Burberry Strategy
INTRODUCTION
It is important for every business to clearly understand how resources and capabilities affect firm performance. As Grant (2005) defined, resources are the productive assets owned by the firm and capabilities are what the firm can do. In fact, companies that have sustainable competitive advances have been developed and exploited based on their internal resources and capabilities. Furthermore, they have successfully exploited external environment. In this essay, I will explore the topic area of ‘Resources & Capabilities’ with regards to a UK’s fashion group; the prominent designer label, Burberry GRP. In particular, the research will focus on the Strategic Business Unit of Burberry; understanding and explaining how they utilize the resources and competencies to achieve a competitive advantage. In order to do this, this paper will address on theory based from work in the areas of the ‘Resource-Based View’ and ‘Resources and Capabilities’ as well as using theoretical frameworks to give a holistic view of the strategic issues Burberry.
After their reform, Burberry recovered rapidly, after the crisis of September, 2008. With 500 stores in over 50 countries, total revenues grew from 27% to £1,501 million which is more than double its nearest rival, Chanel (with total revenues of £ 651, 3). Retails revenues reached £ 962 million and wholesale achieved £ 441 million (Burberry’s a and Chanel financial report, 2012). As a result, Burberry has substantial surplus resources and is therefore able to withstand and compete in the hypercompetitive fashion market sector. Thus, Burberry achieved brand value up to more than £ 2, 5 billion in 2012. Gucci, Prada and Chanel gained approximately of £ 5.8, £ 4.95, and £ 4.2 billion respectively.
BODY
The Resource-Based View
In 1990s, the role of resources and capabilities become known as the basic for firms strategy and the primary source of profitability coalesced has become the resource-based view.
It is important for every business to clearly understand how resources and capabilities affect firm performance. As Grant (2005) defined, resources are the productive assets owned by the firm and capabilities are what the firm can do. In fact, companies that have sustainable competitive advances have been developed and exploited based on their internal resources and capabilities. Furthermore, they have successfully exploited external environment. In this essay, I will explore the topic area of ‘Resources & Capabilities’ with regards to a UK’s fashion group; the prominent designer label, Burberry GRP. In particular, the research will focus on the Strategic Business Unit of Burberry; understanding and explaining how they utilize the resources and competencies to achieve a competitive advantage. In order to do this, this paper will address on theory based from work in the areas of the ‘Resource-Based View’ and ‘Resources and Capabilities’ as well as using theoretical frameworks to give a holistic view of the strategic issues Burberry.
After their reform, Burberry recovered rapidly, after the crisis of September, 2008. With 500 stores in over 50 countries, total revenues grew from 27% to £1,501 million which is more than double its nearest rival, Chanel (with total revenues of £ 651, 3). Retails revenues reached £ 962 million and wholesale achieved £ 441 million (Burberry’s a and Chanel financial report, 2012). As a result, Burberry has substantial surplus resources and is therefore able to withstand and compete in the hypercompetitive fashion market sector. Thus, Burberry achieved brand value up to more than £ 2, 5 billion in 2012. Gucci, Prada and Chanel gained approximately of £ 5.8, £ 4.95, and £ 4.2 billion respectively.
BODY
The Resource-Based View
In 1990s, the role of resources and capabilities become known as the basic for firms strategy and the primary source of profitability coalesced has become the resource-based view.
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