Burberry Past Paper Case Study PDF

# Burberry Past Paper Case Study ## Burberry and the External Technological Environment The external technological environment is the impact of technological change on businesses through e-commerce and the use of mobile technology. Burberry was one of the first businesses to use digital technolog...

# Burberry Past Paper Case Study ## Burberry and the External Technological Environment The external technological environment is the impact of technological change on businesses through e-commerce and the use of mobile technology. Burberry was one of the first businesses to use digital technology with over 51 million followers globally, across 13 platforms and 11 languages. Burberry offers a mobile app in 33 countries which may result in greater market share due to accessing a wider number of potential customers. In China, customers can use WeChat to book appointments which could give Burberry an advantage over luxury clothing businesses that do not offer such services resulting in higher sales. 80% of online purchases in China are done on smartphones, so by having an online presence Burberry could increase its sales. However, other factors may have an impact on Burberry's growth in China. Economic influences may have an impact on how successful Burberry will be in China. A fall in consumer incomes may negatively affect Burberry if consumers cannot afford the £2,500 coats and £1,500 handbags. Political influences may also affect the success of Burberry in China if the Chinese Government restricts foreign businesses operating in China. Burberry's success in China will be dependent upon many external influences and technology may give it a competitive advantage. ## Trade-offs for Burberry A trade-off arises where having more is one thing potentially results in having less of another. By not destroying excess stock, Burberry may see its profits decline as the exclusivity of the brand is diminished if products are sold below market value. Some of Burberry's customers may like to buy clothing with real fur, so switch to other luxury clothes designers who still use fur. Sourcing materials ethically and being more responsible by using sustainable products can also raise costs (profit margins.) However, there may be no trade-off as profit for Burberry might increase if more customers switch to Burberry due to it being more socially and environmentally responsible. It is possible new customers will come aboard with Burberry due to their sustainable and ethical approach, this can increase market share. Many other high-end designers such as Gucci and Stella McCartney have already stopped using fur, which indicates that there is great demand for clothing which is more ethical. Burberry have an opportunity to develop the brand further. Extract E states that 66% of customers are willing to pay more for sustainable goods so this could see an increase in demand for Burberry by being ethical. The overall impact may depend upon how socially and ethically aware its core customers are. ## Change in Senior Leadership at Burberry The share price is the value of a share on the stock exchange. Extract C shows that Burberry's share price has fluctuated over a period of time. Between 2017 and 2018 there was a radical change in the Senior leadership at Burberry. The appointment of Gobbetti appeared to have an initial positive impact on the share price. The share price fell until Christopher Bailey announced he was leaving when there was a small rise and the share price continued to fall until Bailey's final collection was shown. Once Bailey had departed and Tisci became CCO the company began to prosper once more. This would tend to indicate that the leadership is very important in determining how well the company functions and its success. Nevertheless, the share price can also fluctuate as a result of changes in demand and supply. Changes in share prices are due to a number of factors such as confidence, financial performance and the state of the economy rather than because of the change in the senior leadership at Burberry.