LONDON SCHOOL OF BUSINESS & FINANCE Strategic Development at Burberry Student Name: Madhumalesh Prakash Student ID: A4036664 Submission Date: 4th November, 2011 Intake: MBA Batch 8A Module Name: Strategic Planning Module Code: SP Assignment Title: Longitudinal Strategic Development Study Word Count: 4044 Table of Contents 1. Recent past to the present: 3 1.1. Introduction 3 1.2. Business 3 1.3. Leadership and culture at Burberry 4 1.4. Strategies deployed 4 2. The Strategic Position 6 2.1. Macro-Environment 6 2.2. Industry and market structure and competitive conditions 7 2.3. Strategic capability, Resources and Competences 8 2.3.1. Strategic capability 9 2.3.2. Resources 9 2.3.3. Competences 9 …show more content…
Her transformation of Burberry had become a text book example of how to transform a business that other luxury brands are sometimes said to be “doing a Burberry” (Financial Times 2004). In 2005 Angela Ahrendts, replaced Bravo as Chief Executive who made changes to Burberry product line by making checks more stable and by focusing more on higher-margin products like handbags and perfumes (Friedman 2011). 1.4. Strategies deployed Alfred Chandler(1963) defines strategy as ‘ the determination of the long-run goals and objectives of an enterprise and the adoption of courses of action of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals’. And Michael porter(1996) sees it as ‘Competitive strategy is about being different. It means deliberately choosing different set of activities to deliver a unique mix of value’. Developing or making a strategy for a management is very complex in nature. It needs to be made in the uncertainty situations and may also affect the operational decisions. New strategy developed may also involve the change in present culture of an organisation which is difficult and may adversely affect the performance of the organisation. Strategies usually exist at a number of levels in an organisation. Let’s distinguish different levels of strategies and analyse it using Burberry’s strategies. The strategic themes of Burberry are: Leveraging the
Organisations today find themselves operating in an environment that is changing rapidly. The process of analysing the implications of these changes and modifying the way that the organisation reacts to them is known as business strategy.
In today’s world the business environment is rapidly changing so the strategy formulation and implementing it should me the vital key role in any organization. Hence Strategy management is defined as the process of making strategies and implementing strategies to meet the long term goal and sustain in the competitive world (Schermerhorn, 2012).It involves the environmental factors (both internal and external), strategy formulation and implementation, analysis and control.
Today, strategies are vital for businesses, in many cases it helps to achieve a competitive advantage. Increasing competition in most sectors and technological development has led to accelerated changes in the global economy. In order to meet the market needs, strategies encourage and enable the adaptation of companies in a changing environment (Tribe, 2010).
Strategies like leveraging the franchise, intensifying non apparel development and accelerating retail-led growth can be seen as business level strategies. Ahrendts’s digital strategy made Burberry the first luxury brand to live-stream a fashion show in 3D, to allow the customers to order products directly from the catwalk. She introduced social networking site to deepen the relation between customers and attract new devotees. Ahrendts, in a video interview claims that word-0f-mouthspreads through social networking and continues to be a positive conversation and its very powerful (Edgar 2009). As a result of all these Burberry overcame the recession and reported a profit of more than £5 billion in 2009.
A brand is a name or symbol used to identify the source of a product. When developing a new product, branding is an important decision. The brand can add significant value when it is well recognized and has positive associations in the mind of the consumer. This concept is referred to as brand equity. Brand equity is an intangible asset that depends on associations made by the consumer. There are three perspectives from which to view brand equity:
When the world was into recession, she cut 50 million pounds of costs and focus on the development of brand. Angela understand that when the period of economic insecurity, the value inherent in history, so she was set three core values for company which are protect, explore and inspire, the concept from the founder of Burberry, Thomas Burberry. In addition, Angela Ahrendts and Christopher Bailey co-founded "The Burberry Foundation" in the year of 2008 to provide global resources to youthful people who have dreams, and hope them to achieve its goals and potential with creativity. Meanwhile, inside the enterprise, Angela through the global video conferencing to send the information and communicated with more than 6,000 employees all over the world, because of this new creation, the global business trip rate decreased by 17%. On the other hand, after the financial turmoil, Burberry is a few brands, which had double growth of luxury brands, Interbrand announced the ranking of the top 100 of the best global brands in 2011, Burberry ranked 95, and the percentage of brand value is 20% of growth. To explore and investigate what is the operate model and what types of leadership management that Angela used to overturn the brand image during Ahrendts’ epoch.
Chapter Eight of Contemporary Management discusses the concept behind Formulating Business-Level Strategies. Business level strategies create a competitive advantage by allowing an organization to counter and reduce the threat of the five industry forces. For Uniqlo to gain higher profits, they must increase value to their designs. They increased their value by differentiating
Strategy is the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations (Johnson, et al., 2009).
Branding is the identity of a specific product or service by which consumer immediately associate with. Brands can be identified by the name, logo, slogan, or design of the company who owns the idea or image. Therefore branding is when that particular idea or image is advertised in a manner that more and more people are aware of that company providing its goods or services making them different yet selling the same type of product in the market. Promoting and advertising own brand in the market not only attracts more customers but also builds a good reputations and a set of standards to which the company should try to maintain.
"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".
Strategy can be defined as being different from one’s competitors, finding the race to operate and accomplished it. According to Michael Porter (1996), while becoming better at what you do is desirable, it will not benefit you in the long run because it is something other competitors can also do. Strategies for organizations are originally developed by Michael E. Porter in 1979 by introducing the five forces model. A company can identify the industry profitability and attractiveness by analyzing the five forces of Porter (Johnson et al., 2008). And then a reasonable strategy can be set up in line with the strengths and the weakness of an organization is able to create a plan for a stronger position for the organization within its
Defining strategy and what it means within an organisation is no easy task. It can cause confusion and difficulty within organisations, and this must be addressed. While there is no one set definition for strategy, many theorists have attempted to provide one. Examples of these include Alfred Chandler (1962), who defined strategy as “determination of the basic long-term goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals”.
Strategy is all about planning the next moves, making decisions - how and where to move forward from the current position. In the past, strategy was associated mainly with the military sector, the top chiefs of command were making tactical choices in order to defeat their rivals and achieve victory. In the business sector the purpose of strategy is in principle the same, planning and building a road or path that will lead us to where ever it is we want to be in the future and to overcome all obstacles that might lay on the way. However, there is a difference between those two sectors, soldiers need only to follow orders without seeing or understanding the big picture, while in the
Johnson, Wittington, Scholes, Angwin and Regnér (2014, p. 3) defines strategy as ‘the long-term direction of an organisation’.