The Business Model Of Burberry

This expansion demonstrates how the luxury industry is now run by massive corporations whose focus is only on growth, visibility, brand awareness, advertising, and most importantly, PROFITS! With growth and expansion, has come a decrease in quality and rarity. The luxury garments produced are mostly not handmade but are even outsourced to large factories in places such as China and Turkey. Also, to meet quarterly turnover projections, “designers churn(ed) out increasingly trendy collections of clothes, handbags, and shoes.” (Thomas, Pg. 246) With hundreds of new stores around the globe the surplus of designer labeled merchandise is immense hence, the proliferation of outlet malls.

United Kingdom is rich in different luxury and innovative brands, dealing with clothing and accessories of men, women, and children. Burberry is one of the leading fashion brands in United Kingdom. Burberry started in 1856 from England and recently it celebrated 150 years of quality and innovative manufacturing in the lifestyle goods and accessories. Burberry runs around two hundred and sixty stores operated directly. Furthermore, it is also famous for selling the manufactured products with a concession over a wide structure of 80 third-party controlled retail areas and wholesale dealing customers. Majority of the wholesalers associated with the firm are leading retailers in the field (Burberry, 2013).

In luxury marketing, there is a delicate relationship between 4 factors that most strongly influence the purchase of the luxury consumer. They are the exclusiveness of the brand, the reputation of the brand, forms of distribution and price/value affiliation. Exclusivity cannot always be ensured due to immense competition. But by consequence, it is not the key requirement of a luxury consumer. The consumer bases their

Gucci, a brand known for its quality, luxurious and royal association was confronted with strategic issues which made the company take notice of its strategy of expansion and brand personality. The company was not only having concerns with their product line but they were lacking unified corporate vision and strategy after its acquisition of some major names like YSL. Due to which they started having loophole in their luxurious goods market discipline. Strategic concern for the company was how does the brand image cascade down in the target market and how does it rejuvenate itself is a management lesson.

The author who inspired the topic of this thesis is Dana Thomas. As a fashion writer, Dana Thomas, has analyzed the changes in luxury fashion business. Thomas has been writing about fashion for the past twenty-five years in various journals such as Newsweek, The New York Times Magazine, New Yorker, Harper’s Bazaar, Vogue, Financial Times, and more. Dana Thomas’ two books, Deluxe and Gods and Kings, are the inspiration for this thesis. Deluxe: How Luxury Lost Its Lustre goes into great detail the secrets of the leading luxury industry brands, namely Prada, Gucci and Burberry, to showcase the “New Luxury” of today and how “luxury lost its luster” by featuring the manufacturing and logistical processes. Thomas exposes that many luxury brands use the same Asian factories that mass-market retailers employ, which raises questions concerning quality and craftsmanship for luxury brands.

It is hard to imagine that after the financial crisis swept across Europe, many great transitional enterprises had to face collapse and bankrupt while the luxury goods industry become more prosperous. Recently, the French luxury goods group LVMH announced their recent business condition. The volume of the first week in October had incredibly increased by 12% the previous week. The Hermes Corporation also said that in order to meet the increasing number of market demand, it would open 15 branch stores in the latter half of the year. These aroused some fierce debates, the public held a skeptical opinion towards the questions: How can the luxury companies maintain their positions? Why didn’t they strike down by financial crisis?

In the luxury goods industry, the rapid development has brought the market more brands and the latest design products. Industry matures has caused the accelerated development of a wide range of luxury goods (Chiari, 2009). However, one thing was constant, no matter how much increased production costs, the large luxury brand of origin will not be transfer. Long cultural history is an integral part of the luxury brand, and the origin of products have also brought a certain cultural value for luxury goods (Heine, 2012).Especially for Asian consumers, it seems that in the far west, craft superb tailoring and rich cultural history of the western area are the pursue of Chinese consumers (Sombart, 2001).Louis Vuitton 's president has said that (2013), “when customers buy our products, they expect Western quality. The mystery of the origin of our brand is closely linked with our brand”. Although with the close of trade, many luxury goods in the production and sales process will cooperation with other country’s companies, the final product definitely launch in the country of origin. Gucci is a legendary brand in Florence (Italy), and it will also strictly control the production done in Tuscany (Italy), to ensure pure and high-quality products (Gucci, 2015). Therefore, a regional feature has brought an intangible value and more local cultural characteristics to the luxury goods.

Burberry can expand its business in the Asian markets. In these markets there is a great demand of luxury brands. The fashion sense and fashion houses are growing rapidly in these markets. The brand can expand its business in these markets which will result in growth and development of its international market share and overall profitability. In Indian markets the brand can seek more profit and values. Fashion market of India is continuing to increase with the times and living standard of people is also enhancing day by day. Thus, there is a great demand of quality luxury products in Indian markets (Chang and Li, 2013). The company can target Indian markets to expand its business.

The weakness of Burberry is the premium price range of their products. Burberry faces a dilemma. Many consumers love the company’s products such as coats, clothing, and bags but they can’t afford to pay for the full price. Others, like Findlay, could afford the price but aren’t moved enough by it to actually pay out their cash. The pricing of goods or services can represent their quality and desirability.

The Burberry 2011 Annual Report does in general meet the conditions of the Combined Code. Beginning on page 66 is the Director's Report. This section extensively reports on the Board of Directors, including their biographies, the corporate governance statement, information and financial reporting, relations with shareholders and other elements of the Board's function. The Board provides leadership for the company with respect to its internal control. The Audit Committee is responsible for this internal control. There are five members of the audit committee, and they are all independent.

Burberry, founded in 1856, is a leading international luxury brand. Burberry designs, manufactures and licenses apparel and accessories for distribution through its own stores and network of prestige retailers worldwide. In early 1998, the new management team at Burberry set out its strategy to reposition and revitalise the brand, which resulted in significantly improved results and strengthened the base to build the business. With continuous growth since last five years, Burberry has faced new challenges of brand sustainability and positioning in a volatile industry (fashion) where customer behaviour is unpredictable. Thus, it requires a strategy that lays foundations for long-term growth and addresses the issues

Burberry has had amazing growth in the luxury sector with increases in revenues of more than 17% in the first six months to September 2010 (Burberry Group PLC, 2010). These results were the consequence of pointing their efforts and energy in the right direction, with strategies such as “leveraging the Franchise”. As part of this strategy and to optimize their presence in the Asian Markets, Burberry has decided to enter into China as an emerging market. However, this SWOT

Bulgari could provide strong support for Louis Vuitton Moet Hennessy Group to grab emerging market. Bulgari’s product has established the market abroad and held a place in emerging markets. Bulgari entered the Chinese market in 2003 and captured the largest market share rapidly, the selling condition ranked fourth in 2011. Bulgari owns a positive market foundation in the Chinese market that will assist Louis Vuitton Moet Hennessy Group to capture Chinese luxury market, especially the rapid growth of the watch and jewelry business, and as a fulcrum, leveraging the Group's overall business, and to this effect to enlarge the global competition with other luxury brands.At the same time, Louis Vuitton Moet Hennessy Group offer Bulgari more selling distributions and channels.On the other hand, in combination with Louis Vuitton Moet Hennessy Group greatly enhanced Bulgari’s watch and jewelry business, significantly improved its cosmetics and perfume

When Burberry brand became licensed across a range of categories, the price,design,and quality of products were not being looked at anymore. In Asia, wholesalers sold the products to unauthorized distributors, who then sold the products at prices, channels, and locations without respect to the brand image and because of that Burberry started to

Customers are pulled towards brands with the promise of becoming part of an exclusive community. This creates a sense of great desire to purchase luxury branded products. For example, Hermes, which specialises in leather, lifestyle accessories, fragrance, ready to wear clothing as well as other luxury goods, will not allow customers to buy their iconic handbags until they have formed a long-term relationship with the brand itself (Grigorian and