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Burberry sales up on Asia growth report

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Introduction

STRATEGIC MANAGEMENT TASK #3 BURBERRY CASE STUDY In 1956 Thomas Burberry started up his first Burberry outwears shop in Basingstoke, England and layed down the foundations of his future empire, and one of the most popular luxury brands in the world. Today, Burberry possesses a large and powerful international business that operates in the luxury sector, which is estimated to be an approximately �150 billion global market. It is currently one of the most renowned luxury brands throughout the globe. The Burberry brand can be distinguished by multi-category competency, as it offers womenswear, menswear, non-apparel, and childrenswear, and a great global reach across geographical regions. The massive global presence of the company on the market leads to great competitiveness on the global scale. Burberry competes with a huge variety of luxury goods companies. Some are large international conglomerates, owning many luxury brands; others are focused on a single brand locally; while others are small, more localized operations. Strategic thinking is essential in such a competitive environment, as the success of an organization depends on the correct choices and the correct choice itself is a combination of well-judged and self-test opportunities, knowledge and skills in using modern tools to develop strategic alternatives, and choosing, and implementing the most appropriate strategies, in order to achieve organizational goals. ...read more.

Middle

Investing in under-penetrated markets proved to be one the most successful elements in Burberry's strategy. By that time China and India were such markets, therefore all distribution channels in terms of retail, wholesale, and licensing where used, in order to optimize final outcomes. The results were incredible. Financial data indicated that since 2004, the global luxury goods market had grown by around 8% per annum prior to the economic downturn in late 2008. In 2009, it is estimated that the global luxury market declined by around 9%, as consumer confidence and spending fell. Burberry's wholesale business experienced a 28% drop in sales, which led to shutting down some units and restructuring the entire wholesale division. However, despite the economic slowdown, Burberry presented adequate financial results for 2008/2009. The firm stated that Europe and Asia both delivered double-digit percentage growth. At June 2009, the company possessed 18 retail stores, 253 concessions and 84 franchise outlets in over 25 countries. They agreed on expanding the number of franchised stores in Asia to 100. Specialists predicted recoveries in 2009/2010 and fortunately forecasts were correct. ...read more.

Conclusion

mainland stores were opened, including Burberry's first flagship store in Asia at Singapore's Ion Orchard. Additional locations in Paris and New York were added as well in attempts to strengthen the company's position. Twenty-eight (28) stores were renovated. The company achieved 60% growth in e-commerce and is planning to continue investing in the channel, as it has proved to be a valuable addition to the distribution process. Burberry has always been aiming at providing leading standards of customer service throughout its stores. The company's current strategies turned out to be successful in the highly unfavorable economic conditions it is operating in, therefore the Burberry Group are planning further to continue the search for under-penetrated markets and invest in them, and rely on heavy and aggressive marketing, in order to create strong brand awareness. The group now has 122 mainline stores, 255 concessions and 90 franchised stores across the world, is planning to increase retail selling space by 10 percent a year. The unexpected world economic crisis had a devastating effect on the business. It is times like those that require true strategic thinking. Burberry took the correct strategic choices and witnessed great financial results, while others were struggling to survive. It is extremely hard to predict the economic future. One thing is certain, Burberry continue to strive for excellence. ...read more.

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