Market Entry Strategy of Burberry Group PLC: Nigeria & Angola MBA

This report analyzes Burberry Group PLC's market entry strategy into Nigeria and Angola. It begins by providing background information on Burberry and the fashion industry's evolving landscape, emphasizing the need for transparency and strategic globalization. The research aims to develop a market entry strategy for Burberry, considering the company's operating and marketing strategies, as well as the political and infrastructural challenges in Nigeria and Angola. The literature review covers key concepts like market entry approaches (waterfall vs. sprinkler), modes of entry (exporting, licensing, joint ventures), and Hofstede's cultural dimensions. The research employs a case study method, utilizing secondary data from industry reports and journals to analyze Burberry's opportunities and challenges in these African markets. The report explores Burberry's current strategies and proposes tailored recommendations for successful market entry, considering the unique economic and cultural contexts of Nigeria and Angola. Desklib provides access to this report and other solved assignments.

Running head: MARKET ENTRY STRATEGY OF BURBERRY GROUP PLC
Market Entry Strategy of Burberry Group PLC
Student name: George Okeke
Student number – A001639411
Subject name:
Discipline: MBA
Theme: Marketing
Author note

1MARKET ENTRY STRATEGY OF BURBERRY GROUP PLC
Table of Contents
Chapter 1: Project Statement...........................................................................................................2
Chapter 2: Literature Review...........................................................................................................4
Chapter 3: Research Methodology..................................................................................................9
Chapter 4: Analysis........................................................................................................................10
Chapter 5: Conclusion and Recommendation...............................................................................17
References:....................................................................................................................................21

2MARKET ENTRY STRATEGY OF BURBERRY GROUP PLC
Chapter 1: Project Statement
Background
The case organisation is Burberry Group PLC. The company is an iconic British luxury fashion
brand founded in 1856, the company designs, develops and sells product under the Burberry
Brand. Originally focusing on the development of outdoors attire, the brand has moved to the
high fashion market developing pattern based scarves,trench coats and other fashion
accessories.Burberry operates in Africa, Asia Pacific,Europe,Middle East,India and the
Americas. Burberry products are sold globally through its stores and online. The company is
headquartered in London,the UK and employs around 11,000 people across the world (Burberry
2016).
Project Topic
The reality of the fashion industry today is an industry that is defined by lack of connection
between the original producers of goods and the end consumers. But is has not been always this
way, in fact a hundred years ago everyone knew the name of the shoemaker, tailor, seamstress in
town. But as the distance between the production location and the purchase location has grown,
what has actually decreased is the lack of transparency and accountability with the marketing
channels and supply chains. This disconnect has had a lot of disastrous implications between the
producers and the consumers, and sort of stalled the growth of the fashion industry (Carrigan et
al,2013).

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Globalization has helped a lot of international businesses,the world is more connected and
services easily accessible that means commerce the thrives on scarcity and restriction of
knowledge has lost it value. Companies have started to realize that to succeed in the information
age you will need an intellectual edge that prevents them from being commoditized and helps
them harness the power of collaboration that exist between
communities(Wennstrom2007,p.106). The fashion industry is no exception to this change,
Burberry Group PLC has identified growth opportunities two African countries Nigeria and
Angola. Central to this plans are to expand,enhance growth and improve productivity, the
company operates only in South African and Egypt.
Industry analysts forecast that the luxury sector in Africa in 2019, will grow by a high single-
digit percentage in the medium term at constant exchange rates, driven by the continued growth
of the Nigerian and Angolan consumers. South Africa is expected to remain strong with both
tourists and locals driving luxury consumption. The outlook in Egypt continues to be uncertain.
Long term, the luxury market in Africa should benefit from evolving global demographics, rise
of aspirant middle class, affluent elite who are growing, improving macro and socio-economic
trends, strong luxury consumer travels and the continued increasing penetration of digital
commerce.
Purpose of Research
The purpose of this research is to developa market entry strategy for Burberry into Nigeria and
Angola. And in the course of this research the company’s entry approach and the modes of entry
into foreign markets was analyzed. Recommendations was made considering the company’s

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operating, marketing strategyand also the political volatility, inconsistent policies and lack of
basic infrastructures that support business growth in these countries.
Chapter 2: Literature Review
The following concepts,framework and theories are related to the topic of the research.
Market concept
Waterfall approach.
Sprinkler approach
Modes of Entry into Foreign Markets.
Hofstede’s cultural dimensions.
Research Method
The research method will be a single case study, Burberry Group PLC being the unit of analysis.
The secondary data will be collected from Global Luxury Goods Reports (MarketLine Industry
Reports 2017) and journals were accessed form EBSCO host. These secondary sources will be
used to analyze the company and the opportunities.
Literature review
Developing market entry strategy

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Heightened demand and competition in both domestic and international markets often force
organisations to develop new products or find new markets for their existing products (Kharub&
Sharma 2017). Thus, organisations entering new market will have to develop a market entry
strategy,market entry is risky and sometimes difficult. Rushing a product to market without
developing appropriate entry strategy can hurt the reputation of company if buyers view the the
brand as unreliable. According to Michael Porter (1998) the greatest risk an organisation could
face is the possibility that demand analysis and forecasts are wrong and the demand is much less
than expected.
Furthermore,when deciding which market to enter, organisations will have to define its
marketing objectives and policies and it has to align with the company’s core strategy. Core
company’s strategy refers to a set of actions that its managers take to outperform the competitors
and achieve superior profitability (Kotler et al 2016).The objective of a well-crafted market entry
strategy is not only temporal competitive success and profit in the short term, but rather a long
term success and profitability that can support growth and secure the future of the
company(Porter,1998).A company’s strategy tends to evolve due to changing circumstances and
ongoing efforts to improve the strategy by the management. Therefore, a marketing entry
strategy should yield a sustainable competitive advantage and basically offer enduring edge over
rivals and also appeal and resonate with consumers (Thompson, Peteraf, Gamble & Strickland
2016)

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In developing a market entry strategy, the company will have to develop a preliminary strategy
plan for introducing their brand into the market. The plan should mainly consist of three parts,
the first the describes the target market’s size, structure and behaviour; the planned brand
positioning, the sales, market share and profit goals sought in early years.The second is outlining
the planned prices,distribution strategy and marketing budgeting. Lastly the plan should describe
the long run sales, profit goals and the profit goals and marketing mix strategy
overtime(Thompson et al 2016). The company will ned to prepare sales, cost and profit
projections to determine whether they satisfy company objectives.
Developing a market entry strategy also involve weighing several risks, companies should aim to
understand foreign preferences, offer competitive attractive products. Organisation should seek
to to understand country’s business cultures, employ managers with international experience and
also consult locally to understand country’s tax regulations, currency fluctuations, foreign
regulations, commercial laws and political situations. A proper economic analysis of business in
the country would reveal risks and also offer the best entry approach. Entry strategy follows two
typical approaches,waterfall and sprinkler approach(Kotler et al 2012).
Market entry approach
The waterfall approach is an approach in which countries are gradually entered sequentially. This
strategy allows companies take gradual advantage of the opportunities.This involves estimation
of potential market size and revenue pattern, identifying target segment, creating brand
awareness and identifying possible distribution channels so as to formulate sale strategy.” And

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once the product identity is established in the new market,the learning from the same is utilized
to expand into another new market and the learning from the same is utilized to expand into new
market,somewhat with similar structure,sequentially”(Jolibert 2012). The advantages of water
approach is it allows companies with few resources to start their internationalization process in a
phased manner and determine the best way to reach new markets based on the experience in each
market. And also the level of risk is reduced because the company addresses each market in
phased manner and if they notice any disapproval of the product market, the company may
decide to quit.And some of the disadvantages this approach is difficulties in the first stage in case
of low success level (Hutt &Sneh 2013)
In sprinkler approach, many countries are entered simultaneously within a limited period of
time, but while this approach is a risky strategic framework for entering markets, it is more
suitable for products with shorter life cycle. Pricing strategy is used to generate as much profits
from sales,and experiences from market responses are limited to individual markets and the same
are not replicated in other markets. In other for this approach to be successful all marketing
activities has to be standardized, because of simultaneity marketing activities and numerous
marketing entries (Charney 2012). In this approach, first movers advantage is given when the
market is successfully entered, market entry barriers would now work against potential
competitors, risk diversification is given when risk associated with multiple simultaneous
marketing entry terms is distributed amongst different countries. Beneficial capacity utilization
can be achieved through possible high number of sales through entering multiple markets
simultaneously and a company makes full use of its competitive advantage by entering multiple
markets (Hollensen 2012). But this approach would require high financial and personnel

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resources within a short period of time, and it also less likely or impossible to learn from early
marketing entries if the learning curve is necessary for new marketing entries. And also too many
market entries may fail that’s causing major financial losses to the company or the organization.
Once a company decides to target a particular country, it has to determine the best mode of entry.
Its choices are direct exporting, direct exporting. licensing, joint ventures and direct investments.
(Kotler&Keller 2012).
Mode of Entry
In mid 90s till early 2005, most luxury fashion companies doing business in Nigeria and Angola
relied on indirect exporting, they operated through independent intermediaries, foreign based
based distributors and agents. These intermediaries seek and negotiate foreign purchases for a
commission. These distributors and agents maybe given exclusive rights to represent the brands
in these countries (Burberry 2017). This mode works well for the the fashion companies because
its less investments and they don’t have to develop an export department, an oversea sales force
or set up international contacts. But due to lack of accountability and the proliferation of
counterfeit goods adopting brand’s similar trademarks. Most luxury fashion houses started
changing their business model (Keegan& Green 2013).
Burberry adopts waterfall market entry approach in developing countries due political instability
and lack of infrastructures that support business growth, the strategy worked well in Egypt and

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South Africa. And they operate a joint venture, this means creating a joint venture with local
investors so as to share ownership and control (Kotler, Keller, Ang, Leong &Tan 2012).They
tend to work with high net worth families that have sufficient funds but usually will be reluctant
to increase their initial investment and also are willing to let the foreign partner run the joint
venture (Burberry 2017).
Chapter 3: Research Methodology
3.1 Research Method
The case research method was used in conducting this business research.This methodology
involves an empirical investigation of a particular contemporary phenomenon within it’s real life
context using multiple source of evidence. Furthermore, it uses numerous sources of data to gain
an understanding of a problem or an issue in its context and in the real world (Robson,1993,
p.146).The research methodology explores real situations, contemporary bounded cases over
time through detailed, in depth data collection involving multiple sources of information and
reports a case description and case themes (Creswell 2013 p.97.Case research method usually
have a double function,which is that case studies are studies of its own unit as well as studies of a
larger group of units. The conclusions are either illustrative or confirmable (Gerring,2004).
A single case study with embedded units is justified because it offers the opportunity to explore
the case with the ability to analyse the data within the case analysis, between the case analysis

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and make cross case analysis. Another justification for this approach is that it gives the
researcher the ability to look at two different countries that are within the case, and examine just
the market entry strategies into these countries (Yin,2003). The case research here is to develop a
market entry strategy for a British iconic luxury fashion Burberry Group PLC,that is considering
seeking opportunities in multiple foreign markets.Market entry approaches and modes of entry
into foreign markets were analysed with the Market Opportunity Analysis (MOA) so as to
determine the attractiveness and probability of success (Kotler et al 2012)
3.2 Data Collection
The research examined and evaluated the development of market entry strategies using
secondary quantitative data. Secondary data are data that has been collected for other purposes
other than this research. And in the case of this research an in depth literature review on the areas
on developing market in entry strategies was conducted examining the previous and current work
of experts in the field of marketing management and strategies (Sage, 2004). Secondary data
such as industry reports, company annual reports, journal article, government reports and
statistics where accessed through EBSCO, Ibisworld,Marketline.
Secondary data analysis is a more convenient approach for the research, because the researcher is
not a staff of the company or part of the original wider research team.The key to secondary data
analysis is to apply theoretical knowledge and conceptual skills to utilize existing data to address
the research questions. Hence, the first step in the process is to develop the research
questions(Corti and Thompson 1998).These previously studied business analytic tools were used
to conduct SWOT analysis of the organization, evaluation of the markets and the countries. And
also to determine which entry strategy that should be adopted.

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Chapter 4: Analysis
Market Entry Strategy of Burberry Group PLC
Waterfall model refers to a linear sequential design in relation to market entry. It is a flexible
approach and the progress flows in one particular direction by employing the phases of
conception, initiation, analysis, design, construction, testing, deployment and that of maintenance
(Ensign and Lunney 2015). This model originated from that of the manufacturing along with
construction industries. It is indicative of sequential business expansion into that of foreign
markets. The main characteristics of this model is using clear entry stage and consequently
making use of experience (Watson et al. 2017). The knowledge that one gains in one stage is
used in the next phase. A particular stage is characterized by the entry into that of a single
foreign market. A company enters into one foreign market and makes the brand popular in that
particular market. This is followed by the promotion of the product so that it becomes popular in
that foreign market. This market entry strategy helps in building a broad consumer base. In the
event of the company feeling comfortable in the market the business expands into that of the new
market.
Burberry Group PLC is a British fashion brand that was founded in the year 1856. The company
is instrumental in designing, developing and selling of products under that of Burberry brand
(Burberryplc.com, 2018). It makes outdoor attires, scarves, trench coats and that of other fashion
accessories. The waterfall model is greatly suited for the market entry of Burberry Group PLC as
it will provide the company sufficient amount of time with the help of which the company will
be able to understand whether the company will be able to retain its hold in the market. This
strategy will allow the companies to reap the advantages of the different opportunities in that of
the foreign market. Burberry Group will be able to utlilize the resources to the maximum extent