Burberry Group Plc - New Business Models Application
Autor: josevchh • November 3, 2015 • Coursework • 682 Words (3 Pages) • 1,053 Views
Burberry Group PLC is a signature british designer brand that produces luxuryclothing and
leather goods, scarves and accessories under the famous brand name “Burberry”. The
company is one of the components of the FTSE 100 index, it’s also the most prominent
designer brand of United Kingdom and one of the most important players of this market
worldwide. The company is currently underperforming in a stock price percentage
comparison with the index (7.72% vs 6.76%) on a year period.
One of the main reasons for this underperformance is the dependability on the foreign
market for its profit growth, In the first half of the financial year, profits were significantly
harmed by the exchange rates and the Asian market slowdown, but the company expects to
fulfill its amended forecast.
Source: Financial Times
Despite the harmful macroeconomic changes for the luxury sector, Burberry has managed to
keep with its growth in both, revenue and net income within the fiscal year. There was a
decrease in their six month revenue forecast, from 1.16 billion pounds to 1.11 billion pounds.
To correct this downfall, Burberry Group PLC, should consider using the following business
models:
● Bait and Hook business model: Burberry Group PLC may consider implementing
this model by offering a symbolic souvenir or an accessory for free, such as the 30ml
presentation of their fragrances (retail prices start at £27). These items would be
given when the customer reaches a price benchmark and might even be presented in
levels where items of greater value for the consumer could be given when they reach
an upper benchmark. This would encourage a rise in the purchase per client that
ultimately translates in profit and revenue growth.
In a business model generation canvas, this model will fulfill the following blocks:
Cost structure: The product given by the company will be a subsequent reward of a
profitable purchase in order to increase revenue on a medium term basis.
Key resources: The model
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