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TIMELESS
BRITISH
ELEGANCE
AUTHENTIC
CLASSIC
LOOK
KNIGHT
CHECKER
TRENCH COAT
Who else but...
Competitive Environment
● INDUSTRY: Apparel, Accessories, and Luxury Goods
○ Unattainable - Burberry Prorsum
○ Intermediate - Burberry London
○ Accessible - Burberry Brit
● MARKET STRUCTURE: Monopolistic Competition
● KEY COMPETITORS
Market Share
2013
Market Share
2012
Market Share
2011
Market Share
2010
Market Share
2009
LVMH 40.46% 42.13% 40.93% 41.90% 41.36%
Dior 39.71% 40.59% 42.60% 43.56% 43.03%
Ralph Lauren 7.21% 7.80% 7.54% 7.66% 8.49%
Prada 4.91% 3.80% 3.73% 3.33% 3.56%
Burberry 3.55% 3.38% 3.21% 1.78% 1.62%
Michael Kors 2.99% 0.86% 0.59% 0.41% 0.32%
Salvatore
Ferragamo
1.18% 1.46% 1.40% 1.37% 1.62%
Market Shares Capital iQ
Porter’s Five Forces
● True competitors have to compete with intangible assets
of the brand
● Brand Heritage
● High Quality/High Volume
● High-end Retail Space
● Most new entrants will not be true competitors
Threat of New Entrants
● Relatively limited
● Purchases are based on intangible value
● Time-sale sites like Gilt and Myhabit are increasing
buyer power
● Due to relatively uniform product performance there is
an inverse relationship between brand loyalty and buyer
power
Bargaining Power of Buyers
● Extremely Limited
● Significant competition among textile manufacturers in
Southeast Asia
● Low cost of input materials
● Low cost of labor
● China is protecting cotton prices
Bargaining Power of Suppliers
● Largest threat is other brands in the category of
accessible luxury
● Counterfeit goods may negatively impact brand integrity
● Accessible luxury goods may take a greater hit during
economic downturns
Threat of Substitute Products or
Services
● 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
Rivalry Among Existing
Competitors
www.burberryplc.com
Changes Coming
● Continuing growth after the worldwide economic slowdown in 2009
● Industry growth in China slowing down
○ 2% growth in 2013, was 7% in 2012
○ government regulations → anti consumption, more savings
○ shift from mainland shopping to online and/or abroad shopping
● Increase in labor wages (especially in China)
● Baby Boomers - to appeal to younger generations
www.qz.com
Company Imperatives
•£259.2 million profit ($428,000,000) in 2013
•50 new stores since 2009
•Strategic expansion
- Seek other manufacturing opportunities, possibility Mexico
-Improving global economy and increases in labor cost→ Price
Increase
- Focus on their digital leadership to capture the younger generations
Business Environment
● The Luxury Goods Industry - Exposed to a large set of external
factors.
● The industry suffered as the global recession hit over 2008 and 2009.
● Placing greater focus on the Asian Market!
● “Burberry is constantly leveraging the energy in its creative thinking
culture.” (www.burberryplc.com)
○ The company commits to phasing out all hazardous chemicals from
its supply chain by January 1, 2020.
STP
www.burberryplc.com
www.burberryplc.com
Marketing Mix
● Product
○ Gabardine - patented waterproof, anti-wrinkle twill
○ Patented Prorsum knight logo and check pattern
● Price
○ High end
○ Trench coat retails around $2,000
● Promotion
○ Digital Leader
● Place
○ Retail
www.burberryplc.com
Marketing
Performance
•Importance of brand image
•Social Media success
-17 million Facebook followers
•71% of revenue is from retail
www.prc.com
Action Steps
● Continue to invest in new and emerging
markets
● Produce a mobile application for
○ artofthetrench.com → increase awareness
○ burberry.com → increase sales
● Link all digital marketing tools together → easier sharing across all
platforms
● Seasonal new product development and product diversification
○ reach and grow in new markets
○ retain customer loyalty
Integration and Organization
● Market share has been constantly growing since 2009.
● Burberry operates in four regions.
○ Asia Pacific: 39% of retail/ wholesale revenue.
○ Europe: 30%
○ Americas: 25%
○ Others: 6%
● Expanding digital market.
○ Get closer to the customers and capture the younger generations
○ Save costs by looking into alternative manufacturing locations
○ Extend the brand’s online e-marketing to maintain a strong digital presence
■ 17 million likes on Facebook
■ 2.8 million followers on Twitter
■ 8 million viewers on YouTube
www.burberryplc.com
Thank you!
At this time, we will open
the floor for any questions.
Sources
● "Accelerate Retail-Led Growth." Accelerate Retail-Led Growth. N.p., n.d. Web. 09 Apr. 2014.
● "A Checkered Story." The Economist. The Economist Newspaper, 22 Jan. 2011. Web. "ART OF THE TRENCH TUMBLR." ART OF THE TRENCH TUMBLR. Burberry, n.d. Web.
● Ashton, Alexandra. "Innovative Marketing & Communications at Burberry." Innovative Marketing & Communications at Burberry. N.p., 30 Apr. 2013. Web. 02 Apr. 2014.
● "Best Global Brands 2013." Interbrand.com. Interbrand, 2014. Web. 19 Mar. 2014.
● "Burberry Chief Targets Mid-luxury." Ft.com. The Financial Times LTD, 13 July 2006. Web. 25 Mar. 2014.
● "Burberry Dedicates 60% of Marketing Spend to Digital." Marketing Jobs & Marketing News. N.p., n.d. Web. 09 Apr. 2014.
● "Burberry's Success Story - Salesforce.com." Salesforce.com. N.p., n.d. Web. 09 Apr. 2014.
● Cheeseman, Gina-Marie. "Burberry Commits to Phasing Out Toxic Chemicals from Supply Chain." Triple Pundit RSS. N.p., 13 Jan. 2014. Web. 09 Mar. 2014.
● "Consumer Goods." UK: Will Burberry's Strategy Change with Its Management? N.p., n.d. Web. 09 Apr. 2014.
● Flannery, Russell. "Where's China's Growth? Textile Industry Is Weaving Expansion." Forbes. Forbes Magazine, 28 Aug. 2013. Web. 25 Mar. 2014.
● “Great Brand, Great Company.” Burberry PLC. N.p., n.d. Web. 24 Mar. 2014.Bu
● "Group Overview." Burberry PLC. N.p., n.d. Web. 24 Mar. 2014.Bu
● Hsu, Tiffany. "Affordable Luxury Brands Are Booming in Popularity." Los Angeles Times. Los Angeles Times, 20 Dec. 2013. Web. 06 Apr. 2014.
● "Louis Vuitton, Marc Jacobs Ramp up Ad Spend as Market Improves." Luxury Daily RSS. N.p., 11 Oct. 2010. Web. 09 Apr. 2014.
● “Luxury.” Investor Words. n.d. Web. 18 March 2014. Lynn, Matthew. "Even Made in China, a Burberry Is Still British: Matthew Lynn."Bloomberg.com. Bloomberg, 11 Feb. 2007.
Web.
● "Mainland China Entering New Era of Luxury Cooldown, Finds Bain & Company's 2013 "China Luxury Goods Market Study"" Bain & Company. N.p., 16 Dec. 2013. Web.
● OCS Team. "The Key Apparel Market Segments." Online Clothing Study. N.p., 14 Dec. 2011. Web. 06 Apr. 2014.
● Outlaw, Kiera. "Global Handbag & Purse Manufacturing Industry Report C1312-GL."IBISWorld. N.p., Dec. 2013. Web.
● Roberts, Andrew. "Burberry Lags Luxury Peers as Buyers Won't Pay for Plaid." Bloomberg.com. Bloomberg, 13 Sept. 2012. Web. 06 Apr. 2014.
● Ruiz, Brandon. "IBISWorld Industry Report C1311-GL: Global Apparel Manufacturing."" IBISWorld. N.p., Nov. 2013. Web.
● Standard & Poor's Financial Services, LLC. S & P Capital IQ. McGraw Hill Financial, Inc, n.d. Web. 9 Apr. 2014. "The End of Cheap China." The Economist. The Economist
Newspaper, 10 Mar. 2012. Web.
● Wang, Lisa. "Luxury Sales." BOF. The Business of Fashion Ltd., 8 Oct. 2013. Web. 06 Apr. 2014.
● Wendlandt, Astrid. "Hermes Says Buying Power of Luxury Clients Unchanged." Reuters. Thomson Reuters, 02 Oct. 2011. Web. 25 Mar. 2014.
● "Will Burberry’s Big Spending Shift Become the Next Fashion Trend?" Signature9 Will Burberrys Big Spending Shift Become the Next Fashion Trend Comments. N.p., n.d. Web. 09
Apr. 2014.

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Burberry External Company Analysis

  • 5.
  • 6. Competitive Environment ● INDUSTRY: Apparel, Accessories, and Luxury Goods ○ Unattainable - Burberry Prorsum ○ Intermediate - Burberry London ○ Accessible - Burberry Brit ● MARKET STRUCTURE: Monopolistic Competition ● KEY COMPETITORS
  • 7. Market Share 2013 Market Share 2012 Market Share 2011 Market Share 2010 Market Share 2009 LVMH 40.46% 42.13% 40.93% 41.90% 41.36% Dior 39.71% 40.59% 42.60% 43.56% 43.03% Ralph Lauren 7.21% 7.80% 7.54% 7.66% 8.49% Prada 4.91% 3.80% 3.73% 3.33% 3.56% Burberry 3.55% 3.38% 3.21% 1.78% 1.62% Michael Kors 2.99% 0.86% 0.59% 0.41% 0.32% Salvatore Ferragamo 1.18% 1.46% 1.40% 1.37% 1.62% Market Shares Capital iQ
  • 8.
  • 10. ● True competitors have to compete with intangible assets of the brand ● Brand Heritage ● High Quality/High Volume ● High-end Retail Space ● Most new entrants will not be true competitors Threat of New Entrants
  • 11. ● Relatively limited ● Purchases are based on intangible value ● Time-sale sites like Gilt and Myhabit are increasing buyer power ● Due to relatively uniform product performance there is an inverse relationship between brand loyalty and buyer power Bargaining Power of Buyers
  • 12. ● Extremely Limited ● Significant competition among textile manufacturers in Southeast Asia ● Low cost of input materials ● Low cost of labor ● China is protecting cotton prices Bargaining Power of Suppliers
  • 13. ● Largest threat is other brands in the category of accessible luxury ● Counterfeit goods may negatively impact brand integrity ● Accessible luxury goods may take a greater hit during economic downturns Threat of Substitute Products or Services
  • 14. ● 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 Rivalry Among Existing Competitors
  • 16. Changes Coming ● Continuing growth after the worldwide economic slowdown in 2009 ● Industry growth in China slowing down ○ 2% growth in 2013, was 7% in 2012 ○ government regulations → anti consumption, more savings ○ shift from mainland shopping to online and/or abroad shopping ● Increase in labor wages (especially in China) ● Baby Boomers - to appeal to younger generations
  • 18. Company Imperatives •£259.2 million profit ($428,000,000) in 2013 •50 new stores since 2009 •Strategic expansion - Seek other manufacturing opportunities, possibility Mexico -Improving global economy and increases in labor cost→ Price Increase - Focus on their digital leadership to capture the younger generations
  • 19. Business Environment ● The Luxury Goods Industry - Exposed to a large set of external factors. ● The industry suffered as the global recession hit over 2008 and 2009. ● Placing greater focus on the Asian Market! ● “Burberry is constantly leveraging the energy in its creative thinking culture.” (www.burberryplc.com) ○ The company commits to phasing out all hazardous chemicals from its supply chain by January 1, 2020.
  • 22. Marketing Mix ● Product ○ Gabardine - patented waterproof, anti-wrinkle twill ○ Patented Prorsum knight logo and check pattern ● Price ○ High end ○ Trench coat retails around $2,000 ● Promotion ○ Digital Leader ● Place ○ Retail
  • 24. Marketing Performance •Importance of brand image •Social Media success -17 million Facebook followers •71% of revenue is from retail www.prc.com
  • 25. Action Steps ● Continue to invest in new and emerging markets ● Produce a mobile application for ○ artofthetrench.com → increase awareness ○ burberry.com → increase sales ● Link all digital marketing tools together → easier sharing across all platforms ● Seasonal new product development and product diversification ○ reach and grow in new markets ○ retain customer loyalty
  • 26. Integration and Organization ● Market share has been constantly growing since 2009. ● Burberry operates in four regions. ○ Asia Pacific: 39% of retail/ wholesale revenue. ○ Europe: 30% ○ Americas: 25% ○ Others: 6% ● Expanding digital market. ○ Get closer to the customers and capture the younger generations ○ Save costs by looking into alternative manufacturing locations ○ Extend the brand’s online e-marketing to maintain a strong digital presence ■ 17 million likes on Facebook ■ 2.8 million followers on Twitter ■ 8 million viewers on YouTube
  • 28. Thank you! At this time, we will open the floor for any questions.
  • 29. Sources ● "Accelerate Retail-Led Growth." Accelerate Retail-Led Growth. N.p., n.d. Web. 09 Apr. 2014. ● "A Checkered Story." The Economist. The Economist Newspaper, 22 Jan. 2011. Web. "ART OF THE TRENCH TUMBLR." ART OF THE TRENCH TUMBLR. Burberry, n.d. Web. ● Ashton, Alexandra. "Innovative Marketing & Communications at Burberry." Innovative Marketing & Communications at Burberry. N.p., 30 Apr. 2013. Web. 02 Apr. 2014. ● "Best Global Brands 2013." Interbrand.com. Interbrand, 2014. Web. 19 Mar. 2014. ● "Burberry Chief Targets Mid-luxury." Ft.com. The Financial Times LTD, 13 July 2006. Web. 25 Mar. 2014. ● "Burberry Dedicates 60% of Marketing Spend to Digital." Marketing Jobs & Marketing News. N.p., n.d. Web. 09 Apr. 2014. ● "Burberry's Success Story - Salesforce.com." Salesforce.com. N.p., n.d. Web. 09 Apr. 2014. ● Cheeseman, Gina-Marie. "Burberry Commits to Phasing Out Toxic Chemicals from Supply Chain." Triple Pundit RSS. N.p., 13 Jan. 2014. Web. 09 Mar. 2014. ● "Consumer Goods." UK: Will Burberry's Strategy Change with Its Management? N.p., n.d. Web. 09 Apr. 2014. ● Flannery, Russell. "Where's China's Growth? Textile Industry Is Weaving Expansion." Forbes. Forbes Magazine, 28 Aug. 2013. Web. 25 Mar. 2014. ● “Great Brand, Great Company.” Burberry PLC. N.p., n.d. Web. 24 Mar. 2014.Bu ● "Group Overview." Burberry PLC. N.p., n.d. Web. 24 Mar. 2014.Bu ● Hsu, Tiffany. "Affordable Luxury Brands Are Booming in Popularity." Los Angeles Times. Los Angeles Times, 20 Dec. 2013. Web. 06 Apr. 2014. ● "Louis Vuitton, Marc Jacobs Ramp up Ad Spend as Market Improves." Luxury Daily RSS. N.p., 11 Oct. 2010. Web. 09 Apr. 2014. ● “Luxury.” Investor Words. n.d. Web. 18 March 2014. Lynn, Matthew. "Even Made in China, a Burberry Is Still British: Matthew Lynn."Bloomberg.com. Bloomberg, 11 Feb. 2007. Web. ● "Mainland China Entering New Era of Luxury Cooldown, Finds Bain & Company's 2013 "China Luxury Goods Market Study"" Bain & Company. N.p., 16 Dec. 2013. Web. ● OCS Team. "The Key Apparel Market Segments." Online Clothing Study. N.p., 14 Dec. 2011. Web. 06 Apr. 2014. ● Outlaw, Kiera. "Global Handbag & Purse Manufacturing Industry Report C1312-GL."IBISWorld. N.p., Dec. 2013. Web. ● Roberts, Andrew. "Burberry Lags Luxury Peers as Buyers Won't Pay for Plaid." Bloomberg.com. Bloomberg, 13 Sept. 2012. Web. 06 Apr. 2014. ● Ruiz, Brandon. "IBISWorld Industry Report C1311-GL: Global Apparel Manufacturing."" IBISWorld. N.p., Nov. 2013. Web. ● Standard & Poor's Financial Services, LLC. S & P Capital IQ. McGraw Hill Financial, Inc, n.d. Web. 9 Apr. 2014. "The End of Cheap China." The Economist. The Economist Newspaper, 10 Mar. 2012. Web. ● Wang, Lisa. "Luxury Sales." BOF. The Business of Fashion Ltd., 8 Oct. 2013. Web. 06 Apr. 2014. ● Wendlandt, Astrid. "Hermes Says Buying Power of Luxury Clients Unchanged." Reuters. Thomson Reuters, 02 Oct. 2011. Web. 25 Mar. 2014. ● "Will Burberry’s Big Spending Shift Become the Next Fashion Trend?" Signature9 Will Burberrys Big Spending Shift Become the Next Fashion Trend Comments. N.p., n.d. Web. 09 Apr. 2014.

Editor's Notes

  1. Burberry - 3.55%
  2. Comparable Products - Provide unique psychological benefits Ralph Lauren has more distinct levels of the luxury pyramid where Burberry is mixed
  3. •Constant growth since new CEO in 2006
  4. - continue to grow as global competitor (Asian Market) - brand pivots - easily adaptable to cyclical fashion market