Analysis of Burberry Plc's Management, Governance, and PESTEL Factors

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Burberry Plc
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Contents
Introduction.................................................................................................................................................3
Assessment..................................................................................................................................................4
Conclusion:................................................................................................................................................15
References:................................................................................................................................................16
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Introduction
Burberry Plc is a fashion company headquartered in London, England. It is established in 1856
by Thomas Burberry. Burberry Group Plc is a private limited company. Thomas Burberry
invents gabardine and designs of signature trench coat. The quality of Burberry products is very
good. It is a British Brand which focused on the trench coat. The brand deals in clothing,
cosmetics, accessories and perfumes and it serves their product worldwide. The main objective
of Burberry Plc is to achieve a high position in fashion industry.
In this report, the management structure of Burberry Plc will be discussed. History of Burberry
Group Plc is described in this written report. List of board of directors, stakeholders who are an
entity of company indirectly or indirectly manner is explained in this report. Importance of
PESTEL analysis in an organisation and how its factor affects the growth of business is
identified in the given report.
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Assessment
1. Describe the structure of the company, its management and how it is governed.
Burberry Group Plc is a private limited company which is founded by 21 years old Thomas
Burberry in 1856. It is a British Brand which is diverse worldwide. Burberry Group plc sell their
product in different countries. The main motive of Burberry Plc is to spread its brand all over the
world and build a high status in fashion industry. The employees of Burberry Plc are around
15000 or more (Richard, 2016).
The management of Burberry Plc is a responsibility of board of directors. The company is
governed by board of directors so, it is a hierarchical system.
(A) An overview of your chosen company including its history and the organisational
structure. How is the company managed nationally?
Burberry Group Plc is manufacturer, exporter and broker of expensive goods. Burberry Plc gives
licenses to other retailers to sell their product by using their trademarks. Burberry Plc is bifurcate
in exporter/broker and licensing. The broker and exporter sell expensive goods from Burberry
showrooms, E-Commerce.
In 19th Century, Burberry Group Plc was founded in 1856 by 21 years old Thomas Burberry,
former draper’s apprentice. He opened his store in Basingstoke Hampshire, England. After few
years 1870, the business is developed on a high scale by focusing on the trends of fashion
industry (Moore, C. M., 2019).
Board of Directors manages the company by implementing some policies and commitments.
These help to manage the employee retention and expand the growth of brand.
In the words of Kamal (2017), the policies by which Burberry Pc manage nationally are:
 Anti-Bribery and Corruption Policy: Burberry Plc is involved with employees, customers
and stakeholders in a legal manner as well as follows ethical rules and regulations with
independence and dignity. It is a major factor by which Burberry is called a Brand and
improves its strategy and reputation. Corruption is not acceptable by Burberry Plc in any
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form. All necessary steps which remove bribery and corruption from the organisation are
taken by Burberry Plc.
 Healthy and safe environment Policy: Main target of Burberry Plc is to remove the entire
chemical which affects the environment till 2020 for a healthy and safe environment.
Provide healthy and safe environment to employees; it increases productivity and
employee retention.
 Corporate Governance: The responsibility of board is to support the Burberry Plc in their
management strategic aims and policies. Strategies aim to run business on an
international level and maintain it successfully. Boards must help in achieving the targets.
 Human Rights Policy: Burberry Plc is respected and work for human rights. It is used to
protect employees. International Bill of Human Rights develops this policy, and it
follows the UN principles on business. The framework of UN is Project, Remedy and
Respect of employees.
 Tax policy: Burberry Plc is an expensive retailer and manufacturer industry. The total
retail locations are 400 in all over the world. All the tax strategies are fulfilling by
Burberry Plc group in respect of tax. The tax strategies are applied in all locations of
Burberry Plc.
 Gender gap: Burberry Plc has 15000 employees in 35 countries. The employees are
recruiting in Burberry Plc on basis of their knowledge and experiences, not on gender.
The anti-discrimination act is followed in Burberry industry. It takes a step to fulfil the
gap between genders and develop more women leaders to run the business and its
growth.
(B) Briefly discussions of how the company is governed.
According to the words of Burberry (2017), the company is governed by board of directors
so, it has hierarchical structure. Board of directors is responsible for management of strategic
aims of Burberry Plc. They help to achieve the goals and expand business successfully with
long-lasting stakeholders and shareholders. Board of directors is indirectly or directly
responsible for success of organisation. They provide directions to organisation for making
strategies and evaluate the results after implementation. Board of directors is responsible for
internal management, risk management of organisation. The major decisions like innovation
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of new strategies, total annual budget, financial, management plans, capital expenditure are
approved by board of directors.
- How many directors are on the board? Who is the chairman of company, who is the
CEO? When were they elected and appointed? How many of the executive and non-
executive directors?
Name of Directors Age Designation
Gerry Murphy 62 Chairman of Burberry Plc
Marco Gobbetti 59 Chief Executive Officer (CEO)
Julie Brown 56 Chief Operating and Financial Officer and
executive director
Jeremy Darroch 55 Senior Independent Director
Gianluca Flore 58
President of Americas & Global Retail
Excellence
Fabiola Arredondo 51 Non-executive director
Ian Carter 56 Non-executive director
Ron Frasch 69 Non-executive director
Stephanie George 61 Non-executive director
Matthew Key 55 Non-executive director
Orna Nichionna 62 Non-executive director
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- Define a stakeholder. Give examples of stakeholders.
Stakeholders are the people who combine with organisation directly and indirectly. A
stakeholder has an interest in growth of company for a specific reason. It is a party which
affected the growth of business. The initial stakeholders of an organisation can be customers,
employees etc.
Examples of stakeholders are customers, employees, retailers, investors, suppliers, resources,
users, shareholders, directors, agencies, community, unions etc.
- Discuss the relationship between the Board of Directors and the stakeholders, for example
with:
(a) The Shareholders
(b) Employees and
(c) The customers
The relationship between the Board of Directors and shareholder is:
Shareholders and Board of Directors are both play different role in an organisation. Shareholders
buy the company by owning shares of company and the directors handle the management plan of
organisation. Shareholders not overrule on board of directors but they can take legal action if
directors do something wrong or improper.
The relationship between the Board of Directors and Employees is:
The relationship between directors and employees is like the relation of a leader and follower.
Directors decide for employees who increase their knowledge and improve skills. Directors give
opportunities to employees to show their talent and appreciate them.
The relationship between the Board of Directors and Customers is:
Every decision which is taken by board of directors is affected to their customers, communities
and shareholders. Decision of Directors is depended upon customer demands and needs. The
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priority of directors is customer satisfaction. It helps to make a strong bond between customer
and organisation.
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2. Identify the importance of conducting PESTEL analysis for an organisation
In the words of Chen and Pan (2019), PESTEL analysis is a tool which is used by an
organisation to identify the macro environmental factors which affect the industry and its growth.
It is a strategic framework which helps to understand the external factors that impact on the
organisation.
According to the words of RASTOGI and TRIVEDI (2016), PESTEL stands for-
P = Political Factors
E= Economical Factors
S= Social Factors
T= Technological Factors
E= Environmental Factors
L= Legal Factors
PESTEL analysis is important to assess the risk within an organisation. The risk can be internal
or external.
Internal risk refers to the mistakes which make while collecting the data and information related
to projects. These internal risks can be easily identified by using technologies like PERT, and
RBS (Risk Breakdown Structure).
External Risks are causing by external factors which are beyond an organisation, and these risks
are very difficult to identify. PESTEL analysis helps to identify the risks which are not assessing
by technologies.
There are 4 main reasons for which PESTEL analysis is useful:
 It helps to analysis the potential threats in advanced and gives opportunities for personal
development and business extension.
 PESTEL analysis gives a framework of direction of work to Burberry Plc.
 It provides information about project which may fail in future.
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 This analysis helps to know the external factors of new environment.
The benefits of using PESTEL analysis in an organisation:
 It is very easy to understand and simple in use.
 This tool provides new opportunities for personal development and spots an organisation.
 It can help the company to identify the potential threats which give bad impact in future.
 PESTEL analysis fulfils the requirement of understanding the business environment.
 The tool helps to modify strategies and develop thinking level of employees and
managers.
Burberry Group Plc is not only established in London; their branches are worldwide. Different
countries have different political rules, regulations, legal ethics and ethical laws which are
creating problem in the business activities of Burberry Plc (Gasparini, 2017). PESTEL analysis
provides information about the challenges which are faced by Burberry Plc in a competitive
environment.
The macro environmental factors affect the five force model that give shape and provide
strategies for an organisation. The combination of PESTEL analysis and five force model
increases the productivity of organisation and enhance the growth of Burberry Plc.
PESTEL analysis is a strategic technique which helps the organisation to remove all the potential
obstacles that create problems in goal achievements.
It is important to use and conducted in an organisation for growth of business with solving all the
issues related to politics, society, environment, legal, economic, and technology. It provides a
smooth growth to an organisation and solves external issues in little time.
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3. Briefly Discuss the PESTEL factors Examples are:
-Political - Change of government
-Economic – High rate of inflation
-Social – Increased rate of immigration or emigration, changes in behaviours
-Technological – Latest technology
-Environmental – Climate
-Legal – Change in law.
Apply the PESTEL factors you have discussed to your chosen company. Give relevant
practical examples to illustrate your points.
Name of Factors Definition of Factors Impact of PESTEL on
organisation
Political factors These factors refer to which
the economy of the
organisation is affected by
activities of government. For
Example tax policies, change
in government etc.
The branches of Burberry Plc
are all over the world. The
different countries in which
Burberry operates its
organisation have different tax
policies, government and their
domestic rules. Most of the
countries conduct high value
of tax so that they can increase
their domestic production. The
PESTEL analysis helps to
assess these factors and make
a decision of problem-solving.
Economical factors These factors are elements of
economy of organisation and
it gives an impact on the
Economy is directly
proportional to expenditure of
an organisation. Customers
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economy, and these issues are
long term issues which are
faced by the organisation.
For example Globalisation,
changes in economic
environment etc.
purchase goods according
their economic status.
Economic factors affect
Burberry Plc by local and
international competitive
brands. The foreigners
purchase Burberry Plc product
to maintaining their status.
The reduced volume of
Tourister affects profit and
sales of Burberry Plc (Phau,
et. al., 2015).
Social – Cultural Factors Socio-Cultural factors include
all the elements which affect
the organisation and its market
socially. For Example
Changes in socio-cultural
trends, lifestyle, educational
level etc.
The culture and lifestyle of
loyal customers of Burberry
Plc are different (Dekhil,
2017). Some people like to
wear short dresses while some
like reserved dressing. All the
demands of customers should
be mind on Burberry Plc. It is
engaged with social media like
twitter, facebook with the
customers to know about their
lifestyle and experience with
products of Burberry.
Technological Factors These factors determine the
alteration in technology which
affects the industry and market
in good or bad manner. For
Example impact of internet
and new technologies etc.
Burberry Group Plc is used
the latest technology in their
organisation to achieve their
targets and goals. It sells their
product online which create
efficiency because the
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