An analysis of Burberry, a luxury goods company, using 6 different frameworks to help identify strategies, as well as a SWOT (TOWS) analysis to uncover potential improvements of the company´s performance. Emphasis is set on strategies concerning the business environment, international strategies and an evaluation of value created by Burberry for its customers. After the TOWS a recommendation will be given that has the potential to increase performance significantly if used appropriately.
The following analysis will be based around three areas: 1) the environment Burberry operates in 2) the value they add to the products and 3) the strategies Burberry uses to compete internationally. A PESTEL analysis will be the start to determine external factors of the environment influencing Burberry´s business, following up on that will be Porter´s 5 forces model, to examine what the forces that influence the company and its competitors. To analyse the strategic capabilities Burberry has, a VRIO and a value chain will be used to see which activities add value to for the consumer. Lynch suggest that the model for modes of entry and Porter´s 4 international strategies are a good way to evaluate a company´s international strategies, so those will be used in a combination for this report.
Burberry PLC is a manufacturer, wholesaler and retailer based in London, which operates in the luxury sector and is selling apparel and non-apparel products on high quality standards. The company has about 10.000 employees in over 500 stores around the world. Its revenue in 2016/17 was about £2,8 billion and its EBIT close to £400 million, making it one of the strongest companies in the UK. Because of its high status and quality, it received two royal warrants from Britain´s royal family over the years giving the company high prestige and backing up their operations. The sector of luxury goods is a fast-paced, highly competitive with strong names such as Gucci, Luis Vuitton, Prada and Hermes. Designs change fast and so does fashion. As most of the large luxury companies, Burberry operates mainly in Europe, the US and Asia. The wealthy areas of central Europe with its high living standard, the rising number of millionaires in China and India and the constant need of luxury in the United States give all prestigious companies reasons to expand and do business in those regions.
Table of Contents
1. Introduction
2. Strategie Evaluation of Burberry
2.1 Environmental analysis
2.1.1 Focused PESTEL analysis
2.1.2 Focused Porter's 5 forces
2.2 Analysis of strategic Capabilities
2.2.1 VRIO analysis
2.2.2 Value Chain analysis
2.3 International Strategies
2.3.1 Modes of international market entry
2.3.2 Porter's 4 international strategies
3. TOWS - analysis
3.1 Burberry's Threat
3.2 Burberry's Opportunity
3.3 Burberry's Weaknesss
3.4 Burberry's strengths
4. Recommendation for Burberry's future
Reference list
Appendices
Appendix 1: PESTEL (Thompson etai 2017, pettinger 2004)
Appendix 2: Porter's Five forces model (Lynch 2015, Van Deusen et al 2007)..
Appendix 3: VRIO analysis (Lynch 2015, Johnson etai 2015)
Appendix 4: Value Chain (Johnson et al 2015, Thompson et al 2017)
Appendix 5: Modes of international market entry (Thompson et al 2017, Lynch 2015)
Appendix 6: Porter's 4 international strategies (Thompson et al 2017, Johnson et al 2015)
Appendix 7: TOWS - analysis
- Quote paper
- Marcel Strangmueller (Author), 2017, Economic Strategies. Potential Improvements of Burberry, Munich, GRIN Verlag, https://www.grin.com/document/417203
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