Burberry's Strategic Management: An In-Depth Analysis of Key Factors

This report provides a comprehensive strategic management analysis of Burberry. It begins with an introduction to strategic management and its importance, followed by an overview of Burberry's mission, vision, and objectives. The main body delves into internal analysis using the VRIO framework to assess the value, rarity, imitability, and organization of Burberry's resources. External factors are examined through PESTLE analysis, evaluating the political, economic, social, technological, legal, and environmental influences on the company. Furthermore, the report applies Porter's Five Forces to assess the competitive landscape. Finally, the report reviews Burberry's overall strategy based on the analyses, concluding with a summary of key findings and recommendations for strategic improvements. The report emphasizes Burberry's competitive advantages and potential areas for growth within the luxury fashion market.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1: Mission, Vision and objective of Burberry-............................................................................3
2: VRIO Analysis.........................................................................................................................4
3: External analysis .....................................................................................................................6
4: Porter's Five Forces..................................................................................................................8
5: Review of Burberry's strategy ................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCE.................................................................................................................................11

INTRODUCTION
Strategy keyword is important for any organization. It helps company to manage and
maintain their position and give competition to competitors. Strategic management is used to set
an objective for an organization to improve its performance. It is play important role in
organization help company to achieve its goals and objective. This report will discuss Burberry
Strategic management. Burberry is founded in 1856 by Thomas Burberry (Bannerman, 2018). It
is famous outdoor wear brand. It focused on fashion wear accessories. Burberry distributes its
product in different categories such as women's wear, men's wear and kids wear. This report
evaluate Burberry vision, mission and objectives, it will also explain its internal factor using
VRIO analysis and using its framework. This report also evaluate its external factors using
PESTLE analysis and it will also critically evaluate competitiveness of Burberry using Porter's
Five forces. In the end of the report it will review Burberry strategy with the help of above
discussed analysis.
MAIN BODY
1: Mission, Vision and objective of Burberry-
Organizational strategy of Burberry-
The operational strategy for Burberry is to increase its customer count through which it can
achieve high profit margin and can also achieve a efficient competitive edge through which it
can make sure that it is able to maintain its sustainability in the changing market trends.
Company also tend to develop inter-organizational partnership through which it can
collaboratively develop new and creative products by which it can provide other diversified
buying options to customers at low pricing (Silvano, 2020). With that through this collaboration
company can also implement customer sharing in which customers are provided special
advantageous discounts on the basis of their engagement with the organization by which it can
make sure that sales are increased. With that the organizational strategy for Burberry can be to
implement cost reduction offers through which it can motivate customers to middle class to
increase their engagement with the organization because of high brand value through this
Burberry can implement customer diversity at its work place and can increase chances of goal
achievement (Sah and Dadwal, 2018). Burberry can also increase its advertisement through
social media marketing because it is cost-efficient and also at the same time highly effective

because customers are showing high engagement in social media activities through which it can
make sure that high brand awareness is achieved through which sales can be increased.
Mission Statement- The mission statement of Burberry is to maintain its vitality and integrity
for their brands. Also, at the same time continue to develop the business in context with the ever
evolving markets trends and customer requirements (Find Any Answer, 2020).
Vision Statement- The organizational vision of Burberry is to establish Burberry's position
firmly in luxury fashion. Through shaping organizations positioning in most enduring and
rewarding segments of the market, Burberry tends to drive sustainable growth and also higher
margin with increasing time, while maintaining to deliver attractive returns (Daalderop, 2021).
Objectives-
1. The objective strategy for Burberry is to increase its geographic reach in other countries
by which it can increase its customer count through which it can improve its chances of
goal achievement.
2. Implement creative cost reduction offers through which customer diversity can be
achieved by which high profit margin can be achieved.
3. To implement technological advancements at the work area by which work productivity
can be increased and also organizational expenditures can also be minimized for the
development of new products.
2: VRIO Analysis
VRIO stands for valuable, rare, imitable and organization. It helps Burberry to look at its
internal resources one by one to give competition and also help them to evaluate how they can
use these resources in competitive advantages. It also helps company to mention each stage
where resources can improve so that they increase their performance for higher competitive
advantages. VRIO give idea to Burberry which is valuable for organization. Ii also include
supply chain effectiveness, technology and other innovative factors which help company to offer
good resource these resources help company to attract more customers.
Valuable: Burberry financial resources are extremely valuable and these resource help in
external factors and opportunities this will help to overcome external threats. Its local food
product is also valuable resource for Burberry to make differentiation and for competitive
advantages. Its employees are also valuable because highly trained employees help to grab

customer attention and create positive environment. Burberry patents and network distribution
are also valuable resource for the company it helps to reach more customer and expand their
business in new areas (Wheelen, and et.al., 2017). Its cost structure, research and development
are not valuable resources because its cost structure affect its overall profit and research and
development costing and expense are more than their results so these resources affect overall
growth of the company.
Rare: Its few valuable resource such as financial, employees, patents and distribution
networks are rare and help Burberry in high competitive advantages. Financial resource of the
company are rare because these financial resources are used by rarely and few organizations in
industry (Yudiono, Wilopo, and Iqbal, 2019). Its employees resources are rare because its
employees are knowledgable and skilful and help in company growth. In other firms employees
are not hat much skilful that's why Burberry has advantage to crease positive and effective work
environment in industry. Its network distribution and patent are also rare because patents and not
easily available to competitors and it also differentiates Burberry between its competitors in
industry and distribution network is rare because it required high investment and time to
management distribution network and in this Burberry management team is highly trained. Its
local food products are valuable recourse but it is not rare because it is easily available in market
and its competitors can easily used these resources same as Burberry is using.
Imitable: Few valuable resource are very costly and imitable such as Financial resource,
patents and distribution resources. Financial resource are imitated because it is changed by over
the year and also it depends on company profits. In Burberry patents are costly because its very
difficult to register some product as a patents and it also not lawfully allowed to copy patent
products. Distribution network in Burberry company is also highly costly to copy by competitors
in the industry because it developed by Burberry employees who are highly knowledgable and
skilful and it takes several years to develop and create (Olteanu, 2020). To imitate distribution
network same as Burberry competitors wants to pay particular amount. Local food product and
employee resources of Burberry are not costly to imitate or copy because competitors can easily
copy these resources by paying moderate and significant amount.
Organization: Burberry financial resource and distribution network are well organized
but it patents recourse is not well organized. Financial recourse and network distribution is
organized because Burberry use these resources strategically and invest their time and money

according to that, they also use its network distribution resource to attract and find more
customers. It also uses these resources to overcome threats and these resources also help
company to give competitive advantages. Patents are not well organized in company because in
this is not used by to fulfil its overall objective. This resource also have expired date so company
try to use patent recourse before they expire. Employees resource and local food product
resources are also well organized in Burberry.
By VRIO analysis of Burberry it identified that financial and distribution network resources are
constantly helped in competitive advantages, Patents resources are unused competitive adavatge
which will help company to expand their business in new market.
VRIO Framework for Burberry
Resources Valuable Rare Imitable Organization
Financial Yes Yes Yes Yes
Distribution
Network
Yes Yes Yes Yes
Patents Yes Yes Yes No
Employees Yes Yes No Yes
Local food
products
Yes No No Yes
3: External analysis
It shows the external environment and factors which may affect the working, operation
and profitability of the company (Perera, 2017). Factors includes political, legal, technological,
economical, social environmental which put negative impact on Burberry. Pestle analysis is a
tool which identifies the external factors who harms the profit of Burberry, but sometimes these
factors contains positive aspects as well.
Political factor
Burberry sells its product all over the world so political changes is very important for the
business of Burberry, in past few months many governments of different countries has increased
the tax rate on import – export which directly impact the profit margin of the company. Apart
from this, due the covid, the stores of Burberry in several countries including London has to

remain shut for months as the government announce lock-down through which the profit margin
of the company fall down.
Economic factors
Economic changes in the price and value of currency impacts the prices of the products
which Burberry offering to various countries. Burberry can't compromise with the quality of the
product, if the customer don't get high quality in product they may switch to other. Tourism also
affected the profit of the company as mostly the tourist who come to London often buy the
products of Burberry.
Social factors
As it is luxury brand, earlier it was targeting to upper class and high net worth people
only but now the company found that middle class customers also have potential to buy their
product, to target such customers Burberry has launched affordable and mid range of product to
satisfy the need of middle age group people (Düerkop, 2017). As different communities and
people different products like- some want reserved dresses, some want shabby and stringy
products, by analysing the needs Burberry is trying their best.
Technological factors
Burberry stays up to date with the changing market trend. Company know the power of
social media and remain active their, they upload various products and offers which they about to
offer to its customer. Burberry is very much concerned about the online shopping, for that it has
updated all the product on their website with entire information whether it is price, quantity, etc.
so the customer can easily purchase. Apart from this company has tie -up with various e-
commerce company so the sell and revenue can get increased.
Legal factor
Being global brand it has to follow the rules, regulations and standards of different
countries. They have to follow the labour laws, employee's safety and hazardous laws to serve
their product in that particular country. If the company missed following any of the rules, it may
face legal issues and difficulties which is not good for the brand image and goodwill of Burberry.
Rules are also different in different countries like in US the laws are very strict and fines are
also high as compared to Asian countries.
Environmental factors

To protect the environment, company is doing all the possible things like- they are trying
to reduce the carbon emission and green house gases (Shtal, 2018). Apart from this, the brand is
focusing on using renewable energy, except this company is trying to avoid all the things which
harms the environment. It is trying to avoid use of plastic in their packaging and labelling instead
of plastic they want to use recycled paper to protect the environment.
4: Porter's Five Forces
Following is the porter five force analysis of Burberry.
Threat of new entrance (High)-
The threat of new entrance is high because Burberry provide high quality products at high price
because of which if a new entry arises then it will decrease organizational sales and will make
negative impact on the economic growth (Abalkhail, 2019). With that the new entrance will also
decrease the customers count of the organization due to which company's sustainability in the
market will be affected. Thus, Burberry must utilize its high brand image and develop strong
relationship with the customers and suppliers in such a way that it can minimize the negative
impact of new entrance.
Bargaining power of customer (Low)-
Bargaining power of customers is low because company tends to new luxury clothing products to
customers because of which customers are assured that they are having high quality product due
to high prices because of which they are assures that they are having best in class products
(Abalkhail, 2019). Thus, this assurance of high quality motivates customers to pay high prices
and because of which the bargaining power of customers is low and thus customer loyalty is also
increased.
Bargaining power of suppliers (Moderate)-
Burberry provides luxury clothing options to its customers all across the globe and because of
which company has to make sure that it is able to provide value of money products to its
customers. Thus, in order to achieve this company has to make sure that it is able to achieve best
in class high quality raw materials for the development of products. Due to this company has to
develop effective relationship with the suppliers by which it can make sure that it is achieving
raw materials at low pricing and thus achieving high profit margin.
Threat of Substitute (High)-

Burberry tends to provide new luxury clothing products to its customers of higher class at
premium pricing through this action company tends make sure that it is able to fulfil customer's
requirements of luxury clothing and maintain customer's engagement with the organization
(Blas, 2018). Through this it can make sure that it is able to reduce the chances of brand
switching from the customers side and because of which it has reduced the threat of substitute,
thus in order to maintain customers engagement with the organization Burberry has to make sure
that it provide new and rare products to customers through which it can make sure that it is able
to fulfil customers requirements.
Existing market competition (Low)-
Burberry provides new products to existing market because of which company tend to make a
concentrated effort to improve customers experience with the organizational working through
which company can make sure that customer loyalty is increased. Due to this Burberry has
managed to achieve a efficient competitive edge and through which it can make sure that
existing customer count is maintained and also it is able to attract new customers towards the
organization. Due to this negative impact of existing market competition is low for Burberry.
5: Review of Burberry's strategy
It is a British fashion company, which deals leather goods, footwear, fashion accessories,
eye wear, fragrances and cosmetics. Burberry is serving its products to thousands of customers in
a day throughout the world. Their strategy is to be on the top brand in the fashion industry, by
providing high quality and premium products to the customer. They make changes in their
product segment as per the needs of the customer, it is the strategy of Burberry, to launch a new
strong new fashionable product to attract the customers and make them engaged. Burberry has
make some changes ion their product segment now they offer new products for the middle class
people as company feels that they can afford the products of Burberry. As the market is changing
and people are avoiding to visit the physical store due to the pandemic so the company has
changed its strategies, Burberry did many tie -up with the e-commerce companies of different
countries to survives in the market and remain competitive.
With the help of VRIO analysis, it gets to know that the company has rare resoucrces,
and competitors can't copy them. Apart from this Burberry has made investment to enhance the
technology like – it is updating their website using artificial intelligence in their physical stores
to draw the attention of the customer. It keeps changing and improving its technology, products

and strategies to remain competitive in the market, which is a favourable strategy for the
company (Olteanu, 2020). Burberry is trying to enter in the untouched companies as the people
of different countries are more obsess for intentional brand. Burberry is conducting many CSR
activities for the welfare and development of the society, which is again a good business strategy
of company by doing this, it is creating a good brand image among the society, which directly
put a positive image on the profit margin and sells.
By analysing pestle it got to know that the company is following all the legal rules and
laws of different countries. Company is doing all the things which can not harm the environment,
as the people are very conscious about the environment. Apart from this, Burberry is doing
various merger, acquisition and joint ventures so that it can rule the market. As it is global brand
it is following all the trade policies of export -import as well. Being a global brand it is
consonantly working on increasing and making changes in the existing policies and plans so that
the company always remains the first choice of customer. Besides this Burberry wants to open
more stores and want to expand its location to different countries and areas to get new customers.
CONCLUSION
This report concludes that by strategic management company can achieve its overall
goals and objective. By above analysis its also clear that by different analysis and factor
Burberry are improved their performance and increase their sales also expanding their business.
This report help to understand Burberry mission, vision, purpose and its main objective and by
internal factor analysis it also helps to explain that VRIO analysis and its framework help
Burberry to use its valuable resources in competitive advantage and to reach more customers. It
also evaluates that PESTLE analysis help Burberry to identified their external factors that affect
external environment of the company and business. Porter's Five force analysis is used for
evaluating competitiveness in market and it also helps company in expansion. By all above
analysis in the end of the report Burberry reviewed their strategy that hoe they use this strategy
for betterment and for higher performance.

REFERENCE
Books & Journals
Abalkhail, T.S., 2019. Entry and Expansion Strategies for Burberry in Oman by Applying
Porter's Five Forces Model. Indian Journal of Marketing. 49(1). pp.25-35.
Abalkhail, T.S., 2019. Entry and Expansion Strategies for Burberry in Oman by Applying
Porter's Five Forces Model. Indian Journal of Marketing. 49(1). pp.25-35.
Blas, A., 2018. The Competitiveness of the Spanish Clothing Industry.
Düerkop and et.al, 2017. Transportation under Threat–A PESTLE Analysis for Critical
Logistical Infrastructures. ICTA2017, p.14.
Olteanu, L., 2020. Rebranding strategies and their boomerang effect—The curious case of
Burberry. The Journal of World Intellectual Property. 23(5-6). pp.777-797.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Sah, S.K. and Dadwal, S.S., 2018. Managing Strategic Change and ERP Implementation under
Distinctive Learning Styles: Quantitative case of Burberry PLC.
Shtal and et.al, 2018. Methods of analysis of the external environment of business activities.
Silvano, M.D.C.L.F., 2020. Playing against the rules: how a digital strategy can enhance a
luxury business: the case of Burberry (Doctoral dissertation).
Wheelen, T.L., and et.al., 2017. Strategic management and business policy (p. 55). Boston, MA:
pearson.
Yudiono, N., Wilopo, W. and Iqbal, M., 2019. VRIO Analysis to Measure E-Business Readiness
in the Automotive Industry in East Java (Study on Otobus Company Kalisari and Otobus
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Bannerman, S., The History of Burberry and Its Famous Fashion Comeback, 2018. [Online].
Available through:
<https://theculturetrip.com/europe/united-kingdom/england/london/articles/the-history-
of-burberry-and-its-famous-fashion-comeback/>.
Daalderop, C., How Burberry reinvented its employer brand, 2021 [Online]. Available through:
<https://linkhumans.com/burberry/>
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<https://findanyanswer.com/what-is-burberry-mission-statement>