Burberry's Technological Strategies and Trade-offs

Burberry and the External Technological Environment

• Burberry utilizes digital technology, with a global presence across 13 platforms and 11 languages, including a mobile app available in 33 countries.
• This broad reach potentially increases market share.
• In China, WeChat usage for appointments and 80% smartphone-based online purchases provide a potential sales advantage.
• Economic factors (e.g., falling consumer incomes) and political influences (e.g., government restrictions) could negatively impact Burberry's Chinese market performance.
• Technology can potentially provide a competitive advantage for Burberry in China.

Trade-offs for Burberry

• Maintaining brand exclusivity (e.g., not destroying excess stock) might result in lower profits if products are sold at below market value.
• Customer preferences (e.g., preference for real fur in clothing) might lead to a shift in customer loyalty toward competing luxury brands.
• Sourcing sustainable materials and ethical production can increase costs, potentially affecting profit margins.

Change in Senior Leadership at Burberry

• Burberry's share price fluctuated between 2017 and 2018, having a radical change due to leadership changes.
• Gobbetti's appointment initially had a positive impact on the share price but declined later until Christopher Bailey's departure.
• The change in leadership, while a possible factor, is not the only reason behind the fluctuating share price. Other factors such as demand and supply and economic conditions are also factors influencing this.