Burberry SWOT Analysis | Business Teacher
Burberry SWOT Analysis
Burberry is a luxurious fashion retailer that has a strong presence in Western economies. The company targets high-end consumers of all ages and genders and specialises in producing clothing, perfumes and accessories.
As Burberry (2017) points out, Burberry products are known for their Iconic fashion brand in Britain. Burberry ensures that its end users get quality, durable products. To maintain its luxurious status, the company does not advertise through television or other forms of mass media. Instead, its adverts are placed on fashion websites that include Vogue and Elle where they can target celebrities. Similarly, Burberry has approximately 500 stores in 50 countries, and this ensures a wider reach of products (Gasparini, 2017; Burberry, 2017). Furthermore, Gurrin et al. (2016) state that a wide Chinese market has positively influenced the company’s revenue due to increased sales. Burberry, a luxurious lifestyle brand, engages a lot with people in the community and social media. Currently, Burberry’s Facebook page has 17,247,437 likes which shows that Burberry products are relevant to social media fans. Additionally, Burberry (2017 points out that the company has received two royal warrants; by Queen Elizabeth and Prince Charles. The royal warrants indicate that the English royalty consumed Burberry’s products, which is advantageous to the company as people start believing Burberry’s products.
Conversely, Burberry has its weaknesses. The luxury price of Burberry products limits them to a few consumers and excludes the larger percent of customers who are unable to afford these products (Weston, 2016). Besides, Burberry has limited itself to a few product lines (Gasparini, 2017; Burberry, 2017). Burberry products are limited to clothing, beauty products and accessories, unlike competing companies that have diversified. Most companies in the same industry sell a variety of products like home décor and furniture, unlike Burberry. Additionally, Burberry has a high staff turnover which lowers the efficiency of the company. High staff turnover increases costs incurred by the company, brings about time wastage trying to recruit new employees frequently and poor business continuity especially when good customer relationships are dependent on employees. Low inventory turnover is a weakness in Burberry (Gasparini, 2017).
Lifestyles are changing throughout the world. The tastes and preferences of consumers have increased the demand for luxury goods such as Burberry’s products that are considered by many to be classy. Markets will greatly expand in future since the demand for premium products keeps increasing (Phau, Teah & Chuah, 2015). Nations, as well as economies, are developing and this is an opportunity since Burberry can get a wider market and, hence, increased sales. Burberry will benefit from market growths as it is going to increase sales volumes. Additionally, Burberry Company can diversify its products and out stand its competitors such as Gucci (Gasparini, 2017) in the market. Product differentiation will yield high profits to the company and minimise the risk of losses since whenever a particular product is not selling well, the company can generate revenue from products that are in high demand.
According to Kulik & Metz (2017), stiff competition from major opponents such as Gucci and Prada that are in the global market is a big threat to Burberry. Burberry has to ensure its products are quality and availed to customers timely to satisfy major consumer needs. Consumer satisfaction enables companies to win market shares since satisfied consumers are loyal. Besides, Gasparini (2017) states that most Burberry products have a short cycle in the market due to changing lifestyle and preferences. Today’s consumer wants are different from tomorrow’s, and therefore, in the case of the surplus production of a particular item, the company is likely to run on losses. Furthermore, there are numerous counterfeits in the market branded as Burberry products (Gasparini, 2017). Imitated products tarnish Burberry’s brand image which leads to declined profits. Customers begin to doubt if the products are legit. Finally, politics and economic stability also impact negatively on the performance of Burberry since it is a worldwide brand that operates in many countries (Ahmed, 2014).
- Ahmed, M. I. (2014). Marketing tools in understanding a market and tackling a growing competition case: sarban duty free shop. [Online] Available at: http://dspace.bracu.ac.bd/jspui/bitstream/10361/3901/1/12164011.pdf [Accessed 2 Aug. 2017].
- Burberry (2017). Burberry History. [online] Burberry. Available at: https://www.burberryplc.com/en/company/history.html [Accessed 3 Aug. 2017].
- Gasparini, R. (2017). Burberry’s Marketing Success. [online] amazonaws. Available at: http://s3.amazonaws.com/academia.edu.documents/51157537/Burberry_Update_2017.pdf [Accessed 1 Aug. 2017].
- Gurrin, C., Joho, H., Hopfgartner, F., Zhou, L., & Albatal, R. (2016, July). Ntcir lifelog: The first test collection for lifelog research. In Proceedings of the 39th International ACM SIGIR conference on Research and Development in Information Retrieval (pp. 705-708). ACM.
- Kulik, C. T., & Metz, I. (2017). Women at the Top. The Oxford Handbook of Strategy Implementation, 239.
- Phau, I., Teah, M., & Chuah, J. (2015). Consumer attitudes towards luxury fashion apparel made in sweatshops. Journal of Fashion Marketing and Management, 19(2), 169-187.