Burberry: Comprehensive Analysis of Info and Technology Strategies

This report provides a comprehensive analysis of Burberry's information and technology management. It begins with an introduction to the brand, its history, and its market positioning within the luxury fashion industry, highlighting its competitors and competitive advantages. The report then delves into a PESTEL analysis, examining the political and technological factors influencing Burberry's operations, including the impact of Brexit, social media, e-commerce, and the adoption of AI. Following this, the report applies Porter's Five Forces model to assess the competitive landscape, considering the threat of new entrants, bargaining power of buyers and suppliers, and rivalry among existing players. Finally, the report explores Burberry's value chain, outlining the primary and support activities that contribute to the company's value creation process. Overall, the report offers a detailed understanding of Burberry's strategic approach to information and technology, its competitive environment, and its value creation processes.

Managing Info and Technologies
Burberry
(Assignment 1)

1.0 Introduction
“Headquartered in London, England Burberry is a British luxury fashion
house. Burberry was founded in 1856 by Thomas Burberry 21-year-old,
a former draper's apprentice, he opened his own store in Basingstoke,
Hampshire.”
“Thomas Burberry originally focused on the development of outdoor
attire, then they move into the high fashion market developing a fabric
called Gabardine which is completely breathable and waterproof, and
exclusively made for the brand”. In the year of 1891 the company open
they first shop in the Haymarket London, nowadays with stores open in
59 countries. Until 1955 Burberry was an independent family-controlled
company, then was reincorporate. In 2005 the GUS plc become
the company's former majority shareholder.
“Burberry is listed on the London Stock Exchange and is a constituent
of the Financial Times Stock Exchange 100 Index which is a list with the
highest market capitalisation. In 2015, Burberry ranked 73rd
in Interbrand’s Best Global Brands report, alongside Louis Vuitton
and Prada”.
“The company main fashion house focuses on distributes ready to
wear, trainers, fashion accessories, fragrances, sunglasses and
cosmetics”. “Burberry has positioned its brand in the mind of consumers
to be functional luxury.” “
They maintains a product line with great width and depth consisting of
many products.”Their products fall into one of the two main categories:
fashion or continuity”. “Fashion products are designed to be responsive to
fashion trends and are introduced on a collection-by-collection basis.”
Continuity products have life cycle that are expected to last for a number
of years.””Burberry also has three primary collections: womenswear,
menswear, and accessories.” “With so many different products offered in
different collection and the fashion versus continuity of Burberry products
the product mix is very great, and this contributes to the positioning of
the brand.”
“Burberry has many competitors that include: Coach, Polo, Armani, and
Gucci.” “Relative to that of Burberry competitors, they have positioned
themselves very well in the mind of consumers.””Coach primary
positioning is on handbags, but also they have accessories that range
from watches and shoes to scarves and dog collars.””Coach is not even a
player in the top 10 luxury good players, is just simple more affordable
and more accessible to the general population.””Polo’s marketing
positioning is centred more towards clothing.””While Polo was a number
two player in the top luxury brands, has a great brand equity and is well

stablished in the mind of consumer, they have lower price then Burberry.
””Armani, another competitor of Burberry, place 8th in the top 10 global
luxury goods, only focus on apparel the brand and maintains a strong
luxury position on the market.””Gucci is also place in the top 10 global
luxury goods but his marketing position is towards luxury accessories,
they captured 12% of the accessories market share and where the
highest price brand for accessories.”
“Overall, Burberrys competitive positioning is suitable over the long
term.””While brand like Coach and Gucci focus more on accessories and
Armani and Polo focus more on the apparel market, Burberrys has
succeeded penetrating both the accessory and apparel market while
remaining a luxury good.””
2.0 PESTEL
“The main purpose of PESTEL analysis is to understand what external
forces may affect your organization and how those factors could create
opportunities or threats to your business. PESTEL analysis help you
understand current external influences on the business so you can work
on facts rather than assumptions.”
2.1 Political Factor
“The political factors in the Burberry PESTLE Analysis can be explained
as follows:”
“Burberry operates, across the world and not just in London. Since it
operates on a large scale in these countries, it needs to abide by the
various rules and regulations laid down by the various countries.””The
higher the political stability in a country, the better it is for ease of
operations.”’Brexit has left behind a uncertain environment, where the
companies functioning in the country are under the dilemma as to what
are the rules that will change, and what will be the effect of the same on
their profitability, Investors has reduced their investments in these
countries, since there prevails a uncertainty regarding the change in
regulations.””Burberry’s business is impacted by several political factors.”
“The high tax rates imposed by certain companies on foreign goods has
led to increase in the cost, leading to a lower profitability.””In certain
developing and underdeveloped countries, there are various first copies
of the brand available, that further affect and disrupt the sales to some
extent.” These countries are the ones where the rules and regulations
related copying of products is lenient.”

“Meanwhile, Brexit brings benefit to Burberry that enhanced the notion of
Britishness and the brand image of Burberry (Marian 2016).”
(Burberry® Official | British Luxury Fashion & Beauty, 2021)
2.2 Technological Factor
“ With changing trends, Burberry has managed to stay up to date.”
“Various social media platforms that are utilized by the brand, to enhance
its image, and improve sales.” “The company believes in working in
synergy with the social media today will help one stay in the competition.
If this feature of sales is missed, then it is only a matter of time, for a
company to become obsolete.” “Online shopping is another aspect that
Burberry focuses on. “The use of various e-commerce platform to
increase its reach, various social media platforms to generate reviews of
its products, and the use of various analytics in order to predict the future
trends based on the current scenario and need.”
“If the company is willing to stay in the market for long, it should focus on
introducing AI into its retail segment, that may assist the shoppers with
their shopping.”

“The internet is increasingly important to luxury sales.”(BOF 2014)
Technology improvement allows the organization to operate more
efficiently, Solis (2013) states that “Burberry World “ visualizes its image,
culture and heritage across different devices, even if consumers do not
come to the physical store . It strengthens the marketing and brand
through digital media. The Big data can also help to track consumers
behaviour and preference. In 2016 Burberry become the first luxury
brand who uses “Snapcode” to enhance the shopping experience. By
scanning the code, consumer can unlock the product information from
their phone (Business Source Complete 2016).
“Burberry, is joining forces with Farfetch, an online fashion retail
platform, to expand its global reach to more than 150 countries.”
“According to the Financial Times, analysts at RBC Capital Markets
have estimated that nearly 10% of total global luxury sales are now
generated online” – and this is expected to grow to 20% by 2025.”
3.0 Potter’s five forces
“Porter's Five Forces is a model that identifies and analyses five
competitive forces that shape every industry and helps determine an
industry's weaknesses and strengths.” “Five Forces analysis is frequently
used to identify an industry's structure to determine corporate strategy.
Porter's model can be applied to any segment of the economy to
understand the level of competition within the industry and enhance a
company's long-term profitability.” The Five Forces model is named after
Harvard Business School professor, Michael E. Porter (Porter's 5
Forces, 2021).”
“Porter's Five Forces is a business analysis model that helps to explain
why” various industries are able to sustain different levels of profitability.”
“The model was published in Michael E. Porter's book, "Competitive
Strategy:” Techniques for Analysing Industries and Competitors" in 1980.”
“By understanding the Potter Five Forces in great detail Burberry Group
Plc’s managers can shape those forces in their favour.”
“Porter's five forces are:”
1. “Threat of New Entrants”
2. “”Bargaining Power of Suppliers”
3. “Bargaining Power of Buyers”

4. “Threat from Substitute Products”
5. “”Rivalry among the existing players”
3.1 “Threat of new entry’s”
“The threat of new entry is medium-low as the luxury brand need has
sufficient capital and resources to support and build the wafer fabs as
acquiring equipment is extremely expensive.””The age of the top luxury
brand is 129 according to Branz (2015), as a result , the threat of entry
for heritage brand Burberry is low and is difficult to compete with it
directly.”
However new entrants in “Personal &Household Goods brings
innovation, new ways of doing things and put pressure” on Burberry
Group Plc through lower pricing strategy, reducing cost and providing
new value propositions to the customers.” “Burberry has to manage all
these challenges and build effective barriers to safeguard its competitive
edge.”
Burberry can control this threats by introducing new products and
services, that not only brings new customers but also give old customers
a reason to buy their products.”By spending money on research and
development and building economies of scale that can lower the fixed
cost per unit.”By doing this Burberry “reduce the window of extraordinary
profits for the new firms thus discourage new players in the industry.”
3.2 Bargaining Power of Buyers
“In this case, the buyer’s power is relatively high in the fashion industry
under which Burberry is operating.” “This is “because the number of large
players is increasingly making it possible for buyers to switch into brands
produced by others companies.” However,”most of the new entrants do
not have differentiated products as compared to Burberry Company.” This
“provides Burberry a competitive advantage over its competitors because
of costumers brand loyalty.” In ‘addition, the buyers are well informed
about the product produced by Burberry.”This “tend to influence their
power.” Moreover,”economic forces such as inflation or the impact of the
new virus Covid 19 may affect buyers power whereby and the buyer
power tend to be low as they become more sensitive to higher prices.

3.2 Bargaining Power of Suppliers
“The number of suppliers in the industry in which Burberry Group Plc
operates is a lot compared to the buyers. This means that the suppliers
have less control over prices and this makes the bargaining power of
suppliers a weak force.”The product “that these suppliers provide are
fairly standardised, less differentiated and have low switching costs. This
makes it easier for buyers like Burberry Group Plc to switch suppliers.”
“The industry in which Burberry Group Plc operates is an important
customer for its suppliers.” This “means that the industry’s profits are
closely tied to that of the suppliers.” These “suppliers, therefore, have to
provide reasonable pricing.”
Due to Covid 19 the “disruption across the supply chain was also
severe, as leather-goods manufacturer Burberry Manufacture, the
brand’s trench coat factory in “Castleford and a major global distribution
centre in Italy all closed their doors in March.’ American and UK logistics
hubs remained operative but with reduced hours.” It can “have multiple

suppliers within its supply chain.” For example, “Burberry Group Plc can
have different suppliers for its different geographic locations.” This way it
can ensure efficiency within its supply chain.”
4.0 Potter’s Value Chain
“A value chain is a series of activities carried out by a company to
generate value for its customers. ” Potter suggests a general-purpose
value chain that business would use to analyse all of their operations
and see how they are carried out defines cost and income, this tool will
assist you in understanding the sources of value for your business.
“The more value an organization creates, the more profitable it is likely to
be. And when you provide more value to your customers, you build
competitive advantage” (Potter 1985).
Instead of focusing on divisions or accounting expense forms, Potters’
Value Chain examines processes and how inputs are transformed into
consumer-purchased outs. Potter represented a chain of activities
common to all companies which he dividend into main and support
activities.
4.1 Primary activities.
The physical development, distribution, repair, and support of a product
or service are all primary activities. They are made up of fallowing:
 Inbound logistics covers all internal procedures for
receiving, storing, and transmitting inputs. Your supplier
partnership is critical to generating value in this situation.
 Operations are the task that turns inputs into outputs that
are marked to consumer. Your operational systems generate
value in this sector.
 Outbound logistics entails the delivery of the product or
service to a client. These systems include elements like
collection, storage, and delivery, and they can be internal or
external to your business.
 Marketing and sales are the strategies you use to convince
customers to buy from you rather than your rivals. Here the
meaning comes from the benefits you have and how well you
express them.
 Service these are activities that keep your product or service
valuable to your consumer after they bought it.

(Mindtools 2019)
4.2 Support activities
These tasks help to support the above-mentioned primary functions. The
dotted lines in our diagram illustrate how each support, or secondary,
operation will contribute to each primary activity. Procurement, for
example, assist operations with certain tasks while also assisting
marketing and sales with others.
 Procurement is the process by which a company obtains the
services it requires to function. This involves locating suppliers
and negotiating the best possible rates.
 Human resources management refers to a company’s ability to
attract, hire, train, inspire, reward, and retain employees. People
are a major resource of value, so good HR practises will give
company a significant advantage.
 Technological development “are activities related to managing
and processing information, as well as protecting a company’s
knowledge base, are all part of technological growth.” Value is
created by reducing information technology cost keeping current
with technological advancements, and ensuring technical
excellence.
 Infrastructure refers to a company’s support systems as well as
the functions that enable it to run is day to day operations.

Accounting, legislative, administrative, and general management
are all examples of critical infrastructure that companies may
benefit from.
Through inbound logistics, Burberry adds value to the commodity right
at the start of the value chain. Burberry set a high standard for ethics
and sustainability for its manufactures with the introduction of “Burberry
Beyond” (Burberry 2013). To ensure that these requirements are met,
the organisation conducts both scheduled and unscheduled audits. Wool
and others materials, as well as manufacturing plants, where purchased
to ensure that the entire process is future proof.
Marketing and sales have a huge impact on value because the brand
reaches out to a lot of customers in new ways. To online shopping is a
must-have in today world, Burberry use social media to communicate
with its customers and incorporates 3D holographic fashion sales into
their sales strategy. With more and more people shopping online,
customers are appreciating iconic brands that are becoming newer.
Technology development, almost all value chain operations in today’s
technologically advanced era depend on technological support.
Burberry Group Plc must recognise the value of technology
advancement because of the technical integration in manufacturing,
delivery, marketing and human resources activities. It can be divided in
two categories: product and process technical advancement.
5.0 Conclusion
In the luxury fashion industry, Burberry the British heritage brand is a
major player. With the transaction the online shopping the brand agreed
to reposition itself towards digital technology in 2006, with the aim of
being a dominant force in the digital space rather than just a player.
Their growth has been astounding, thanks to the use of artificial
intelligence and big data to improve customers interactions and sales.
Using Big Data, Burberry was quick to recognise that consumers were
willing to share personal information if it improves their life. Customers
were encouraged to provide personal information by signing up for
loyalty and incentive services, which took advantage of this
development. The data gathered was then used to make product
recommendations based on the customer’s preferences.
This isn't a new concept: businesses have been using consumer data to
facilitate customised offers for quite some time. Burberry, on the other
hand, went a step further by using a smartphone to share data with

supermarket assistants such as social media preferences and
purchasing history. So, the next time you go to a Burberry shop, the
salesperson can recommend handbags based on the last coat you
bought.
Previously, only online retailers could provide such a highly
customised shopping experience. The tactic, according to Angela
Ahrendts, then-CEO of Burberry, was to make "walking through our
doors feel like walking through our website."
The luxury brand's repeat customers increased by 50% as a result of
the digital transformation, thanks to cutting-edge technology and a
seamless shopping experience.
Burberry was a forerunner in the luxury market when it came to
embracing modern technologies and platforms. It was the first brand to
use Snapchat's Snapcode feature and also had its own Apple Music
channel, putting it ahead of the pack. During London Fashion Week in
2016, the company also used Facebook chatbots to keep customers up
to date.
The business will not stop there, as it seeks new ways to revolutionise
technology in order to retain its status as a leader in the luxury market.
Burberry wants to use AI in other areas of the company, such as
manufacturing and product creation.
“Despite the fact that high-end fashion and technology are an impossible
combination, Burberry continues to prosper by providing its consumers
with an immersive e-commerce experience. It will be important to see if
more luxury brands join the AI bandwagon, and if AI becomes a
pervasive force in the luxury fashion world.”
“Today, it is not enough to launch a mobile site or invest in high-quality
imagery. After all, we now live in a digital era and there is no escaping
from it!”

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