The Analysis of Burberry’s Sustainable Competitive Advantage base on its Resources and Capabilities
Burberry is a British luxury brand founded by Thomas Burberry in 1856, which design, sources manufactures and distributes high quality apparel and accessories for men, women and children. Burberry “has been defined by an overt Brutishness, a trio of instantly recognizable icons (the trench coat, the trademark check, and the ‘prorsum’ knight logo), and a deft creativity that ensure its designs are timeless.” (Vollmer and Premo, 2012) In 1998, Burberry has been described as “an outdated business with a fashion cachet of almost zero.” (Strategic Direction, 2005, P22) the product of trench coat of Burberry is a fashion classic, almost every designer tried to imitated, but still remind people about Burberry. Furthermore, the check pattern has become Burberry’s own signature, it use as the lining for the trench coats and scarf’s pattern for men and women. (Sanghvi, 2011) In 1891, Burberry opened the first store in London and international store was opened in Paris by 1910. In 1920 Burberry entered Japan market and cooperated with local retailers. In the past years, Burberry was quite successful, various resources and capabilities having been invested and improved, also different kinds of strategy were applied for its business. In this essay, three main points will be discussed as follows: * Identifying Burberry’s resources and value
* Appraising Burberry’s resources and capabilities to analyse organisational competence * Finally, developing Burberry’s strategies.
“Resources are the productive assets owned by the firm.” (Grant, 2005) There are three types of resource: Tangible, Intangible and Human resource. Tangible resource is quite easy to identify, which includes financial resources and physical asserts. It can be seen from Burberry’s Balance sheet, from 2008 to 2012, the net asset of Burberry increased each year and Total Equity achieved ￡891.40 million in 2012 March. (London Stock Exchange, 2012) According to Thomson (2012), Burberry has 443 stores including 56 franchises in 80 countries and Europe is its biggest market with 34% of sales, and Asia follows with 33% of sales. Furthermore, Burberry got two London lines, which support Span and Japan market. Intangible resource is difficult to indentify, which more valuable than tangible resource and including technology, reputation and culture. In Burberry stores, every salesman has an ipad orders and checks product online for customer and “Burberry’s use of digital technology is trailblazing.” (Thomas, 2012) Moreover, Burberry got good reputation and brand image, since it was established, which provided high quality products and got own unique style that be easily identified. Human resources “comprise the expertise and effort offered by employees.” (Grant, 2005) Burberry has a design term and provides their design for the Burberry London line and control the design direction of other lines. Christopher Bailey, as a design director takes the responsibility for the design of the Burberry prorsum collection. (Moore and Birtwistle, 2004) Burberry also focuses on employing and tries to find the very best people work for them. Burberry has a long history, and its process of establishing luxury brand image is a long term task, which are Burberry’s significant value and its value base on the resources and Capabilities. Grant said (2005), “individual resource do not confer competitive advantage alone, they must work together to create organisational capability, and which is what the firm can do.” (p114)
Appraising Resources and Capabilities
Organisational capabilities offered the dynamic for firms’ continuing growth, the “industries which they dominated and the national economies in which they operated.” (Chandler, 1992, P84) In Burberry group, modularity and co-operative strategy is an internal organisational capability was...
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