Strategic Management Report: Analysis of Burberry's Strategic Plan

This report provides a detailed analysis of Burberry's strategic management practices. It begins with an introduction to strategic management and its application within Burberry, a prominent luxury fashion brand. The report delves into Burberry's strategic planning process, outlining the steps involved in assessing the business environment, developing objectives, and implementing strategies. It then explores various strategic management models and tools, including SWOT, PESTEL, and Porter's Five Forces, and demonstrates how Burberry utilizes these frameworks to analyze its internal and external environments. The report also examines the importance of change management in adapting to market dynamics. Through this analysis, the report offers insights into how Burberry maintains its competitive advantage and achieves its business objectives. This report is contributed by a student and available on Desklib.

STRATEGIC
MANAGEMENT

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................2
Strategic Planning Process of Burberry.......................................................................................2
Models and Tools Used to Determine Strategy...........................................................................4
Application of Strategic Management Models and Tools...........................................................6
Importance of Change Management............................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Strategic management is effective framework of the organization which helps to manage
all the activities to increase the performance by analysing all the resources in external and
internal business environment effectively. This helps to evaluate All the factors and formulate
effective objectives and increase the potential of business to compete in market effectively. To
explain the strategic management activities this report describes it with help of Burberry which is
fashion giant in the world and provides luxury products with high quality to its target customers
effectively. Company established in London, UK. Report explains different types of management
models and theories which helps to analyse internal and external business environment factors to
develop effective strategy. Report also provides different process which are used by Burberry too
develop their strategies. Report also helps to provide effective understanding about all the factors
which increases the potential of company to compete in the market and gain higher profit
margins effectively.
Strategic Planning Process of Burberry
Strategic assessment is the process to identify the all the factors which help business to
understand all the its internal resources to develop effective strategy. This strategic assessment
helps Burberry to understand all the resources and strengths to increase their potential and
develop better strategies which is integrated to their vision and also increases brand value of the
company in market effectively (Durand, Grant and Madsen, 2017). The assessment process is
designed in top stages which helps Burberry to identify each stage effectively and increase the
performance of organisation to define better objectives.
To determine the planning process Burberry in the initial stage, evaluate the current
resources which are used to achieve objectives of the company. This also helps the company to
understand the performance and market position. Then Burberry uses all this information to
develop effective objectives by implementing research and development teams in the market.
This provides better understanding about current market trends which customer have to increase
their satisfaction and make them loyal effectively. Company also analyses the different
competitor’s strategy to innovate effective methods and compete in market effectively. Company
develops its objectives by integrating with vision and core values which helps to develop cultural
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value of the company to achieve these objectives effectively. It is very essential for the company
top analyse its strategies position by developing effective vision which is based on the cultural
value of employees, nature of business, mission and core value to increase perceived value of
customers in the market effectively. Then company uses different channels of communication to
gather information to for effective strategy which also helps the company to become more
potential in the market. Burberry motivated their employees to participate in decision making
process and also provide them with healthy working environment which increases the innovative
thinking w. this can help company to gather better information with leas cost and high
productivity effectively. Burberry also uses digital platform by providing different questionnaires
and interviews of the random users to gain better perspective about the market trends and current
issues which is impacting the brand value in the market negatively. Internal an d external factors
w has different impact on business activities which is also very important for bur berry to analyse
and gain higher efficiency to attract more customers effectively.
SWOT is used by Burberry to understand all the strengths, weaknesses, opportunities and
threats fin the internal and external market and with the help of Pestle company understand the
impact of external factors on business activities and this can also potentially affect this factors
cannot be controlled by Company which also increases the influence of them higher and reduces
the efficiency of the company (Certo and et.al., 2016). So it is very essential for the company to
determine all the factors which can nullify the effect on business activities effectively. After this
stage Burberry need to develop new foundation of the strategies with gained information from
the above stages. this will help the company to more potential top performs their tasks and
compete in the clothing industry effectively. It is analysed that increase in lifestyle also increased
the opportunities for Burberry to attract more fashion lever customer in the business and increase
their profit margins to achieve objectives effectively. In the last stage Burberry develop core
values of the organization by examining the beliefs, attitudes, behavioural patterns and personal
value of employees (Zhao and et.al., 2017). This increases the performance of company by
creating healthy working environment which provides efficiency to achieve objectives in the
given time period and reduce the cost effectively.
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Models and Tools Used to Determine Strategy
There are many factors in the market which needs to be analysed with the help of
different models and analytical tools which helps to increase efficiency to gain better market
share and improve the brand value effectively (Baumgartner and Rauter, 2017). strategic models
and tools also helps to increase the competiveness of Burberry in the market to attain higher
profit margins. This improves the efficiency of the company to provide effective understanding
and maintain the quality of the products effectively.
SWOT
SWOT is the analytical framework which helps business to determine its strengths,
weaknesses, opportunities and threats to develop effective strategies which helps to achieve the
opportunities and reduces threats and weaknesses of company effectively (Okumus and et.al.,
2019). This tool helps to evaluate the current position of business in the market with the exiting
factors and formulate effective strategies to grow in market and capture more customer base
effectively. This provides effective understand of all the issues which company is facing and can
resolve it by increasing the strengths and converting weaknesses into opportunities to increase
business size effectively.
Advantages
This provides effective information for business to develop better strategies according to
strengths. SWOT is very effective in identifying eh core values of the business organisation
which increase the efficiency of business to increase its sales and profit margins with effective
strategic planning. This tool, helps to integrate all the previous, current and future trends together
to gain higher performance of the organisation in the market effectively.
Disadvantages
This toll decreases the efficiency of the factor by making it very simple in nature which
increases the misunderstanding in making strategy by business organisation. As this tool helps to
provide the opportunity and threats of the external market however rapid changes in the market
also reduces the outcome of the business strategy.
PESTEL
It is macro environment analytical tool which helps to analyse all the six types of factors
which impacts business activities and reduces the performance to achieve their objectives
effectively (Newburry, Deephouse and Gardberg, 2019). This tools provides better perspective
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for the long run and divide effective strategic management and increase the efficiency of
business to understand all the factors which cannot be controls by business. By developing
effective strategies business can avoid all the threats and attain better market share to become
leader in the market. This tool provides information al customers of all the industries and these
factors impact all the business industries indirectly. Political, economic, social, technological,
environmental, legal are the six factors which are examines in this tools to gain better perspective
to formulate strategy effectively.
Advantages
This tool is very cost effective and provides effective information about the market as a
whole to which helps to increase the decision making of business organisation effectively
(Meyer, Neck and Meeks, 2017). Due to changes in the market policies and trends this provide
better perspective for business to exploit their resources and increase the efficiency to become
competitive in the market.
Disadvantages
This tool discourages business to invest in e market as it provides detailed information
about all the factors which confuses the leaders of business to expand in new market. Many
business do not use this tool as it is very time consuming and also uses lot of manpower to
perform this research in the external market depending I the size of the market.
Porter’s Five Force Model
This model provides business to analyse all the factors which analyses the industry
attractiveness and it focuses on micro business environment. This model provides information of
competiveness of the business to examine the degree of threat due to high completion in the
industry. As the increase in globalisation and open market the usefulness of this model is also
increasing to develop effective strategies which reduces the threat and motivates company to
increase growth in market effectively. This model facility high efficiency in determining the
uniqueness of business to attain higher profit margins and compete in market to achieve core
competency effectively.
Advantages
This model helps to analyse the market competition and improve the efficiency of the
company to develop better strategies to compete and reduce all the threats in the market
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effectively (Trigeorgis and Reuer, 2017). This also improves the relationship with suppliers and
customers to increase the sales and profit margins effectively.
Disadvantages
This is not analysed effectively as all the factors are not identified in this model. And this
is mainly applicable in the perfect market industry which is not realistic.
Application of Strategic Management Models and Tools
Burberry uses the tool and models to develop strategic planning to decrease its
competition in market and also gain higher profit margins effectively.
SWOT
Strengths
High brand value of Burberry help company to gain higher premiums on products and
also attract more customers to the business effectively. This also increases the retention power of
the company foe customers effectively. `company is also very effective due to strong retail
network in UK market.
Weaknesses
Expensive products with comparatively low quality is also reducing the market image of
the company and reducing the sales gradually. As company is also providing limited products to
its customers which reduces the potential to attract all the customer segments.
Opportunity
Due to change in customer trends Burberry can develop effective marketing strategies to
increase the customer satisfaction by developing effective products (Hill, 2017). Due to highly
potential developing markets company can also expand in those market to increase the size of
company and gain higher profits effectively.
Threats
Duplication of the products of Burberry is a huge threat to the company ad customer are
preferring the low priced products which can also increase the sales in the market adversely.
PESTEL
Political
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Due to Brexit this impact the sales of Burberry as government increases the trade
policies. Company also gained information to stop investment in the UK market due to unstable
poetical condition which can further impact business activities.
Economic
Brexit create economic recession in the market and increased taxation and high inflation
rates in the market reduced the efficiency of company to produce effective products to satisfy
customers which also reduces the brand value in the market (David and David, 2016).
Social
Increase in unemployment rates also impacted business as this reduced the income level
of customer in the market and declined the net disposable income due to change in the lifestyles
which influenced company to decrease its market share and profitability.
Technological
Burberry is using high effective technology which also helps the company to promote all
the factor and increase brand value in the market effectively.
Environmental;
Increased environmental concerns like global warming has impacted the company due to
increased environmental taxes which impacted the profit margins of the company (Lasserre,
2017),
Legal
Adoption of all the safety and security and employment benefits in the workplace also
increased the cost of company to manage all the employees and this also increased the risk to be
lawful in market.
Porter five forces
Threat of new entrants
There a is low threat of new entrants as the company is very larger and also has higher
experience in the market. As the company is operating in different markets and has high revenue
to invest and innovate their products to increase their quality effectively.
Bargaining power of suppliers
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As fashion industry is very large and it has high number of suppliers in the industry
which reduces the power of suppliers to increase the cost of Burberry in the market. Company
also provides different types of products to create backup supplier chain to reduce the threats.
Bargaining power of buyers
Power of customers is very high in the market due to high completion ion UK in the
fashion industry which also increased the threat for company (Ginter, Duncan and Swayne,
2018). As company need to develop more products which will increases the choices of customer
and retain them effectively and reduce the power of customers effectively.
Threat of substitute goods
Due to high competition this threat for Burberry is high and company can reduce the
threat by innovating their products and increasing eh quality with low prices which increases the
loyalty of customers in the market.
Threat of existing competition
UK market has very potential competitors who have the efficiency to innovate and reduce
the market share of Burberry (Rothaermel, 2016). Company need to adopt diversification and
sustainable products and economies of scale can reduce this treat to increase the market share of
the company in the market and achieve higher profit margins effectively.
Importance of Change Management
Change management is the process of analysing the market trends and adopting all the
changes which are required to be in the completion and gain better profits to sustain in the
market effectively. As the fashion industry is increasing its competition there are many different
products which is offered to customer according to their needs and wants and this also impacts
the market share of Burberry negatively. It is very essential for business adopt change
management strategies to reduce the cost and increase the performance to attain core competency
in the market again. Change management to transform the organisation by upgrading all the
internal factors and analysing the strengths which support the transformation effectively. This
also help to develop organisational structure to increase the communication and increase the
healthy working environment effectively (Ansoff and et.al., 2018). By adopting technology, it
reduces the cost of operation and also increases the performance of organisation to reduce all the
issues internally. This also helps the company to compete with the market with latest technology
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and make effective decision. Change management also reduces the traction between the activities
and focuses on the increased value of products to increase customer satisfaction and market
completion effectively.
CONCLUSION
This report concludes that it is very essential for business to understand their strategic
models and tools which can help business to make effective decisions and achieve objectives
effectively. Report explained the importance of analytical tools which helps business to identify
strengths and weaknesses and reduce their threats and attain opportunity effectively. With the
help of SWOT company analyses internal factors and integrated it with external threats and
opportunities to attain profit margins effectively. PESTEL analysis helped business to understand
all the macro environment factors which impact business activities. Porter’s five force model
examined competitiveness of company in the market to formulate effective strategy and attain
competitive advantage effectively. Report provided explanation on importance of change
management in the organisation to compete in market and increase profit margins effectively.
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REFERENCES
Books and Journal
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Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill Education.
Ginter, P.M., Duncan, W.J. and Swayne, L.E., 2018. The strategic management of health care
organizations. John Wiley & Sons.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
David, F. and David, F.R., 2016. Strategic management: A competitive advantage approach,
concepts and cases. Pearson–Prentice Hall.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic
Management Journal, 38(1), pp.42-63.
Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship‐strategic management
interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Newburry, W., Deephouse, D.L. and Gardberg, N.A., 2019. Global aspects of reputation and
strategic management. Global Aspects of Reputation and Strategic Management, pp.1-20.
Okumus, F and et.al., 2019. Strategic management for hospitality and tourism. Routledge.
Zhao, E.Y and et.al., 2017. Optimal distinctiveness: Broadening the interface between
institutional theory and strategic management. Strategic Management Journal, 38(1),
pp.93-113.
Baumgartner, R.J. and Rauter, R., 2017. Strategic perspectives of corporate sustainability
management to develop a sustainable organization. Journal of Cleaner Production, 140,
pp.81-92.
Certo, S.T and et.al., 2016. Sample selection bias and Heckman models in strategic management
research. Strategic Management Journal, 37(13), pp.2639-2657.
Durand, R., Grant, R.M. and Madsen, T.L., 2017. The expanding domain of strategic
management research and the quest for integration. Strategic Management Journal, 38(1),
pp.4-16.
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