Internal and External Analysis of Burberry

Report on Internal and External Analysis of Burberry

Introduction to Marketing

Marketing refers to communicating information of products and services to end users in order to create its unique identity in the marketplace. It enables corporation to create competitive edge in the marketplace and increase customer base. Present report is based on Burberry, the UK based organization which offers several products like outwear, fragrances and sunglasses as well as cosmetics. This corporation has several branches across world with 10851 employees. Furthermore, the net income earned by company in 2015 was £341.1. The report under investigation conducts  market analysis of corporation by using effective tools like PESTLE and SWOT. In addition to this concept of modern marketing has also been evaluated along with identification of challenges associated with the same.

TASK 1

Market analysis of Burberry

The marketing analysis of corporation is very important which helps management to assess current information and accordingly bring modification in the marketing strategies. It consists of several tools like PESTLE, SWOT and Porter Five Force analysis. Here, for conducting analysis of Burberry, following tools have been applied-

PESTLE

The pestle analysis of organization has been done as follows- Political -Political factors consists of many factors like tax policy, accounting standard and environmental law. Here, management of Burberry has to pay higher corporate tax that tends to reduce overall profitability (Cravens and Piercy, 2008). In addition to this, accounting standard of company also must be based on changing political parties so as to ensure ethical conduct of business. However, long term political stability support corporation in doing business effectively. Economical-It consists of factors like inflation, global financial crisis and low unemployment (Decker, Wagner and Scholz, 2005). For example, inflation tends to reduce purchasing power of customers that affect overall profitability of corporation. On the other hand,  global financial crisis also create negative impact of Burberry as it face issue in raising its short or long term finance. Social-It is the most important aspect for organization that helps in understanding preferences and taste of buyers. For Burberry income inequality of customers is the major issue through which young generation has issue in accessing good quality of fashion products. However, growing and ageing population indicates growth and success of fashion company (Hughes, 2005). Technological-Burberry is accessing updated technology at rapid speed. Owing to this, access to internet. Similarly, appropriate mode of communication are used so that buyers can be get important information related to products and services. Legal-Legal framework imposed by government of UK must be considered by company. For example, Competition Act 1998 specified standard rules and regulation which are complied by Burberry (Phillips, Davies and Moutinho, 2011). In the same way employment Act and other related regulations are also taken into account. It leads to operate business in an effectual manner. Environmental– The issue of CO2 emissions remain high for organization operating in UK. Owing to this, company need to take care of the same and CSR activities are performed so that general community get benefit from the same.

SWOT

The SWOT analysis of company can provide information related to internal and external environment. It enables management to find issues faced by corporation and accordingly corrective actions can be table to overcome the situation- Strength Burberry is operating in fashion segment and provide large variety of products and services to end users (Simkin, 2002). It is presented at international level with reinvented approach. However, the organization uses social media and  other appropriate mode of communication for better connectivity with large number of buyers. On the other hand, royal warrant was received by Burberry. Here, the first one is Queen Elizabeth and Prince Charles which aids to create value for corporation at international level. Weaknesses The premium price range is the most crucial issue for organization because young age population generate face issue affording costly products and services in accordance with their requirement. On the other hand, product line of company is limited such as cosmetics & accessories and apparels (Siomkos and Vrechopoulos, 2002). In addition to this, most of portion of income is generated from Asian market that can affect performance of company in case of change in regulatory framework of the same. Opportunity Burberry can expand itself in emerging markets like India because demand of premium products is increased. Furthermore, weaknesses of corporation is reflecting that product line can be enhanced for catering need of large number of buyers (Wood, 2008). However, aspect of differentiation must be considered by corporation so as to make customers highly satisfied. Furthermore, life style of customers is changing at rapid speed due to change in education, preferences and taste. This leads to expand market and increase market share of Burberry. Threats The threats present to Burberry can be understood in context of high competition in market. Similarly, life style of customers is also changing to a great extent which affect company as it has to bring innovation in the current products and services (Wood, 2003). Furthermore, fake products caused by unauthorized use of trademarks and intellectual property.

Key marketing issues affecting the organizations strategic position

The internal and external analysis of corporation bring forth following issues. All these issues affect operation of Burberry to a great extent. These are explained as follows-

  • Limited product line-According to internal and external analysis of company it has been found that company has limited product line (Wrenn and Mansfield, 2014). This limited product line depicts that company is having issue in creating its brad image at international level.
  • High competition in the market-There are number of competitors of organization such as Gucci, Louis Vuitton & Prada is performing better than Burberry.
  • Premium price range-Burberry set premium prices for its products and services that tends to affect young customers because they cannot afford costly products and services (Belz and Peattie, 2009).
  • Diffusion of brands-Burberry attract all customers across the world rather than focusing the aspect of Britishness. This affect brand image and unique identify of company in the marketplace.

TASK 2

2a Critically evaluating the concepts of modern marketing environment

The concept of modern marketing is very important for current businesses. Here, management gives importance to preferences of buyers rather than just selling products and services to them (Cova and Dalli, 2009). The modern marketing concepts consists of following aspects. Furthermore, issues associated with the same has also been analyzed-

Production concept-Here, organizations like Waitorse and Tesco produces products and services which are necessary for consumers. This consists basic food products like tea, coffee and ready to eat vegetables. Here corporation merely focuses on production and assume that consumers will buy it when the same comes to market. At this juncture, issues may be faced by companies due to innovation and creation in products offered by one.

Product concept- The modern marketing concept related to product depicts that organization like Tesco emphasize on quality aspect (Hollensen, 2015). This facilitates to meet their expectations effectively and retain them for loner time span. However, issue related to quality or produce range can affect performance of hotel to a great extent. Furthermore, Tesco produces product with innovative marketing strategy so that sales turnover can be increased with less efforts and in the same way profitability can also be enhanced.