Analysis on key product categories. They want to

Analysis of Burberry’s industry and
company strategy

Your
analysis of the industry should
explore the forces that shape industry returns. 
These forces would typically include competitors, customers and
suppliers.  The analysis should also
critically explore Burberry’s strategy in the light of competitors’ plans.

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Burberry’s
strategy

Burberry has five key
strategies:

–         
Product
focus. Their focal point is on key product categories. They want to improve
store collections and make product offer less complex.

–         
Productive
space. Advance end-to-end retail disciplines to run retail output, through a several-year
retail superiority programme, which targets service improvement, customer
cultivation and investment in in-store activities.

–         
E-commerce
leadership. Carry on sector dominant innovation in rapidly growing channel.

–         
Operational
excellence. Advance the performance of the most important processes, achieving
savings through procurement, improving inventory management and ongoing to
invest suitably in technology and information.

–        
Inspired people.
Making sure company has remarkably involved employees with abilities and
potential desired to deliver its goals, with a focus on upgraded work
techniques of working.

 

 

Power
of customers

Power
of suppliers

Most of the Burberry’s fabrics, other
materials and finished products are sourced and manufactured at the company’s
owned facilities in the United Kingdom and through external supplier network,
which is predominantly located in Europe. The company has been sourcing cotton
from Peru for 30 years and they get cashmere from Mongolia.

Bargaining power od suppliers is moderate
because there is a high number of them and it’s not difficult to change from
one supplier to another, which positively affects Burberry. If there were only
a few suppliers which dominated the industry that would reduce the Burberry’s
bargaining power. However, changing suppliers is also risky because Burberry
risks getting lower quality.

Intensity
of rivalry

Burberry
competes mainly within the category of accessible luxury as well as
intermediate and unattainable luxury. Other brands in this category include
Salvatore Ferragamo, Prada, Louis Vuitton, Ralph Lauren, Christian Dior and
Michael Kors.

The british designer
is one of the revolutionaries who are slowly changing the fashion system as we
have known before. In September, a new fashion period began, with a number of
brands, including Burberry, entering a new model that allows customers to
purchase immediately after a fashion show. A bold move that only the biggest
companies can afford is a wave of speculation about what can bring us in the
future. A very different way of shopping and fewer opportunities for forgery.

 

In the same
year, Burberry was also one of the first fashion brands which got involved into
digital and social media, and they have fully embraced social media platforms.
They streamed their fashion show on Facebook, Youtube and WeChat.

 

LVMH’s
strategy is to strive for excellence across all each activity blended with the dynamism
and unique inventiveness of their teams. Their strategy is continual chase for
quality in their products and distribution.

 

Threat
of market entry

Threat
from subsitutes

The
threat of substitutes has three main factors: the price of substitutes, quality
of substitutes, switching costs for customers. It could be argued that there
are basically no substitutes for luxury products because each brand is unique
and cannot be replaced with another brand. Therefore, although non-luxury
products offer the same function as most luxury items, there are important
differences in brand perception. Another point of concern is the rise in global
shipping counterfeit goods from China. There are so called »Grade A«
counterfeit products from China which are almost identical to real products and
often only experts can tell the difference between a genuine and fake product.
Some consumers are not able to afford authentic items and tend to buy fake ones
which are similar in quality but at a bargain price. Nevertheless, the impact of
fake products on the luxury goods market is low due to counterfeit products not
evoking the same kind of elite status that genuine luxury goods provide. (NUS Investment
Society, Consumer Industry report on U.S. luxury goods).

The greatest threat of substitutes is from
their competitors in the industry. Consumer swithcing costs are low and rivals’
products quality is equal or superior.

 

 

 

 

 

 

 

 

 

 

https://www.elle.si/moda/londonski-teden-mode/

https://www.theguardian.com/business/2016/sep/24/burberry-reinvent-retail-from-catwalk-to-checkout-see-now-buy-now

https://www.researchgate.net/publication/304138881_Reshoring_A_strategic_renewal_of_luxury_clothing_supply_chains

 

(NUS
Investment Society, Consumer Industry report on U.S. luxury goods)

http://www.nusinvest.com/wp-content/uploads/2014/12/FA-Consumer-Industry-Report-on-US-Luxury-Goods-Sector-311214.pdf

 

 

https://www.businessoffashion.com/articles/news-analysis/burberry-unveils-grand-plan-to-become-a-true-luxury-player

 

http://money.cnn.com/2017/11/09/investing/burberry-stock-luxury-strategy/index.html

 

http://www.iasdr2009.or.kr/Papers/Orally%20Presented%20Papers/Design%20Management/Luxury%20Brand%20Strategy%20of%20Louis%20Vuitton.pdf