WHY of their wealth. Chances that suppliers

WHY BURBERRY?Burberry has a huge potential. Oneof the Burberry’s main competitive advantages are its “British Nationality” andcompany’s history. Many customers perceive these as a sign of quality, and wantto purchase goods made in Europe, not in China, and customers are willing topay for premium prices and Burberry believes that’s the way to go. Company hasa many strengths which will result in growth and profit in years to follow.

New CEOBurberry recently got a new CEO,named Marco Gobbetti who is a businessmann with priceless experience in luxuryindustry, He was worked for for Moschino, Givenchy (owned by LVMH), Celine(owned by LVMH). He has done incredible work in the latter. Gobbetti made Celinewith double-figure growth and high profits a retail success. He posseses strongknowledge of leather goods. (theguardian) FACTSBurberry has a high intangiblevalue of the brand and there is a strong brand loyalty so there is airreplaceability of the brand culture which is one of the unique sellingspoints of the company.

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The core competitiveness that is impossible to bereplicated by fast fashion brands.Most of the Burberry’s productsare sold as retail not wholesale. Customers in luxury industry are less pricesensitive as proportion of their spending on luxury products respresents sfraction of their wealth.Chances that suppliers will start to make endproducts are slim because there are high entry barriers to enter the luxuryindustry. Probability of forward integration is extremely low due to high entrybarriers to luxury industry.

There will be benefits in salesfor Burberry after the UK leaves European union. The sales in the UK willincrease because buyers from the EU will buy products they can claim VAT ontheir way back home. Brexit  will makeUnited Kingdom cheaper for European customers.

PLANThe aim is to turn the brand intoa true luxury brand. Burberry will increase prices of their products. They willexpand their handbag offering because handbags make higher margins than otheritems.

They want to improve buyer’s experience by training in-store employeeson leather good and styling. Making the most of the digital media. They wereone of the pioneers of »see now, buy now« model which allows customers topurchase immediately after a fashion show. (businessoffashion)The future of the luxury industryis forecasted as digital.

Report titled “Global Powers of Luxury Goods 2017″published by Deloitte indicates that e-commerce will play a major role inluxury industry. It also suggests that luxury industry and technology will beclosely linked in near future, which is a good sign for innovative Burberry.Burberry is planning to remove theiritems from certain shops that are not luxury enough and renovate their ownshops to make the label more limited and exclusive and more strongly locate thebrand as truly luxurly in the eyes of the consumer.

(CNN)

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