customers and also it will give old
customers a reason to stick to the brand. Burberry also has the option of bringing economies of
scale to the company that will support in minimizing per unit cost of products. In this manner,
the company can fight with the new entrants in the competitive market (Abalkhail, 2019).
THREAT OF SUBSTITUTE PRODUCTS
There is a threat of substitute products in the market and that can create competition for the
existing product by satisfying customers in different ways (Thind, 2017). To respond to the entry
of substitute products in the market, Burberry has to focus on providing better services along
with providing standard products. The company also need to analyze customer's switching cost
and Burberry can also focus on identifying basic customer's needs rather than focusing on what
buying process of the customers (Abalkhail, 2019).
Page | 9

SWOT ANALYSIS OF BURBERRY
FIGURE 3: SWOT ANALYSIS OF BURBERRY
[SOURCE: PHADERMROD ET AL., 2019]
A SWOT analysis will help Burberry to analyze the current market situation and will help in
creating awareness of the different opportunities available in the market that can support
company to gain competitive advantage (Phadermrod et al., 2019).
Page | 10

STRENGTHS WEAKNESSES
 Burberry is a very famous and strong
brand in the UK for offering fashion
products to customers
 Burberry has worthy marketing and
advertising strategies (Phadermrod et
al., 2019)
 Higher pricing system helps in to
maintain their standards and
luxuriousness and customer's desires
increases
 The network channel is very vast with
a huge range of products
(Phadermrod et al., 2019)
 Due to its luxurious brand image,
products are not accessible to the
lower class people
 The confidence of dealers of the
company are worn (Phadermrod et al.,
2019)
OPPORTUNITIES THREATS
 Burberry has the opportunity to grow
or expand the market at the global
platform (Phadermrod et al., 2019)
 Burberry can go for more
endorsements by celebrities for
promoting their products and
attracting more customers
 Burberry can serve or can offer more
products to a wider range of age
groups
 Burberry can also go to more cities for
hosting shows and can also sponsor
many more events for promotion and
 Minimum number of stores in small
cities
 Increasing tough competition from
other established brands (Phadermrod
et al., 2019)
 Higher bargaining power of the
customers.
Page | 11

advertising (Phadermrod et al., 2019)
MARKETING MIX STRATEGIES FOR BURBERRY TO GAIN COMPETITIVE
ADVANTAGE IN THE MARKET
FIGURE 4: MARKETING MIX 7P'S
[SOURCE: MALLIK AND FARHAN, 2018]
The different factors of the marketing mix are described herein context with Burberry that
will help in the long run to gain a competitive advantage for the growth of the company.
Product
The product line of Burberry includes many products that offer customers luxury and high
quality and standards. The different range of products includes menswear, women’s wear,
children clothing, other cosmetics etc. Burberry tries to satisfy its customers by serving them
with luxurious products and with that the company's products are not available frequently and
easily (JAIN, 2017). Thus this makes them unique in the market and helps to gain competitive
advantage.
Page | 12