Published on February 20, 2014
INDEX The brand…………………………………. Pg. 3 Mission, Vision and Value chart ...……... Pg. 4 Competitors analysis………………………Pg.5 SWOT…………………………………...….Pg.6 PEST and BCG Matrix..…………………..Pg.7 5 forces analysis…………………………..Pg.8 The product and the market………….…..Pg.9 7.1 Contribution margin……………………Pg.9 8. Sources….…………………………………Pg.10 1. 2. 3. 4. 5. 6. 7. 2
The Brand. Burberry is a luxury hause from Britain which manufactures clothes and fashion accssesorie. Was founded by Thomas Burberry in 1856, he opened his first store in Basingstoke. Its focus was to create outwear that would expand the boundaries in which a human body can experience, thanks to this he was very recognized. Burberry has now become a leading clothing luxury brand with a large global business. Burberry is well known for its unique British heritage, positioning into luxury arena, integrity of the outerwear depending on the principles of quality, function and modern classic style. In 1904 Thomas register the logo brand with a horse, even though the logo did not appear in the clothes till 1920. In the 70’ Burberry has a great expansión of all type of products. Rose Marie Bravo was externally hired as CEO in 1997 and during her years at the helm she staged a turnaround and put the brand in the runways. Her approach was to focus on the luxury womenswear market and only license and sell Burberry to luxury retailers such as Saks and Neiman Marcus. In the next year the italian Roberto Menichetti asume the creative control of the brand. Burberry maintained its commitment to diversity and equal opportunities in recruitment. Nearly 10,000 associates from over 100 countries are now employed across all continents, with an age span from 16 to 77 Burberry is a worldwide company and has a structured product offering and has seen growth across each of these business areas. For 2012/13, accessories represented 39% of retail/wholesale revenue, womens 33%, mens 24% and childrens 4%. Burberry turnover is £1,999M (+8%) (March 31 3013 Annual Report). The team investes in strategic initiatives with longer-term horizons: Integrating beauty. Transitioning the Japan legacy. Reinforcing the supply chain. 3
MISSION AND VISION STATEMENT MISSION Burberry is a luxury brand, which is recognized internationally with a worldwide distribution network. The mission of the company is to maintain its integrity and vitality of their brand, at the same time, continue to develop the business, which remains relevant to ever evolving markets and consumer tastes. This mission statement shows that the brand mainly emphasizes on the integrity, which is maintained from a long time keeping in mind the current demands and choices of the customers. They also believe in developing the business in every possible global markets. VISION To be the first company who is fully digital and to build a social enterprise. Value chart Physical Organizational High quality. Charity. Quality of services Regularity Desirability. Clear communication. Integration. Discipline Psychological Ethical Passion Devotion. Creativity Excellence Exclusivity. Trust. Honesty Service of society. 4
Competitors analysis Gucci Direct Access to raw materials Raw materials quality Customer response time (personalization of fabrics) Strenght of Customers’ Partnership Commercial Push Balance of man collection (summer vs winter) Balance of Ladies’ collection (summer vs winter) Market orientation (quickness in responding to market input) Product quality Reliability on declared composition of fabrics On time delivery standars Production (and product) technology Manpower (blue collars) profesional standards Prada Ralph Lauren Yes High Fast Yes High Medium Yes High Fast Medium High High Storng Good Strong Good Strong Good High High Good Average Average Average High High High High High Medium High Standard Medium Standard Medium Standard High Standard High 5
SWOT Strength 1. Huge network of retail, wholesale and licensing channels globally 2. One of the biggest fashion houses in UK offering clothes, perfumes, beauty products etc. 3. Granted Royal Warrants by Queen Elizabeth II and the Prince of Wales. 4. One of the most valuable companies in the world owing to its legacy 5. Good advertising and brand presence in Europe specially England 6. Associations with international celebrities to reach out to the customers Opportunity 1. After collaboration with other brands, the brand hopes to make fashion more affordable. 2. More advertising and marketing would increase visibility. 3. Global expansion would help the brand grow worldwide. 4. More celebrity endorsements . 5. Host more Burberry shows in different cities. Weakness 1. Due to Burberry’s positioning it is very much accessible in the high-street, and has a low couture presence. 2. Not accesible to the working class those who aren´t as wealthy could also be seen as a strengh. Threats 1. Competitions from other big brands. 2. The customers have a higher bargaining power and low switching costs. 3. Not enough stores in smaller cities. 6
PEST Political: Economic: Long-term stability. Double-dip recession. Taxation. Works on some emerging markets. Current global economy climate. Low unemployment. Inflation. Social: Technological Ageing population Growing population Income inquality Social media. E-commerce / website. Online promotions. Digital market / innovate. 7
BCG Matrix Analysis STARS: The trench coat is the star of Burberry´s products since it has a large market share in a fast growing clothing segment. Indeed, there is no other outwear clothing that has the prestige of the Trench Coat. It generates cash, but because the market is geowing rapidly it also requires investment like revivals to maintain its lead. QUESTION MARK: Accessories are Burberry´s question mark. Indeed, although it stands for 39 porcent of Burberry revenue, this business unit has a small market shere in a high growth segment. It requires resources to grow and come up with an ït bag¨to achieve the star status. CASH COW: Check accessories sush as scarces are Burberry´s cash cows. Indeed, no other fashion brand have scarf, which is as highly recognisable, and that is such an entry-level product in a mature, slow growing segment. It requires Little investment and generates cash that has been used to develop othes product lines like clothing. DOGS: Licences products like eyewear, tablecloths and so on have a small market share in a mature industry. Although, it doesn´t require substantial cash, but it ties up capital that could better be deployed elsewhere. Therefore, it should be liquidate. RELATIVE MARKET SHERE 20 High MARKET GROWTH Low 0 10 High RELATIVE MARKET SHERE Low 0.1 8
5 Force analysis New enfants. Capital investment, e conomies scale. Consumers. Buyer power is not strong due to the substitution. Competitors Gucci, Ralph Lauren and Prada Suppliers. Distribution hub changed Subtitues. Competitors apply. The product and the market The iconic trench, is the core and key growth driver of Burberry’s apparel business. Non-apparel remains a key driver of growth, these are: Large leather goods Men’s accessories Shoes Burberry works on a very high quality of materials, they are a value pricing market Contribution Margin Variable cost £ 351 million - Net sales Contribution margin £1,280million £ 929 million 9
Sources. Burberry annual report 2012/2013 http://www.iseg.utl.pt/aula/cad602/Analise_Burberry_200403.pdf 12/01/14 12:52pm Date of publication: 3th march 2004 http://www.vogue.es/moda/modapedia/marcas/burberry/116 8/01/2014 8:02 pm date of publication: Is not expecific. http://bianirys.blogspot.it/2012/09/chapter-1-history-and-missionstatement.html 8/01/2014 8:10 pm Date of publication: 5th September 2012 http://burberrymarketing100.blogspot.it/2013/02/ch-1-overview-of-marketingbrief.html 8/01/2014 8:30 pm Date of publication: 5th February 2013 http://www.slideshare.net/MadhuMalesh/strategies-at-burberry 9/01/2014 11:43 pm Date of publication: 7th November 2011 http://www.youtube.com/watch?v=tpjMWNF9JqY 11-01-2014 13:23 pm http://prezi.com/explore/search/?search=burberry#search=burberry&reusable =false&page=1&users=less 12/01/2014 7:09pm Date of publication: 8 January 2014 http://www.burberryplc.com/investor_relations/results_and_presentations/inter im_results_centre 21th Jan 2014 2:57pm http://www.slideshare.net/adeptfouralex/innovative-marketingcommunications-at-burberry?from_search=6 21/01/2014 3:14pm Date of publication: 30/04/2012 http://www.wikinvest.com/stock/Burberry_Group_PLC_(LON:BRBY) 21/01/2014 4:02 Date of publication: 21/01/2014, 2:45 PM GMT 10
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