Burberry Analysis of the Competitive Environment

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Burberry
Analysis of the competitive environment The aim of this essay is to provide brief and structured analysis of the competitive environment of a Burberry. RENATA GECAN MILEK 19.11.2012

Professional MBA Business Core 2012-2014 Competitive Analysis and Strategy Business Core Class 3

1.

Introduction

The aim of this essay is to provide brief and structured analysis of the competitive environment of a Burberry. In the first part I will briefly present luxury goods sector, trends, and in the second part of this essay I will analyse Burberry using Porter’s Five Forces analysis. 2. Luxury Goods

Luxury goods are products and services that are not considered to be essential and are associated with affluence1. Some luxury products are considered to be a Veblen goods named after economist Thorstein Vebler in 18992. Demand for Veblen goods decreases as their price decreases and opposite. Classic luxury goods include haute couture clothing, accessories and luggage, automobile, wines, bottled water, tea, watches, jewellery, some services. 3. Latest trends in luxury goods sector

According to Altagamma and Bain Study on luxury goods worldwide luxury goods sector recorded a constant growth since 1995. South East Asia has around 600M inhabitants. Consumers are setting younger and more educated. Preferences for branded products are growing. Online availability of products is important. Central Eurasia is next interesting geographic area. Turkey will play an important role as a hub for the area. South Africa as one of the leading global sources of platinum, gold, diamonds and ostrich leather is showing growing demands for luxury goods. South Africa has 71K millionaires. By 2020 420.000 households will have over 100K$ of disposable income. According to these study Chinese customers weights for over 20%, Asians customers weights for more than 50%. Asia has younger customer base versus Europe, US and Japan with ageing customers base. Emerging markets account...
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