Strategic Marketing at Burberry

Content Page Introduction2 1. Business planning and developing a strategy. The formation of Burberry’s new strategic business plan.  Business strategy, vision and mission . Successful strategy and achieving the goals based on analysis.

• Vision and mission

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• Protect,
• Explore and Inspire.
• Burberry values.
• Values
• Classification of Burberry values.
• Protect
• Explore
• Inspire
• Monitoring and evaluating of Burberry strategic goals and objectives.
• Conclusion
• References

Introduction

The report below tells about the history and development of the iconic luxury brand from Britain, Burberry. It reflects the company’s mission, vision and core purpose, which consequently form the values of the brand. The report indicates the key strategic goals and objectives, which form the competitive advantage of the company, how they are being monitored and evaluated.

Having been found as a small shop in Basingstoke, Hampshire, by a young draper Thomas Burberry in 1856 and developed into a large world-know brand ever since, Burberry is one of the first names that springs in mind when it comes to fashion and luxury.  The company went through many-years history of change and development. However, the core Burberry product still remains the trench coat made out of the brand weatherproof but breathable Gabardine invented and introduced by Thomas Burberry himself in 1880.  Today, according to Business Weekly, Burberry is the 98th most valuable brand.  Business planning and developing a strategy Creating the strategy of an organisation is a part of business planning, on one hand, but it is the essence of the strategic planning on the other, where the difference between the strategic plans and the business planning is only in timing of implementing and the process of evaluating the two. Different authors writing in the field of strategic marketing give various definitions of strategic planning.

However, all of them tend to agree in the fact that it always includes the major points below. Vision - developing a common “vision for the future” or a “conceptualization” of where an organisation wants or desires to be in the long-term;Assessment - appraising or determining where an organisation is currently (i. e. , its goals, objectives, activities, results, etc. ); Strategies - identifying how an organisation will actually realise (via concrete and predetermined actions) its mission, goals, and objectives; Measurement - evaluating the progress of an organisation in the implementation of its action strategies.

The report below will be based on the resumptive understanding of the term as a process of formulating of the mission, vision and goals of the organization and choosing the specific paths for outlining and gaining the desired resources to be used in order to provide the successful functioning of an organisation in future. Strategic planning is a useful tool in making the decisions concerning the total management of an organisation. Its main purpose is to ensure the right amount of innovation and modification for the organisation to be able to respond to the changes on the market.

However, creating a strategy does not lead to an immediate action, but it sets up the general direction for the company to follow in order for its fence-mending and growth. The formation of Burberry’s new strategic business plan One of the main features that characterizes the strategic plan is its possibility to be adapted to the ever changing circumstances initiated by both internal and external factors. Thus over the decades Burberry has been changing its strategy and approach to trading.

So when the age of the globalization brought new strong competitors into the market new ways of winning the customers loyalty and preference were to be found. In the 2006 the current CEO Angela Ahrendts joins the company replacing Rose Maria Bravo, who managed to greatly expand the Burberry market share in the US.  Ahrendts modernizes every aspect of the company’s behaviour and positioning itself on the market having chosen an innovative five year strategic business plan. Business strategy, vision and mission

According to the new plan the company concentrates its investment efforts on opening its own stores rather than on the wholesale, especially in London. The new CEO recognizes Burberry’s presence in its genuine way and major PR activity in this city precisely, as another way to emphasize the British heritage of the brand. However, Ahrendts points out there are 25 such “Londons ”, where Burberry will strive for recognition and loyalty, which include such metropolises as Paris, New York, Hong Kong, Dubai, etc. As due to the fact that the company produces luxury goods Ahrendts prefers to play more or less safe and concentrate on those parts of the world which are likely to be protected from the wider economic problems. As another crucial factor for the growth and development that Ahrendts chooses, predicting the future customer be younger, is the company to not maintain their traditional product line and merchandising way only, but to enhance it with the new design and presentation to be able to satisfy the demand of the new type of a customer.

Thus the new strategy with the new vision and mission appeared that has brought changes into every area of the company. Successful strategy and achieving the goals based on analysis According to Michael Porter “Competitive strategy is about being different. It means deliberately choosing different set of activities to deliver a unique mix of value”. [13]The creation and the development of a new strategy to manage such a diverse business with the global outreach as Burberry is very complex in nature. Depending on various both internal and external factors it often requires to be made in the uncertain situations.

It also often involves the radical change in the current culture of an organisation which is always uneasy for the employees and may adversely affect the performance of the organisation. Being an international company with the Global outreach makes it challenging for the company like Burberry to develop and maintain the competitive strategy that will encourage financial growth and gain advantage on the market. Nevertheless, Angela Ahrendts chooses the most ambitious and strategic plan Burberry has had in almost 50 years. Leveraging the franchise

Where the goals are brand momentum by consistent global articulation, marketing innovation and product excellence.  Intensifying the development of non-apparel By focusing on the yet under-penetrated non-apparel categories, such as men’s collections, soft accessories collections and licensing the eyewear, fragrance, make-up and watches products globally. Accelerating retail-led growth To change the static wholesale model of the company to a dynamic retail model by driving the productivity, putting the customer needs in the centre, and investment into opening new stores.

Investing in the underpenetrated markets The goals are engaging China, developing India and the Middle East markets and elevating the wholesale presence.  Pursuing operational excellenceTo be recognised not only by operational excellence, but by product and marketing excellence. However, despite the most well-considered strategy a company is always dependent on both internal and external factors able to make an impact on its development and trade. PESTEL method will help to analyse the macro external environment Burberry may find difficult to deal with in order to realise its strategic plan.

Political| Economical| Social| Technological| Environmental| Legal| Being an international company may create problems with possible tensions between the governments of the countries where Burberry trading takes place| Continuous recession| Fairtrade responsibilitiesAnti-fur/ leather campaigns| New highly technological approaches to selling , buying and advertising the product appear| The impact on the Planet while manufacturing and transporting the goods | Different taxation and trading rules and regulations in different countries|

However, not only the macro external factors, but the micro external factors too might cause obstacles for the company’s strategy. Michael Porter’s Five Forces analyses gives the clearest understanding of the micro external environment, which includes the threat of the existing competitive rivalry, threat of bargaining power of the suppliers, threat of substantial products, as well as the threat of the customer bargaining power and the threat of the new entrants. It can be seen from the scheme, that Burberry’s main existing competitors include Stella McCartney in the market of clothing and shoes (apparel); Hermes in the non-apparel market, e. . bags and scarfs; and Chanel to talk about make-up. Moreover there is also a threat from the substantial products, such as those produced by Sisley, Ted Baker and Karen Miller, which are not luxury brands, however do have a reputation of a great quality and they are also British. Which means in times of recession people might switch to them. There is a threat from the suppliers in case they would increase the price, as Burberry only works with those the members of the Ethical Trading Action Group.

There is a threat coming from the customers too due to the fact that most of the Burberry products are fashion oriented, which means once they are out of fashion, people will refuse buying them. However, the threat of the new entrants is not essential, as even though the new brands may offer novelty, they cannot offer the name with such a rich background and heritage that Burberry has. All of these factors must be taken into consideration for Burberry current strategy to be successful.

Vision and mission

With the appointing of Angela Ahrendts as a CEO in 2006 when the Internet was booming bursting the opportunities of the global trade with its no-boarders possibilities, Burberry steps on a completely new path of high-tech cooperation with its customer. [5] With the core Burberry ideology of “The faster we move forward, it becomes even more critical to look back and never forget who we are and never forget where we came from. And what made this brand such a great global luxury brand today” in mind Ahrends sets the new core purpose for Burberry. We had a vision” – she admits in one of the interviews – “And the vision was to be the first company who was fully digital from end-to-end”. [2] Ever since the company has been working on integrating various digital approaches to its business. Burberry’s advertising campaigns and catwalk shows became more and more technologically complex whereas the on-line trading on the contrary became easier and more available by the company’s partnering with various on-line selling platforms to take that vision and built the social enterprise.

The experience expected was that the customer would have the total access to Burberry across any device anywhere and would get exactly the same feeling of the brand, feeling of the culture, regardless of where, when, how they were accessing the brand. Everyone now should be able come into Burberry world and see the Burberry journey and mission. The new vision enhanced the Burberry mission to sell its “distinctive Britishness” to the world with the new flavour of community that every customer is believed to become a part of buying or at least being interested in a Burberry product.

Such attitude intends to create greater customer’s loyalty to the brand as this is the community, where one’s opinion in a way of a feedback is valued and appreciated. Even the personal preferences of how the core Burberry product should look like is taken into consideration from now on as the company launched www. artofthetrench. com web platform, where anyone can post their photos wearing a Burberry trench, moreover, can create their own trench coat based on the iconic trench from Burberry. Ahrendts goal is to deepen, broaden and vary the communication between the company and the customer through every activity the company is involved in.

She emphasizes on the vital necessity of the cross-channel communication to be “totally connected to everyone who touches your brand”. [2] The new vision and the new additions to the established mission of the company have formed the brand’s new strategic intentions 2. Protect, Explore and Inspire. Burberry values.

Values Burberry is a brand with over 150 years of history.  All that time the company has been run by the efforts of many people and, naturally, these people might have been of a completely different personalities, views and opinions. However, being a company, which in this case is Burberry, draw hese people together united not only by common vision of where the company is going, but also by the values, which in a context of a corporate culture set the behavioural norms of the company through years for everyone who entered it. Edgar H. Schein describes corporate values as “A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems”. Burberry defines their core values as Protect, Explore and Inspire. Angela Ahrendts, Burberry’s CEO, often refers to the company as the “new and old company” and such description definitely reflects the way the company constantly strives for the new opportunities, but always staying faithful to its old priorities. The essence of the Protect, Explore and Inspire company’s core values can be explained through the objectives of Burberry as an organization.

Classification of Burberry values

Cultural value of the company to traditionally remain a “quintessentially British” brand.

Burberry is proud of its rich heritage which has seen over a 150 years of British history. Thus the company is passionate about the the authenticity of their trade mark and core product in design and purpose, such as world-wide recognized trademark check and Prorsum horse logo and a traditional modern classic style trench coat. Environmental value aims the environmental excellence of the company. Burberry is continuously aware about the environmental issues, such as climate change and carbon dioxide emissions and animal welfare, for example.

The company is a member of the UN Global Compact and uses the Compact’s Ten Principles to guide its Corporate Responsibility activities. It is listed on the FTSE4Good Index and achieved the Carbon Trust Standard.  The work of the Business for Social Responsibility Sustainable Luxury Working Group, of which Burberry was a founding member, also continued this year, focusing on animal welfare guidelines and the exotic skins supply chain. As a result, the release of a common Animal Welfare Policy by the Group was communicated to Burberry suppliers, detailing its high expectations in respect of welfare standards.  Burberry is also a member of the Leather Working Group, supporting its efforts to improve transparency in the leather industry. Burberry does not utilise sandblasting on any of its products manufactured by or on behalf of the Group. . Ethical value is in the desire of the brand to ensure the rights of their employees are highly valued and carefully followed. Burberry constantly shows its striving towards the improved Corporate Responsibility (CR) performance.

To achieve long-term improvements in labour conditions, Burberry provides support and resources to suppliers to empower them to take responsibility for their factory and subcontractor conditions. The CR team delivers supplier training covering the Group’s ethical trading expectations, management systems and counsel on transparency and standards for subcontractors. Burberry strongly believes that a policy of equal opportunity in employment is integral to the strength and growth of its business as a global brand with a diverse stakeholder and customer base.

The company aims to ensure that the most capable job applicants are recruited and the most competent employees in the company progress. All decisions about people’s employment are based solely on an objective assessment of their suitability for the job. Burberry aims to maintain a working environment free from harassment or intimidation on discriminatory grounds and ensures that employment conditions and job requirements reflect its commitment to equal opportunities.  Explore Burberry values in that area are very much business oriented.

Thomas Burberry, the founder of the brand, explored the world of outerwear of his generation by inventing his sensational waterproof Gabardine and a trench coat, which none has ever seen nor worn before. Today Burberry’s aims to expand its production range to make it as diverse as possible to increase the market share.

However at the moment the range already goes from the core innovative outerwear to not only womenswear and menswear, but to the non-apparel items, e. g. accessories, watches, childrenswear and even some home decoration items. 8] Burberry has always been aiming for the new markets: first sports and outdoors, then military usage and later civilian clothing. Now that the company has established itself on the different types of market, it is striving for the geographical expansion taking markets throughout the world, with a balance across major geographic regions. Inspire They are the Burberry social objectives. Burberry believes that contributing into the local communities the company works with will make a positive impact.In 2008 Burberry established the Burberry Foundation charity organisation the purpose of which was to help young people realise their potential through fashion and creativity, built their confidence and self-esteem.

Monitoring and evaluating of the strategic goals and objectives Ahrendts approach to monitoring and evaluating of the strategy execution and achieving the goals is “Divide and conquer”. According to that there were particular teams created to monitor and evaluate particular aspect of the new strategy. Design team, headed by Chief Creative Office, responsible for everything the consumer sees, including merchandising and creative media;

• Marketing team responsible for integrated advertising, PR and communications functions, which together focus on building and elevating brand awareness through traditional and digital media;
• Digital commerce newly-formed team, driving digital commerce globally to accelerate the brand’s digital leadership position in the luxury sector and help unlock the huge opportunities in this high-growth channel;
• Merchandising and planning team, which assorts, procures, and analyses the global collections in alignment with brand initiatives and commercial opportunities.  Every year Burberry reveals their annual results and achievements according to the itinerary in their annual report.

Conclusion

A straight forward highly innovative strategy by the new Burberry CEO caused uncertain reaction from different people in 2006 as well as it still causes doubts. Some think those were unnecessary changes, which made Burberry loose its original look and spirit, and some believe it was the best thing that have happened to Burberry in the last 50 years. However, the facts and numbers indicate that Burberry grew up to 500 stores in over 50 countries and led to increase the total revenue up to +23% in five years by September 2012 with the on-line sales increase in 50%. [3] Almost certainly the course has been changing during those five years due to the macro and micro external factors, which were indicated above.

Nonetheless, it is obvious that creating a relevant and detailed strategic business plan and a consistent monitoring of its results and execution are crucial for a successful management of the company. Also, the earliest possible setting of the strategic goals and stating the company’s vision and mission and staying faithful to them makes the strategic plan effective. And in conclusion, understanding the values of an organisation will keep the corporate culture of the company stable, which is directly linked to productivity and job satisfaction among employees.

References

•  Angela Ahrendts. (2011). Burberry uses salesforce com to create the ultimate Social Enterprise. Available: http://www. youtube. com/watch? v=oRpLo44nUEQ. Last accessed 13. 12. 2012.
• Angela Ahrendts. (2011). The Young-Old Company - Angela Ahrendts, Burberry. Available: http://www. youtube. com/watch? v=_i50d6wiCBc. Last accessed 13. 12. 2012.
• Burberry. (2012). Annual report. Available: http://www. burberryplc. com/documents/full_annual_report/burberry_ar_final_web_with-urls_indexed. pdf. Last accessed 13. 12. 2012
• Burberry. (2012). Annual report. Available: http://www. burberryplc. com/documents/full_annual_report/burberry_ar_final_web_with-urls_indexed. pdf. Last accessed 13. 12. 2012.
• BW staff. (2009). The 100 Best Global Brands 2009. Available: http://images. businessweek. com/ss/09/09/0917_global_brands/4. htm . Last

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