TIMELESSBRITISH

ELEGANCE

AUTHENTICCLASSIC

LOOK

KNIGHTCHECKERTRENCH

COAT

Who else but...

Competitive Environment● INDUSTRY: Apparel, Accessories, and Luxury Goods

○ Unattainable - Burberry Prorsum

○ Intermediate - Burberry London

○ Accessible - Burberry Brit

● MARKET STRUCTURE: Monopolistic Competition

● KEY COMPETITORS

Market Share 2013

Market Share 2012

Market Share 2011

Market Share 2010

Market Share 2009

LVMH 40.46% 42.13% 40.93% 41.90% 41.36%

Dior 39.71% 40.59% 42.60% 43.56% 43.03%

Ralph Lauren 7.21% 7.80% 7.54% 7.66% 8.49%

Prada 4.91% 3.80% 3.73% 3.33% 3.56%

Burberry 3.55% 3.38% 3.21% 1.78% 1.62%

Michael Kors 2.99% 0.86% 0.59% 0.41% 0.32%

Salvatore Ferragamo

1.18% 1.46% 1.40% 1.37% 1.62%

Market Shares Capital iQ

Porter’s Five Forces

● True competitors have to compete with intangible assets of the brand

● Brand Heritage ● High Quality/High Volume● High-end Retail Space● Most new entrants will not be true competitors

Threat of New Entrants

● Relatively limited● Purchases are based on intangible value● Time-sale sites like Gilt and Myhabit are

increasing buyer power● Due to relatively uniform product performance

there is an inverse relationship between brand loyalty and buyer power

Bargaining Power of Buyers

● Extremely Limited● Significant competition among textile

manufacturers in Southeast Asia● Low cost of input materials● Low cost of labor● China is protecting cotton prices

Bargaining Power of Suppliers

● Largest threat is other brands in the category of accessible luxury

● Counterfeit goods may negatively impact brand integrity

● Accessible luxury goods may take a greater hit during economic downturns

Threat of Substitute Products or Services

● Burberry competes mainly within the category of Accessible Luxury, as well as Intermediate and Unattainable Luxury

● Other brands in this category include Salvatore Ferragamo, Prada, Louis Vuitton, Ralph Lauren, Christian Dior, and Michael Kors

Rivalry Among Existing Competitors

www.burberryplc.com

Changes Coming● Continuing growth after the worldwide economic slowdown

in 2009

● Industry growth in China slowing down

○ 2% growth in 2013, was 7% in 2012

○ government regulations → anti consumption, more

savings

○ shift from mainland shopping to online and/or abroad

shopping

● Increase in labor wages (especially in China)

● Baby Boomers - to appeal to younger generations

www.qz.com

Company Imperatives•£259.2 million profit ($428,000,000) in 2013

•50 new stores since 2009

•Strategic expansion

- Seek other manufacturing opportunities, possibility Mexico

-Improving global economy and increases in labor cost→ Price Increase

- Focus on their digital leadership to capture the younger generations

Business Environment● The Luxury Goods Industry - Exposed to a large set of

external factors.

● The industry suffered as the global recession hit over 2008 and 2009.

● Placing greater focus on the Asian Market!

● “Burberry is constantly leveraging the energy in its creative thinking culture.” (www.burberryplc.com)

○ The company commits to phasing out all hazardous chemicals from its supply chain by January 1, 2020.

STP

www.burberryplc.com

www.burberryplc.com

Marketing Mix● Product

○ Gabardine - patented waterproof, anti-wrinkle twill○ Patented Prorsum knight logo and check pattern

● Price○ High end○ Trench coat retails around $2,000

● Promotion○ Digital Leader

● Place○ Retail

www.burberryplc.com

Marketing Performance

•Importance of brand image

•Social Media success

-17 million Facebook followers

•71% of revenue is from retail

www.prc.com

Action Steps● Continue to invest in new and emerging

markets● Produce a mobile application for

○ artofthetrench.com → increase awareness○ burberry.com → increase sales

● Link all digital marketing tools together → easier sharing across all platforms

● Seasonal new product development and product diversification○ reach and grow in new markets○ retain customer loyalty

Integration and Organization● Market share has been constantly growing since 2009.● Burberry operates in four regions.

○ Asia Pacific: 39% of retail/ wholesale revenue.○ Europe: 30%○ Americas: 25%○ Others: 6%

● Expanding digital market.○ Get closer to the customers and capture the younger generations○ Save costs by looking into alternative manufacturing locations○ Extend the brand’s online e-marketing to maintain a strong digital presence

■ 17 million likes on Facebook■ 2.8 million followers on Twitter■ 8 million viewers on YouTube

www.burberryplc.com

Thank you!At this time, we will open the floor for any questions.

Sources● "Accelerate Retail-Led Growth." Accelerate Retail-Led Growth. N.p., n.d. Web. 09 Apr. 2014.● "A Checkered Story." The Economist. The Economist Newspaper, 22 Jan. 2011. Web. "ART OF THE TRENCH TUMBLR." ART OF THE TRENCH TUMBLR.

Burberry, n.d. Web.● Ashton, Alexandra. "Innovative Marketing & Communications at Burberry." Innovative Marketing & Communications at Burberry. N.p., 30 Apr. 2013. Web. 02

Apr. 2014.● "Best Global Brands 2013." Interbrand.com. Interbrand, 2014. Web. 19 Mar. 2014.● "Burberry Chief Targets Mid-luxury." Ft.com. The Financial Times LTD, 13 July 2006. Web. 25 Mar. 2014.● "Burberry Dedicates 60% of Marketing Spend to Digital." Marketing Jobs & Marketing News. N.p., n.d. Web. 09 Apr. 2014.● "Burberry's Success Story - Salesforce.com." Salesforce.com. N.p., n.d. Web. 09 Apr. 2014.● Cheeseman, Gina-Marie. "Burberry Commits to Phasing Out Toxic Chemicals from Supply Chain." Triple Pundit RSS. N.p., 13 Jan. 2014. Web. 09 Mar. 2014.● "Consumer Goods." UK: Will Burberry's Strategy Change with Its Management? N.p., n.d. Web. 09 Apr. 2014.● Flannery, Russell. "Where's China's Growth? Textile Industry Is Weaving Expansion." Forbes. Forbes Magazine, 28 Aug. 2013. Web. 25 Mar. 2014.● “Great Brand, Great Company.” Burberry PLC. N.p., n.d. Web. 24 Mar. 2014.Bu● "Group Overview." Burberry PLC. N.p., n.d. Web. 24 Mar. 2014.Bu● Hsu, Tiffany. "Affordable Luxury Brands Are Booming in Popularity." Los Angeles Times. Los Angeles Times, 20 Dec. 2013. Web. 06 Apr. 2014.● "Louis Vuitton, Marc Jacobs Ramp up Ad Spend as Market Improves." Luxury Daily RSS. N.p., 11 Oct. 2010. Web. 09 Apr. 2014.● “Luxury.” Investor Words. n.d. Web. 18 March 2014. Lynn, Matthew. "Even Made in China, a Burberry Is Still British: Matthew Lynn."Bloomberg.com.

Bloomberg, 11 Feb. 2007. Web.● "Mainland China Entering New Era of Luxury Cooldown, Finds Bain & Company's 2013 "China Luxury Goods Market Study"" Bain & Company. N.p., 16 Dec.

2013. Web.● OCS Team. "The Key Apparel Market Segments." Online Clothing Study. N.p., 14 Dec. 2011. Web. 06 Apr. 2014.● Outlaw, Kiera. "Global Handbag & Purse Manufacturing Industry Report C1312-GL."IBISWorld. N.p., Dec. 2013. Web.● Roberts, Andrew. "Burberry Lags Luxury Peers as Buyers Won't Pay for Plaid." Bloomberg.com. Bloomberg, 13 Sept. 2012. Web. 06 Apr. 2014.● Ruiz, Brandon. "IBISWorld Industry Report C1311-GL: Global Apparel Manufacturing."" IBISWorld. N.p., Nov. 2013. Web.● Standard & Poor's Financial Services, LLC. S & P Capital IQ. McGraw Hill Financial, Inc, n.d. Web. 9 Apr. 2014. "The End of Cheap China." The Economist.

The Economist Newspaper, 10 Mar. 2012. Web.● Wang, Lisa. "Luxury Sales." BOF. The Business of Fashion Ltd., 8 Oct. 2013. Web. 06 Apr. 2014.● Wendlandt, Astrid. "Hermes Says Buying Power of Luxury Clients Unchanged." Reuters. Thomson Reuters, 02 Oct. 2011. Web. 25 Mar. 2014.● "Will Burberry’s Big Spending Shift Become the Next Fashion Trend?" Signature9 Will Burberrys Big Spending Shift Become the Next Fashion Trend

Comments. N.p., n.d. Web. 09 Apr. 2014.