Innovation Audit of Burberry Group PLC: A Business Management Report

This report presents a comprehensive analysis of Burberry Group PLC's innovation management practices. It begins with an executive summary and an introduction outlining the importance of innovation in business, specifically focusing on Burberry as a case study. The main body delves into Burberry's organizational history, highlighting key innovations like the gabardine fabric and trench coats. It examines the company's existing innovation performance, including its financial performance, digital initiatives, and marketing strategies. The report also discusses the industry context in 2016, analyzing the impact of digital innovation. The report concludes with an innovation development audit, evaluating Burberry's strengths, weaknesses, opportunities, and threats, considering both internal and external factors. The report also looks at the company's use of marketing strategies, its ability to attract target customers, and its expansion of market share. The report also includes tables of content, various illustrations, and references to support the analysis.

Managing Innovation in
Business

Executive summary
Management of innovation it includes both term innovation and management that means
it includes all such activities or process that used to introduce something new. It may be a new
idea, product, marketing strategies, business process innovation that are used to gain competitive
position or advantage in the market. Burberry Group PLC is British company founded in 1856 by
Thomas Burberry and its headquarter is situated in London, England. It is a luxury fashion house
and mainly deals in trench coats, outdoor attire, fragrances, fashion accessories, cosmetics and
sunglasses. The company was established with a view to develop outdoors attire but in 1879 it
has build his own brand name gabardine that speciality is hard wearing and water resistance. It
has successful in building brand image and gain loyalty of customers in term of one of the
successful company in innovation of technology, offering valuable product. In this report
Burberry has been taken as company as its one of the successful companies in managing
innovation in business. The company has use various methodologies, information, business data
to identify various drives that are present within the business and environment. The company is
successful because of effective leadership and organization plan in order to innovate new ideas.
Knowledge of organization, inter relationship between various department also play important
role in assess innovation capabilities and blockage. The company with the effective functioning
of its research and development department is able to innovate new products and by the
effectively use of marketing strategies company is able to attract target customers. At last this
report conduct the innovation development audit for introduction of the new product or services.
The Innovation audit of Burberry Group PLC company is conducted to analysis and evaluates
history of organization innovation, its present level of innovation activities and the future
requirement of innovation by the company. The audit is conducted by the company while
considering its internal and external factors that affect in innovation of new product or in
marketing strategies. Burberry Group PLC by analysing and evaluating its strength and
weakness, various factor such as political, social economical, technological and environmental is
able to identify its opportunities and threats. Thus, it includes both wider macro and competitive
environment and downstream and upstream supply chain participants. Company by
differentiating and providing innovation, special feature's product is able to expand its market
share and charge competitive price from the customers.

TABLE OF CONTENTS
Executive summary..........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
The organization and Innovation History....................................................................................4
Organizations existing Innovation Performance and Capabilities...............................................7
The Industry in 2016....................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Innovation refers creative thought's which involves in various activities to bring out new
ways or methods. Innovation is basically dependent on innovate. It introduces new platform in
firm and offers opportunity to generate benefits but it can be critical for living, economic growth
and success in organization. It is important for organization because it supports organization to
penetration market faster and offers opportunity to improving market in domestic level and
international level. Innovation management is important in business because it introduces new
idea at workplace and supports to change goal in qualitative services. To understand
management there is an good example of Burberry company. It is a British luxury fashion house
company which is known as fashion company.
MAIN BODY
The organization and Innovation History
Burberry Group PLC is British luxury fashion company and headquarter establishes in
London, England. It is known for innovation and product differentiation. The organization itself
designs, create and trades number of products to customers. Thomas Burberry is the founder of
the company and it is established in 1854. It is public limited type of company which has main
aim to introduces innovative products and services around the world and keeps excited to
customers. It has 498 retail stores across the world and offers services worldwide. It comes in
73th ranks in inter brands and enlist on the London Stock Exchange. Products are accessories,
clothing, cosmetics and perfumes (Goffin and Mitchell, 2016) . The revenue of the organization
is approx £2,732.8 million and operating income is estimated approx £410.3 million. Number of
employees are 9,752who provides their services in organization. It has own website
uk.burberry.com. It is main fashion house which is focused on product differentiation such as
trench coats, outerwear, fashion accessories, fragrances, sunglasses and cosmetics. It keeps
various type of products so that each type of customer cover. It is luxury brand which is famous
globally around the world. The main mission is to maintain customer loyalty and vitality of the
brand in competition market. It also focuses innovation so that number of customer gets different
taste in products along with varieties. The vision of the organization to lead sustainable growth
and generates higher margins in predetermined time.

Burberry company Logo -
Innovation history of Burberry
Burberry is fast innovation company which has main goal to introduces different types of
products so that organization easy meet customers objectives and gets high revenue in company.
Heritage, craftsmanship and innovation are main part of the organization history. Burberry is not
only design and sells clothes but also invents gabardine, waterproof fabrics or cotton material.
Through the material organization make trench coat which is more famous in London. It is sold
first time in 1891 by Burberry store (Petraite, et.al, 2017). In 1891, organization manufactures
200 own brand stores around the world. While online business flourishing up above fourteen
countries by the helps of websites. in 1951 organization offers Burberry gabardine which is used
by car racers, military officers and aviator. It is special type of fabric which breathable and light
in weight. It is second innovation of Burberry in coats. In 1950 organization creates innovation
on cotton fabrics and provides iconic outwears for ladies and gentle man. Organization organizes
iconic advertising campaign for introducing this product. In 2006, organization introduces
digital innovation by corroboration with Apple company and shift mind incorporating in social
media so that large number of customers covers and retails products. Through the media
organization covers 20 different platforms (Hossain, 2015). It becomes famous as heritage brand
in global world. Due to high digitalization of products organization launches name “ Art of the
Trench Coat”. While in 2011 Burberry launches Burberry bespoke where permits visitors to
Illustration 1: Burberry's Logo
(Source:Burberry confirms boost in sales. 2018)

customizes own coat from the button to colour. In 2014, due to trench coat organization becomes
first luxury brand in comparison to other brands. Burberry offers own software Burberry app for
customers where they can buy clothes according to their choice at affordable price. Burberry
comes in other sites such as BurberryTwitters, @ BurburryServices. Thus, technology innovation
helps organization to innovate services and access customers objectives.
Trench coat innovation chart :
Illustration 2: Trench coat innovation chart
(Source: Diffusion of innovations graph. 2020)

Seasonal Advantage chart portfolio ( After Innovation) :
Illustration 3: Seasonal Advantage chart portfolio
(Source: The Seasonal Advantage Portfolio. 2020)

Organizations existing Innovation Performance and Capabilities
Burberry existing innovation strategy brand transformation along with new logo so that
number of customers gets excited and retain with organization. The main goal of the
organization to get first position around world and generates high margin on products. Through
the strategy company wants to take sustainable growth in competitive market. Beside of clothes
innovation organization trades another products such as cosmetics products. Digital innovation
leads effectiveness in product retailing and also influences name of brand. Due to digital
innovation technique Burberry enables to meet objectives and generates high revenue in
company. Burberry crates business model so that organization gets long term sustainable value
over the years. Burberry works on social innovation so that potential customers can achieve and
traded products more than 40 countries (Saunila, 2017). The financial performance of the
organization is quite good such as Burberry revenue approx was £2.7 billion along with 2%
constant exchange rate. While operating profit approx £437 million, up to 7%. Total margin of
products approx £105 million, thus organization enables to generate high margin on products
excluding cosmetics and accessories. Burberry retails their product in chain market which known
as fast growing luxury consumer market.
Illustration 4: Existing trench campaign
Source: ( 2010)

Burberry gets channel profit after collaboration with google who transform brands and innovates
software for cloth retailing. Organization retails their products through Burberry stores and
covers local peoples due to brand power organization enables to grow 4% in 2018. while
wholesale channel grows approx 1% in 2018. While digital channel supports organization to
increase purchasing behaviour of customers and grows approx 22% selling in 2018.
Interpenetration
It can be interpreted that organization gets financial profit in high range due to innovation
strategy. In 2016, organization introduces digital innovation in retailing sector by the
collaboration with Apple company who provides digital platform for clothes retailing. Digital
innovation supports organization for retailing products in large number of countries. Social
media influences brand name of Burberry. In 2016, organization generates revenue approx
£2,515 million and gets profit approx £418 million. In 2017, Organization uses customized
product strategy where customers can get coat according to their choice even colour and button
as well. This strategy helps organization to gain trust of customers, through the strategy Burberry
generates revenue approx £2,766 million. In 2018, Organization collaboration with Google so
that gets innovation in Digital technology and covers large population (Todorovic, 2016). Google
transforms digital platform and leads brands popularity on wide scale. Burberry offers various
software such as Burberry's Twitter “ Buy Now” button, Facebook, Instagram and @
burburry.com etc. these all software gives by google to Burberry. In 2019, Organization uses
digital socialization so that enables to take sustainable growth prolong time. Through the strategy
Illustration 5: Financial and operational performance
Source:(FINANCIAL PERFORMANCE & KPIS, 2019)

Burberry generates high revenue approx £2,720 million. Thus, financial performance of Burberry
is increased by and by over the years.
Capabilities
Burberry is luxury brand which is famous globally. Digital technology innovation improves
organization postposition in world. In 2009, “Art of the Trench” campaign launches by Burberry
in which offers wide variety of products such as apparels, beauty products, clothes and electronic
products. Organization has huge network of channel such as retail, wholesale and licencing
channel worldwide. 10.000 peoples are employed within company. Organization has wide scale
global presence around the world (Ross, 2020). For example organization has 5000 stores in fifty
countries and sells their products to customers through the channel i.e. retail & wholesale. Retail
channel generates 70% revenue while wholesale channel generates 27% revenue. Organization
has licenced agreement for trading products in japan and worldwide. Burberry has collaboration
with innovative companies such as Google, Apple. Both organization helps Burberry to innovate
product and provides digital services to customers. It focuses on product differentiation so that
each type of customers are covered. Organization has taken two royal warrants by Queen
Elizabeth and Prince Charles. Royal warrants are strength of Burberry which helps to improve
brand strength globally. Organization plans to trade their products in potential markets such as
Thailand, turkey, Egypt and Indian market, so that revenue of organization high up rather to
other competitive brands.
The Industry in 2016
In 2016, Burberry introduces digital innovation strategy in the company so that large
number of products retails across the world. Burberry launches “Mr Burberry fragrance” label
for apparel which increases sells of products approx 70% and generates high profits in Burberry
stores. Organization gets higher profit from Asian market because it is hub of luxury brands.
That why organization gets golden opportunity to enhance selling behaviour of customers. To
promote brand power organization adapts business model. Through the model organization
enables to align number of department in well-formed manner (Percoco, 2017). The main goal
of the model is to give attention each department so that organization achieves high revenue. To
influence brand value Burberry sponsor's celebrity endorsement so that number of customers
comes in trust and generates heigh profit margin on products. Organization adapts digital
technology so that understand customers demands and their expectation regarding product and

their services. To influence integrity of brand, Burberry receive royal warrant from Queen
Elizabeth and Prince Charles which influence brand power and easy to gain trust of customers.
The main goal of royal warren is to indicate that Burberry brand wears by foreigner celebrities.
This strategy helps Burberry to retain customers and reaches new potential customers.
Burberry offers own software app facility where number of customers can buy clothes
according to their choice on affordable prices. In this app compiles some features like chat box,
wishing list and complaint box. Through the features customers can take information about
product quality and issues as well. To enhance trust on brand offers calling system where
customer can complaint regrading payment issues or quality. These issues resolve by Burberry
team and increase trust of customers. Burberry offers discount on products on festivals which
keeps excited to customers and encourages their purchasing behaviours. Digital media helps
organization to scatter product lines worldwide. It is also uses RFID (Radio Frequency
Identification) and it is wireless communication which improves supply chain operations.
Organization uses RFID to innovate and develop unique design, high technology and luxurious
experience so that customers gets value of their money. In organization Celine boss macro
gobbetti becomes CEO of the 100 company (Gao, 2019). Bunbury adapts own social network
The art of the trench coat, which attracts large number of customers and influences trust on
Burberry brand. It gets threat from Amazon and online stores because number of customers are
connected with Amazonas and believes their services and products. Organization gets negative
impact on external factors such as political, environmental and economic factors. For example
Burberry is UK company which has restriction on trading because according to UK government
policies organization can't trade various countries that why organization gets negative impact. In
2016, organization enable to influences brand power in other countries.
CONCLUSION
This report can be concluded innovation and their importance in business where has been
concluded that innovation leads profitability for customers and generate high revenue in
company. Organization and its innovation history has been concluded. The report has been
concluded that organization applies various innovation strategy and innovate products over the
years. For example fabric innovation, digital innovation which influences brand popularity
globally. Innovation performance chart, the art of trench coat picture and seasonal advantage
portfolio chart can be concluded. It has been concluded organizations existing innovation

performance and capabilities. Financial profit chart has been interpreted in this report, In which
concludes revenue profit, operational profit and adjustment operational profit. It can be
concluded innovation performance of industry in 2016.