WHY with priceless experience in luxury industry. He

WHY BURBERRY?

Burberry has a huge potential. Main
competitive advantages of Burberry include: its “British Nationality” and company’s
history. Many customers perceive these as a sign of quality and want to
purchase goods made in Europe, not in China. Customers are also willing to pay
premium prices for these products which translate into higher profits and
margins. Burberry has also many other strengths that which will result in sales
growth and increasing profits in the years to follow.

New CEO

Burberry recently appointed a new
CEO, Marco Gobbetti, who is a businessman with priceless experience in luxury
industry. He was worked for Moschino, Givenchy (owned by LVMH) or Celine (owned
by LVMH) to name just a few companies under his leadership. Based on his
remarable track record we believe that he has ability to make Burberry more
luxury and consequently more profitable. Gobbetti made Celine a double-figure
growth company with high profit margins. He also posseses  specialized  knowledge of leather goods, which will make
handbag operation more efficient. (theguardian)

BRAND VALUE AND COMPETITIVE
ENVIRONMENT

The brand value is the most
valuable asset of Burrbery. More specifically, customer perception of the brand
combined and customer loyalty are irreplaceable and allows Burrbery to charge
premium prices. This competitive advantage is also very difficult  to be replicated by fast fashion brands or
potential induatry entrants.

Burberry’s customers are less
price sensitive as a proportion of their spending on luxury products represents
s fraction of their wealth. We expect this situation to be improved as company
targets ultra-welathy clients.

STRATEGY

The aim is to turn the brand into
a true luxury brand. Burberry will increase prices of their products. They will
expand their handbag offering because handbags make higher margins than other
items. They want to improve buyer’s experience by training in-store employees
on leather good and styling. They want to make the most of the digital media. They
were one of the pioneers of »see now, buy now« model which allows customers to
purchase immediately after a fashion show. (businessoffashion) The future of the luxury industry is
forecasted as digital. E-commerce will play a major role in the luxury
industry. It also suggests that luxury industry and technology will be closely
linked in near future, which is a good sign for innovative Burberry. (Deloitte)

Burberry is planning to remove their
items from certain shops that are not luxury enough and renovate their own
shops to make the label more limited and exclusive and more strongly locate the
brand as truly luxury in the eyes of the consumer. (CNN)