Global Marketing: Burberry in China, PESTLE analysis
Global Marketing Assignment:
Burberry need to scan their market segments in order to gain the most competitive advantage. Pestle analysis looks at the political, economic, social, technological, legal and environmental factors that affect an organisation providing a ‘comprehensive list of influences on the possible success or failure of strategies’ (Johnson, Whittington, Scholes, 2011). However, the three main changes that focused on in this essay are Economic, Social and Environmental factors. The economy within China is currently very stable; being a part of the 4 fastest growing economies in the world (BRIC: Brazil, Russia, India, China), it has made large strides in recent years in the business and industrial sector. , the country has sustained a continual rapid growth in term of GDP per person, indicating that each people is creating more and more values to the society resulting in the increase of the individual consumers’ purchasing power. Though the economic situation is seems to be good, the economic development does slow down a little and also with worrying trends such as high inflation rate and high property prices. According to the most recent news, the consumer price index rose 6.1 per cent from a year earlier in September, down from a three-year high of 6.5 per cent in July. Politically sensitive food prices, however, increased by more than 13 per cent. The overall economy has now slowed for three consecutive quarters. In this case, if Burberry were to expand into China they would need to be aware of the fluctuations within China over inflation rates; this has caused ripples in consumerism, as more people are saving money for necessities.
In terms of socio-cultural factors, the culture is not the same throughout the whole country, the west tends to earn 2.26 times more than workers in the west of the country. Therefore locations of the company’s stores would be vital. In 2010, China’s online shopping industry had a turnover of $80bn, and grew 87%
Burberry need to scan their market segments in order to gain the most competitive advantage. Pestle analysis looks at the political, economic, social, technological, legal and environmental factors that affect an organisation providing a ‘comprehensive list of influences on the possible success or failure of strategies’ (Johnson, Whittington, Scholes, 2011). However, the three main changes that focused on in this essay are Economic, Social and Environmental factors. The economy within China is currently very stable; being a part of the 4 fastest growing economies in the world (BRIC: Brazil, Russia, India, China), it has made large strides in recent years in the business and industrial sector. , the country has sustained a continual rapid growth in term of GDP per person, indicating that each people is creating more and more values to the society resulting in the increase of the individual consumers’ purchasing power. Though the economic situation is seems to be good, the economic development does slow down a little and also with worrying trends such as high inflation rate and high property prices. According to the most recent news, the consumer price index rose 6.1 per cent from a year earlier in September, down from a three-year high of 6.5 per cent in July. Politically sensitive food prices, however, increased by more than 13 per cent. The overall economy has now slowed for three consecutive quarters. In this case, if Burberry were to expand into China they would need to be aware of the fluctuations within China over inflation rates; this has caused ripples in consumerism, as more people are saving money for necessities.
In terms of socio-cultural factors, the culture is not the same throughout the whole country, the west tends to earn 2.26 times more than workers in the west of the country. Therefore locations of the company’s stores would be vital. In 2010, China’s online shopping industry had a turnover of $80bn, and grew 87%
References: Agnilar, F.. (1967) Scanning The Business Environment, Macmillan, New York, p.47. Hofstede Centre, http://geert-hofstede.com/china.html [Accessed: 5th November 2013] Hofstede, G, (1980), Culture’s Consequences, Sage Publications, CA Johnson. G, Whittington. R, Scholes. K, 2011, Exploring Strategy, Pearson, England Keegan Kotler, P., (1988) Marketing Management: Analysis Planning and Control, Prentice-Hall p. 102. Martin, A, 2012, Marketing Management: Burberry, http://prezi.com/pnirxtdktlox/burberry/ [Accessed:2nd November 2013] MindTools, 2013, http://www.mindtools.com/pages/article/newLDR_66.htm [Accessed: 2nd November 2013] Mintzberg. H, Lampel. J,Ghoshal. S, 2002, The Strategy Process: Context, Concepts, Cases, Prentice Hall, England Paul, J, (2011), International Business, Fifth Edition, PHI Learning Pvt