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Analysis of the Case Burberry

SHR027-6
International Business Environment
Dr Samar Baddar

0909220
Sichen Wei

Executive Summary
Burberry which was founded in 1856 is a leading luxury brand in the world. One of the Burberry factories intended to close and move production from Walse to China. This means that three hundreds workers will lose their jobs. They compaigned to protest the closure and the Trade Union which is an organisation with the purpose to protect workers’ rights has successfully put off the date of the closure date. As the Burberry HR Director, I am asked to give a strategic meeting about the closure announcement.

This report aims to use the PESTEL and SWOT tools to analyze the environment in China. According to the advantages and disadvantages of the factory move, some recommendations are given to Burberry for moving to China and help the company to adapt to the situation of China. At last, I propose a proper action plan for Burberry.

Table of Content
Executive Summary.................................................................................................1

Introduction..............................................................................................................3

Analysis (Findings)……………………………………………………………………..3

PESTEL in China…………………………………………………………………..3

SWOT Analysis…………………………………………………………………….5

Advantages and Disadvantages of the Factory Move…………………………6

IHRM Approaches………………………………………………………………….7

Conclusion………………………………………………………………………………8

Recommendation……………………………………………………………………….8

Action Plan…………………………………………………………………………9

References………………………………………………………………………………10

Introduction
Since 2006, Burberry has become the top luxury brands as the internationally recognized, and the networks of products selling are around the world. Recently, because of the high cost of producing in Welsh factory, Burberry decided to close it and move to China. In UK it almost takes 12 Pounds to make one of the polo shirts while 4 Pounds in the Far East. It is an issue of costing. Burberry attempts to reduce the cost and makes more margin profits. However, the closure results in the loss of three hundred jobs, which means that three hundred workers will be laid off. The workers campaign to try to keep their jobs. It is difficult for Burberry to make a decision whether they move or not.

In this report, I will analyze the environment of China by using the tools of PESTLE and SWOT analysis. As for moving to China, there are advantages and disadvantages. I will compare the opportunities and threats to help the company make a wise decision. Finally, according to the determination, I will give some recommendations. And an action plan will be put forward as well.

Analysis (Findings)
PESTEL in China
Nowadays, more and more luxury brands have entered or intended to enter the Chinese market. PESTEL is a tool to analyze the external environment in the market, which comprises of political, economic, social, technological, environmental and legal factors. (Leslie W. and Philip W, 2009)

← Political: The government in China has provided a board policy for the luxury goods industry. Foreign-funded enterprises will enjoy the same tax policy as the Chinese domestic enterprises. The Chinese government pursues a strategy of opening up in foreign investment, and treats foreign-funded enterprises and domestic enterprises equally without discrimination. Also the luxury goods industry has made a contribution for the promotion of economic development. In China, in order to attract foreign investment and promote economic development, the taxation legal system provides various forms of tax incentives. Therefore, this is a good opportunities for the companies to set up plants in China.

← Economical: With reforming and opening up, China is a broad and stable, and the most potential development...
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