Burberry`s Corporate Strategy

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Analyzing Burberry`s Corporate Strategy

Yuliya Pulatova

10598049

Corporate strategy is a general guiding plan for a company that competes in diverse industries, to create value through diversification and analyze how the original company operates to add value to and manage its portfolio of businesses. (Ebbers, 2012, p.11)  Strategy tends to outline the way of creating unique value for clients and valuable stakeholders, force managers to think dynamically and analyze firm`s operations and reason why particular actions lead customers to prefer companies` products and services over those of competitors. (Ebbers, 2012. p.10) Burberry is a high profile British Fashion House that operates in a number of industries. Recently, Burberry`s strategy stopped succeeding in the targets that Burberry followed. The company`s profits decreased sharply. (p.15(1)) Evaluation of the strategy operates with a corporate strategy diamond, which consists of five elements: arenas, vehicles, differentiators, staging and pacing and economic logic. (Ebbers, 2012. p, 15) Further this paper will analyze whether Burberry introduced a new corporate strategy to achieve its targets. The main purpose of this work is to answer the research question to what extend is Burberry`s corporate strategy an integrated set of choices, using a corporate strategy diamond.  

   To start with determining where the business is active, first element of the strategy diamond, known as arenas, is used. Burberry created its own unique style producing high-quality classic trench coats and Haymarket check. Mostly, in particular trench coats made Burberry famous worldwide (p.15(1)) The Fashion House provided “democratic luxury”, presenting lower prices than competitors do, for consumers with high income, but lower end. (p.15(5)) In addition, targeting to gain more profit and control over its brand, Burberry started to intervene in perfume industry. (p.17.(6))

   Moving on to vehicles, the way a company achieves its targets, Burberry decided to shut-down franchise agreements, to pay more attention to interaction with customers. (p.15. (4)) With intervention in perfume industry, mentioned in arenas, the company licensed its perfume business to Interparfumes, a major perfume seller. (p.16. (10)) Burberry tried to gain more control over brands buying back licenses, reducing license agreement in Japan and completing menswear purchase license. (p.18 (13)) Burberry decided to reduce inconsistency in stores (including clothes, service and prices) that happened in each store worldwide. (p.16 (7))