Business Agility and Luxury Companies: The Burberry Case

1,692 views

Published on

EDHEC Master Thesis presentation from Hannah Koller

Published in: Business, News & Politics
1 Comment
3 Likes
Statistics
Notes
No Downloads
Views
Total views
1,692
On SlideShare
0
From Embeds
0
Number of Embeds
26
Actions
Shares
0
Downloads
28
Comments
1
Likes
3
Embeds 0
No embeds

No notes for slide

Business Agility and Luxury Companies: The Burberry Case

  1. 1. Business Agility and Luxury Companies Defense – Master Thesis May 20, 2014 Advisor: DEBANE Franck; Student: KOLLER Hannah
  2. 2. I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion Agenda I. Introduction II. Presentation of business agility concepts III. Driving forces in the luxury market IV. Agility providers in the case of Burberry V. Constraints and opportunities VI. Conclusion
  3. 3. “Too much time can only teach you what can go wrong, not what could be transformative.” - Mark Gerson, American entrepreneur - I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion I. Introduction: The idea behind the thesis Business Agility - responsiveness, competency, speed, flexibility, innovativen ess - Luxury Markets - symbolism, high price and quality standards, aesthetic attributes, rarity, extraordinar y touch - ? Hypothesis: Luxury companies need and apply agility concepts.
  4. 4. I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion II. Business Agility
  5. 5. How to predict the future? 1. Projection 1. Proactivity 1. Reactivity I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion 90% of companies regard business agility as key success factor Past Present Future Past Present Future Past Present Future Strategic Plan Modification of the strategic plan Scenarios
  6. 6. I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion Measurable advantages regarding revenue growth, employee loyalty and decision-making effectiveness
  7. 7. I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion Strategic agility anchored in the business model Resource Fluidity Strategic Sensitivity Leadership Unity Doz and Kosonen (2008) “Business agility = equal exploitation of the three concept dimensions”
  8. 8. “Business agility = speed, with which the build-measure-learn loop can be performed” I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion Operational agility preserves an entrepreneurial spirit Ries (2011)
  9. 9. III. Luxury Market I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
  10. 10. Huge micro-economic potential due to digital revolution and increasing customer heterogeneity I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion Luxury Market 212 billion - 2012 - Current Market Risk Level Market Potential - High fixed costs - Sensitive customers - Exchange rate volatility - Counterfeit - Consolidated landscape - Niche designer emergence - Little room for differentiation - Luxflation - Country to city focus - Digital revolution - Homo- to heterogeneity
  11. 11. Luxury Markets are also not immune against macro-economic influences I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion China‘s triple-tax system - political - Product and trademark piracy - economic - Thrill-seeking society - social - Mobile revolution - technological - Green movement - ethical - Customer health regulations - legal -
  12. 12. IV. Burberry Case I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
  13. 13. Burberry as global, traditional and publicly listed luxury company (Business Model Canvas) I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion Key Partners - Suppliers - Production site managers - Wholesale partners - Models & Fashion show managers Key Activities - Designing - Supply chain improvement - Transparency creation Key Resources - Designer - Unique material - Physical store presence Value Proposition Qualitative: - Exclusivity - Brand & Status - Design Customer Relationships Personal assistance Channels Own retail network Customer Segments Niche market: - Millennials Cost Structure Value-driven: - High margin - High fixed costs (own retail stores) - No economies of scale - Little economies of scope (own production site) Revenue Streams Asset Sale: - Europe (44%) - Americas (27%) - Asia Pacific (24%)
  14. 14. Burberry’s turn-around in order to catch up on strong industry growth I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion 2nd in „Top Most Innovative Companies in Retail 2013“ ranking
  15. 15. Strategic agility as turnaround enabler and future business framework I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion - Strong relationship between Bailey and Ahrendts - Top team nomination - Continuous internal communication of vision Resource Fluidity Strategic Sensitivity Leadership Unity - Spread of a liberal mindset - Increased customer proximity - Embracing all hierarchy levels - Buy-back of licenses - Roll-out of a company-wide SAP system - New supplier acquisition
  16. 16. Little product-related agility due to business nature, but… I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion Seasonal products 1919 1930 1946 1974 2005 2013 Design Presentation at Runway Shows Collection Order Production Distribution Customer Feedback Unique products
  17. 17. … strong service-related agility. I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion Service-related 2009 2010 2011 2012 2013 Build Involve Measure
  18. 18. V. Constraints and Opportunities I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
  19. 19. Constraints don’t keep luxury companies from enjoying agility advantages I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion Constraints Opportunities Customer proximity and engagement (BI) Customer service Streamlined retail operations Company-internal, worldwide connectivity Nature of business Consolidated market Scepticism towards IT returns Vertical integration trend
  20. 20. VI. Conclusion: Companies never know what the future will bring! I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion Thesis: Luxury companies need and apply agility concepts Product- related agility Strategic agility Service- related Strategic Operational
  21. 21. Thank you for your attention. I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion ?
  22. 22. Appendix I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion Creation of the questionnaire (December 2013) Networking at the EDHEC Forum in Paris (January 2014) Email with embedded questionnaire (January 2014) Follow-up call (January/ February 2014) Increased search via personal and thesis advisor‘s contacts, EDHEC Alumni platform (January/ February 2014) First email contact (without questionnaire) (February through April 2014) Telephone interviews (15-30 min) (February through April 2014) Primary literature – research method 1. Phase 2. Phase

×