Burberry
Analysis of the competitive environment The aim of this essay is to provide brief and structured analysis of the competitive environment of a Burberry.
RENATA GECAN MILEK 19.11.2012

Professional MBA Business Core 2012-2014 Competitive Analysis and Strategy Business Core Class 3

1.

Introduction

The aim of this essay is to provide brief and structured analysis of the competitive environment of a Burberry. In the first part I will briefly present luxury goods sector, trends, and in the second part of this essay I will analyse Burberry using Porter’s Five Forces analysis. 2. Luxury Goods

Luxury goods are products and services that are not considered to be essential and are associated with affluence1. Some luxury
The company's Art of the Trench social networking site has had millions of hits. 4. 5. Burberry – strategy

Burberry strategy has five key strategic themes: leverage the franchise, intensify non-apparel, accelerate retail-led growth, invest in under-penetrated markets, and pursue operational excellence. These five themes underpin the connected culture, brand momentum and consistent performance5. 6. Michael Porter's Five Forces Model

Bargaining Power of Customers: Buying power is low due to the fact that all customers are individual consumers. Customers can switch easy form one product to another due to the low switching costs but the products are determined by designers, sub-cultures, brands which limit switches. Bargaining Power of Suppliers: Key suppliers in the luxury goods market are clothing manufacturers and wholesalers. As international trade liberalizes, supplier power also is decreased through competition from manufacturers in low-wage regions like China. There is low to moderate supplier power in this market. Threat of Entry of New Competitors: The Asia-Pacific luxury goods market has shown strong rates of growth in recent years which increases the industries attractiveness to new entrants. Entry to the industry does not require large capital investments, setting up a single, independent apparel retail store are within the means of many