Burberry PLC: A PESTEL Analysis and Organizational Structure Report

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BUSINESS ENVIRONMENT
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Table of Contents
INTRODUCTION.......................................................................................................................................3
OVERVIEW................................................................................................................................................4
LO1.............................................................................................................................................................5
EXAMINE THE MANAGEMENT STRUCTURE AND THE GOVERNANCE OF BURBERRY......5
GOVERNANCE OF BURBERRY.........................................................................................................6
LO2.............................................................................................................................................................8
ASSESS AND EVALUATE THE EFFECTS OF EXTERNAL ENVIRONMENTAL INFLUENCES
ON YOUR CHOSEN ORGANIZATION...............................................................................................8
MEANING AND EVALUATION OF PESTEL.................................................................................8
List of the factors involved..................................................................................................................9
CONCLUSION.........................................................................................................................................14
REFERENCES..........................................................................................................................................15
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INTRODUCTION
This assignment is about the PESTEL analysis of the company Burberry that is Political,
Economic, Social, Technological and Environmental factors affecting the company (Shah and
Dadwal, 2018). This assignment is about a detailed analysis of the company its board of
directors, management and organizational structure. The assignment also discuss how PESTEL
affects Burberry’s future planning what are the advantages and disadvantages of applying
PESTEL on the company, what are the things which are included in each of them. This analysis
is very important for every organization because it gives a detailed idea about the factors both the
internal and external which affects the company in present and future.
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OVERVIEW
Burberry PLC is a luxury fashion company based out of London it was founded in the year of
1856 by Thomas Burberry and is a public limited company (Shah and Dadwal, 2018)). Burberry
deals in apparels, perfumes, accessories and cosmetics and its annual revenue is about £2,732.8
million and net income is £2, 93.6 million. Burberry is one of the top-notch fashion brands which
is popular all over the world among all the elite class people. The board of directors are: DR
Gerry Murphy, Chairman of the Board on 12 July 2018, Marco Gobbetti, Chief Executive
Officer, Julie Brown, Chief Operating and Financial Officer and Fabiola Arredondo Non-
Executive Director
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LO1
EXAMINE THE MANAGEMENT STRUCTURE AND THE GOVERNANCE OF
BURBERRY.
The company chosen is Burberry, which is a leading British luxury fashion brand, headquartered
in London, England.
Burberry was found by 21-year-old Thomas Burberry in 1856 and deals into apparels,
accessories, perfumes and cosmetics. Burberry has become popular and most wanting brand
among the elite class people. The main sector of Burberry is fashion and clothing and initially, it
was famous for the jacket which was made from the kind fabric called Gabardine which is
waterproof and completely breathable. Burberry's first shop was opened in the Haymarket,
London in 1891. In 2015, Burberry was ranked 73rd in the inter-brand report against Prada and
Louis Vuitton.
Burberry has about 10000 employees working in London headquarters with 58 different
nationalities and focuses on diversity and equal opportunities for the employees and constantly
improves the working condition and practices at manufacturing sites.
Burberry has its board of directors with executive and non- executive directors which plays a
crucial role in the operations of the Burberry (Winnubst, 2017). The following organisational
structure of Burberry:
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[figure1 : Organisational structure of Burberry]
Source: (Winnubst, 2017).
DR Gerry is the chairman of Burberry appointed on 12 July 2018. Marco Gobetti is the Chief
Executive Officer in Burberry was appointed on 5 July 2017. Julie Brown is the Chief Operating
and Financial Officer was appointed on 18th January 2017. Fabiola Arredondo is the Non-
Executive Director was appointed in March 2015 she is in the nomination committee and
remuneration committee of Burberry. Ian Carter is also the Non-Executive Director was
appointed in April 2017 he is in the audit committee and nomination committee of Burberry.
Orna NiChionna is also the Non-Executive Director was appointed in January 2018, she is in the
remuneration committee and nomination committee of Burberry. Burberry has mainly three
committees these are nomination committee, remuneration committee and audit committee
Burberry (Winnubst, 2017).
GOVERNANCE OF BURBERRY
AUDIT COMMITTEE
The role of an audit committee is to look after the financial status of the company, auditing of the
books of the company, reviewing the revenues of the company and overseeing the work of
external auditors, investors and ensuring their remuneration and tax related work is carried out in
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DR GERRY MURPHY
CHAIRMAN
MACRO GOBETTI
CHIEF EXECUTIVE OFFICER
FABIOLA ARRENDONO
NON-EXECUTIVE DIRECTOR
IAN CARTER
NON-EXECUTIVE
DIRECTOR
JULIE BROWN CHIEF OPERATING and FINANCIAL
OFFICER
ORNA NICHIONNA
NON-EXECUTIVEDIRECTOR

this committee. Key people working in this committee in Burberry are Matthew Key, Jeremy
Darroch, Dame Carolyn McCall and Ron Frasch (Winnubst, 2017).
REMUNERATION COMMITTEE
The role of this committee is to take care of the remuneration of all the executive and non-
executive directors in accordance with the work they are delivering to the company (Winnubst,
2017)). Along with this they are responsible for the remuneration strategy of the company and
have to take care of the remuneration of the other board of directors too. Other key people
involved in this committee are Orna NiChionna, Fabiola Arredondo, Ian Carter, Stephanie
George, Ron Frasch and Matthew Key Burberry (Winnubst, 2017).
NOMINATION COMMITTEE
This committee is the core of all the committee because this is the major one and plays an
important role. This committee looks after the succession planning of the board of directors,
identification of potential board of directors, assessment of existing board of directors and they
make ensure that the working of the top level people is in the lieu of the company’s vision and
mission and that too in a productive manner. The key people involved in this committee are DR
Gerry Murphy, Fabiola Arredondo, Ian Carter, Jeremy Darroch, Stephanie George, Matthew
Key, Dame Carolyn McCall Ron Frasch and Orna NiChionna (Winnubst, 2017).
The Chief people in Burberry are responsible for the fulfilment of the organizational goals and
they need to review every day’s progress report by the risk committee, other legal affairs, social
obligations and long –term goals are reviewed by its respective committee. Burberry has set
some goals which are to be fulfilled in 2022 which are being under constant supervision by the
Burberry’s top leaders under their leadership qualities. The other external responsibilities and
cross-functional delivery groups are being guided by the responsible committee of Burberry. A
very pro-active and robust governance framework has been set for the internal supervision and
operation of the company where constant improvement and supervision is being done.
This is how the board of directors, its structure and different committees have been formed in
Burberry for the close governance on the operation of the company, by which Burberry has
become renowned and leading brand in the international market (Edger,2016).
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LO2
ASSESS AND EVALUATE THE EFFECTS OF EXTERNAL ENVIRONMENTAL
INFLUENCES ON YOUR CHOSEN ORGANIZATION
The organization that is chosen for this assignment is Burberry which is a leading luxury fashion
brand founded in 1856 and it is a public limited company (Widya el . at, 2018) Big brat
companies have to consider many factors for their successful working in the market. The
company like Burberry having such high brand value and goodwill always safeguard themselves
by doing various types of analysis. In this assignment PESTEL analysis is to be done for
Burberry which includes political, economic, social, technological, environmental and legal
factors are studied which are as follows:
MEANING AND EVALUATION OF PESTEL
Figure 2: PESTLE analysis
[Soruce: Widya et al., 2018]
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PESTEL analysis is done for the company which explores and identify the external factors which
influence the decision making of the company. This analysis includes the political, economic,
social, technological, and environmental and a legal factor which affects the company is studied.
It is an important tool for auditing the competition out there in the market and identifies the
threats which can affect the company (Widya el . at, 2018)). There are many factors which are
out of the control of the business but affect the decision-making process of the company. In order
to avoid such a situation of loss bearing and sudden changes in the company PESTEL analysis is
done.
List of the factors involved
Political Factors
This includes all the factors and affairs related to government and new policies, which are as
follows:
 Tax and regulation policies
 Business regulation policies
 Global trade policies
 Political implications
Economic Factors
 Value of currency
 GDP
 Buying capacity
 Inflation
 Cost of living
Social Factors
 Change is the choice
 Change in population
 Change in culture
Technological Factors
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 Innovation in technology
 Innovation in production methods
 Changes in data handling
 Adaption of technological up gradation
Environmental Factors
 Corporate social responsibility
 Environmental Protection
Legal Factors
 Wages
 Changes in Taxation
 Labour laws
 Health and safety
The above are the factors which are involved in PESTEL, generally, most of the company do this
analysis before entering any new sector or launching of any new product. This helps to identify
and gives a rough idea of the response and factors affecting the new step which is to be taken by
the company. Like Burberry initially was only into the apparels but after analysis and identifying
different factors it added perfumes and accessories to the existing product and automatically a
product line developed.
Evaluation of PESTEL
1. Political Factor:
Political factors play a very crucial role in the decision-making process of the company. This
includes different policies of government like tax policy, political stability, trade policies etc. A
company like Burberry generates its revenues and income in millions which is not a small
amount. There are various tax-related policies, governmental changes which affect the
production, buying and selling capacity.
For example, if the UK government brings any change in its taxation process then the whole
financial department and procedure of Burberry have to cope up with that change and
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