Burberry PLC: Management Structure and External Environment Analysis

This report provides a detailed analysis of Burberry PLC, a British luxury fashion house. It begins by examining the company's management structure, including its functional, divisional, and matrix organizational structures, with a focus on the roles of the Board of Directors, Nomination Committee, Remuneration Committee, Audit Committee, and Chief Executive Officer. The report then delves into the external environment influences on Burberry PLC through a PESTLE analysis, evaluating the impact of political, economic, social, technological, legal, and environmental factors on the company's operations and strategic planning. The report highlights how Burberry must navigate these external factors, such as economic downturns, changing customer preferences, technological advancements, and environmental regulations, to maintain its competitive advantage and achieve sustainable growth in the luxury goods market. The report concludes by summarizing the key findings and implications of the analysis.

Burberry PLC

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. The management structure and the governance of Burberry PLC...............................................1
Overview of Burberry PLC.........................................................................................................1
Management Structure of Burberry............................................................................................1
2. THE EFFECT OF EXTERNAL ENVIRONMENT INFLUENCES ON BURBERRY PLC.....4
Pestle Analysis ...........................................................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
The collection of external and internal factors that influences a company's operating
situation as it includes customers, client, suppliers, management, demand and business
regulation. Management structure of an organisation is very important to defined as it is the way
how an organisation organizes its management hierarchy (Ndzi, 2017). It is very essential for
organisations to manage the structure of organisation in a systematic manner. There are various
factors in external and internal environment by which organisation function, operation,
profitability is affected.
This present report is context to Burberry PLC which is a British Luxury fashion house in
UK. Further this report will examine the management structure and governance of sited
organisation. Moreover, this report will also evaluate the effects of external environment
influences the chosen company.
MAIN BODY
1. The management structure and the governance of Burberry PLC
Overview of Burberry PLC
Burberry Group PLC is a British luxury fashion house in United Kingdom. It is a public
limited company. Company was founded in 1856 by Thomas Burberry. Its headquarter is located
in London, England as it is listed in London Stock Exchange and is constituents of the FTSE 100
Index. It is one of the top international brands especially in clothing. Company is recognised for
its super quality. Its main fashion house focusses on and distributes trench coats for which it is
most famous. There are many other products of Burberry like ready to wear outwear, fragrances,
sunglasses, perfumes accessories and cosmetics. There are 498 stores of Burberry in 52
countries.
Management Structure of Burberry
Management structure is the hierarchical arrangements of lines of authority,
communications, duties and rights of an organisation. In simple words, it is structure that how a
company organizes its management hierarchy (Bayer and et.al., 2018). It determines how the
responsibilities, roles, power and duties are assigned, controlled and coordinated and how
information flows between various levels of management. There are mainly three of
management structure which are as follows-
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Functional Structure- This is one of the most common organisational structure. Under
this structure, the organisational groups employees as per the specialised and similar set of task
and roles. This is called as one of the most simplest as well as prevalent form of organisational
structure. In this structure, departments are created on the basis of functions performed in the
company such as marketing, sales, IT, human resources, operations etc. All the departments has
a coordinating head and can be further segregated into various sections (Management Structure
of Burberry PLC, 2018). Organisations which have functional organisational structure enjoys
many benefits like effective managerial efficiency, specialisation, good coordination etc. This
type of structure is economical as repetitions in function are not there in this type of structure and
it is suitable for simple and small organisations (Stevenson and Cole, 2018).
Divisional Structure- This is a type of organisational structure which groups each
organisational functions into a division. This is one of the organisational structure used by
Burberry PLC. In this type of organisational structure employees are responsible for specific type
of market services or product as per the workflow. In this structure, managers of each division
enjoys autonomy to some extent. This structure is suitable when organisations maintains chain of
stores as well as any subsidiary within nation or internal level. This type of structure is somewhat
expensive because there are repetitions of resources. This type of structure is suitable for
dynamic and large firms.
Matrix Structure- This is the type of structure in which reporting relationships are set up
as a matrix or grid instead of traditional hierarchy. Basically, employees of organisation have
dual relationship of reporting like to both a product manager and functional manager. This type
of structure is somewhat complex reporting structure as compare to functional and divisional
structure (Parkinson, 2018). The operations of organisation at global and giant level so they are
using this organisational structure.
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Organisational structure of Burberry PLC
This is the main organisational structure of Burberry PLC where all the committees or
function, activities are control by Board of Directors as per the above diagram. The all above
have to report to Boards on continuous basis.
Here are the role and responsibilities performed at Burberry are as follows-
Board- They are key person of the company. The fundamental role of Board is to raise
the value for long term stockholder. They determine the mission, vision and objectives of
company in order to guide as well as to set the pace of its present and future operations and
development (Blažek, Natsuda and Sýkora, 2018). Even all the policies are headed by board of
directors. The board of directors of Burberry are DR Gerry Murphy (Chairman), Macro Gobbeti
(Chief Executiev Officer), Julie Brown (Chief Operating Office).
Nomination Committee- These are the crucial part of the business as they are
responsible for corporate of governance as they are assigned the duties for changing the policies
of corporate governance. They are also identified the suitable candidates for various position of
directors.
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Illustration 1: Burberry Organizational Structure

Remuneration Committee- They are also a very essential part of the organisation as
they assist the board on matters relating to remuneration of senior management and Boards. In
order to raise the values of shareholders, they motivate as well as retain executives in the
company.
Audit Committee- The key role played by audit committee in assisting the board in
order to fulfil its oversight responsibilities some areas. For example, internal control system, risk
management system, external and internal audit system function of audit.
Chief Executive Office- They are the key person of organisation as they are the highest
ranking executives in the company. All the executives are responsible for taking all the corporate
decisions, management of entire resources and operations of organisation as well as they act as a
medium of communication in between corporate operations and BOD (Hannigan, 2018).
2. THE EFFECT OF EXTERNAL ENVIRONMENT INFLUENCES ON
BURBERRY PLC.
Pestle Analysis
Pestle Analysis is one of the best model to track the factors affecting the business
operations in both positive and negative way. These factors are out of the control of organisation.
This is the most common concept of marketing principles. Organisation operating in both local
or global environment needs to analysis all the macro-environmental factors within in a quarter
of half yearly (Dimitrakopoulou, 2015). It is fact that organisations that effectively manages
monitor as well as respond to changes in external environment are able to separate from its rivals
in the market and create a competitive benefit. Pestle stands for, P- Political, E- Economic, S-
Social, T- Technological, L- Legal and E- Environmental.
It is very important for Burberry to conduct Pestle Analysis on regular basis it is because
organisation is working in the external environment that needs to be deal with all these factors
which influence the business in both positive and negative way.
Here is the significance of Pestle Analysis for Burberry PLC which are as follows-
It is broadly used for strategic planning of the company. It is very essential to determine
the external factors which might influence on project and its planning procedure.
It is also very useful to determine the opportunities and threat which may affect the
business in both positive and negative manner (Lorente Pons, 2017). By identifying, Burberry
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can focus on grapping opportunities from external environment along plan actions for controlling
other factors which are causing threat to business.
Here are the factors which influence Burberry is as follows-
Political- This is factor which relates to the opportunities and pressure brought by
political party and at what extent the policies of government influenced the business. Burberry is
famous for its luxury goods company and they are subject to labour and trade laws. Burberry do
not only operates in London but across the world (Rajkumar and Arulraj, 2018). There are many
opportunities by expanding business in many countries like cheap labours, brand extension, etc.
but there are many laws and regulations which need to be follow and it is mandatory. There are
some countries that levied high tax rates on foreign companies in order to boost domestic
production. The cost of operation increases just because of high taxation which in turn decreases
the profit of the company and it leads to negative impact on the organisation. But, Burberry is
expanded its business in emerging market where they are flourishing.
Economic- This is the factor which relates to the economic structures, economic policies
and at what extent these affect the business. Since 2011, the industry of luxury good are facing a
slowdown just because of economic weakness in Europe. United Kingdom is the 6th largest
luxury market in Europe. It has been noticed that when there are downturns in economy, people
usually prefer affordable goods in order to meet the basic needs which directly hit the
performance of Burberry in the market. In 2016, the export of luxury good rises to 57 percent
which provides an incredible opportunity for Burberry to raise its profitability and sales as well
as it leads to more optimistic economic environment.
Social- This is the factor which relates the aspects of culture, beliefs, attitude that will
influence the demand for the goods and at what extent these affects the business. For Burberry
company, social factors hold utmost importance. In order to accomplish the best and superior
performance, Burberry has to serve the needs and expectations of customers and make them
satisfied (Laflamme and et.al., 2019). The target customers of Burberry have several lifestyles
and cultures because of operations in different regions so company have to maintain the range of
products. Different regions or communities prefer different products, different dressing styles
etc. In order to meet dynamic needs and preferences of customer's, Burberry uses social media
platforms to collect the information on experience of customers as well as to keep them engage
with company.\
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Technological- This is the factor which relate to the innovation, technological aspects,
incentives and barriers and at what degree it affects the company. Changing attitudes of
customers means brands must clench technology (Pestle Analysis of Burberry PLC, 2018). Just
because of advancement in technology like internet, the power of customers increases as they are
becoming very advance day by day. With the rise of technological advancement, the advertising
and promotion activities are at the great heights which aids to reach large number of customer's.
The online presence of company attracts customers as they are now purchased products sitting at
home. On the other hand, technological factors is somewhat risky for Burberry's because of rapid
change in technology leads to high capital expenditure for company.
Environmental- This is the factor which related to environmental and ecological aspects
that influenced the product of company and at what extent it affects the business operations. It is
very important that organisations to abide by environmental laws and regulation, carbon
emission etc. This factor affects influence the reputation of Burberry. The product of Burberry
like clothing, socks, jeans are manufactured from organic cotton wool which do not harm the
environment (Oda and et.al., 2018). On the other hand, hazardous affects and terrorist attacks
influenced the company in carried out its business activities. For example, the internation supply
chain and stores of Burberry has disrupted by Catastrophes that brought great loss top the
company.
Legal- This is the factor which relates to the regulations, laws, legislations which
influenced in the manner in which business is operating in the market. It is fact that success of
company depends on the legal practices of organisation. On the performance of Burberry, legal
laws have optimistic effects, on the other side, the profitability of company is compromise
because of unfavourable laws. Labour laws and employment laws are main legal regulations that
influence the business activities of Burberry (Decker, 2018). Company has taken Patent for its
products but the problems are not solved because of local companies as they imitate the products
very fast. But benefit of patent is that it minimises the risk of imitation to the great extent.
CONCLUSION
The above report comes to the conclusion that it is very important for organisation to
have a well-defined structure so that the desire goals and objectives are accomplished. It
determines how the responsibilities, roles, power and duties are assigned, controlled and
coordinated as well as how information flows between various levels of management. Further,
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report also summarised that factors of macro-environmental influenced the business operations
and functions of company. Significance and impact of macro-environmental factors of pestle
analysis was also discussed in this report.
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REFERENCES
Books and Journals:
Bayer, C.N and et.al., 2018. GLOBAL GOVERNANCE–Compliance and Conformance with
UK MSA and Good Practice in Human Rights: FTSE 100 and Real Estate 100.
Blažek, J., Natsuda, K. and Sýkora, J., 2018. Entrance-exit dynamics of suppliers and the
repercussions for reshaping the structure of GVCs/GPNs. European Planning
Studies, 26(12), pp.2364-2386.
Decker, M.N., 2018. The Extrinsic Regulation of Hematopoietic Stem Cells in Health and
Disease (Doctoral dissertation, Columbia University).
Dimitrakopoulou, P., 2015. The Development Of A Bussiness Strategy Model For A Luxury
Brand.
Hannigan, B., 2018. Company law. Oxford University Press, USA.
Laflamme, C and et.al., 2019. Implementation of an antibody characterization process:
Application to the major ALS/FTD disease gene C9ORF72. bioRxiv, p.499350.
Lorente Pons, A., 2017. Investigation of oligodendroglial pathology in amyotrophic lateral
sclerosis (Doctoral dissertation, University of Sheffield).
Ndzi, E., 2017. The impact of the Salomon principle on directors’ remuneration in the
UK. International Journal of Law and Management, 59(2), pp.257-270.
Oda, A and et.al., 2018. Niche-induced extramedullary hematopoiesis in the spleen is regulated
by the transcription factor Tlx1. Scientific reports, 8(1), p.8308.
Parkinson, M.M., 2018. Corporate Governance in Public Companies. In Corporate Governance
in Transition (pp. 9-41). Palgrave Macmillan, Cham.
Rajkumar, C. and Arulraj, A., 2018. Seed mediated synthesis of nanosized zinc oxide and its
electron transporting activity in dye-sensitized solar cells. Materials Research
Express, 5(1), p.015029.
Stevenson, M. and Cole, R., 2018. Modern slavery in supply chains: a secondary data analysis of
detection, remediation and disclosure. Supply Chain Management: An International
Journal, 12(3), pp.81-99.
Online:
Management Structure of Burberry PLC. 2018. [Online]. Accessed through:
<https://www.burberryplc.com/en/company/governance.html>.
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Pestle Analysis of Burberry PLC. 2018. [Online]. Accessed through:
<https://businessteacher.org.uk/pestel/burberry.php>.
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