BURBERRY’S NEW CHALLENGES
CASE STUDY SOLUTION
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SYNOPSIS
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By 2016, both the brand image and financial position of London-based luxury fashion brand Burberry had
improved, thanks to leadership from the previous chief executive officer (CEO) Angela Ahrendts and the
new CEO, Christopher Bailey. However, the company had new problems to worry about. Changes within
the fashion industry were beginning to have an important influence on luxury brands. Fast fashion
n
companies, which had a strong supply chain and quick production, created indirect competition and a
need for constant innovation from luxury leaders, and this led to increasingly frequent fashion shows that
tio
strained the resources of fashion designers by cutting into their creative development process time.
Digital technology and new communication platforms had also had a significant effect. Although they
lu
spent millions of dollars on advertising and communication, Burberry and other luxury brands no longer
had full control over communication of their brand images due to social media—bloggers, Facebook,
So
Instagram, and customer reviews on various online retail sites—and they needed to come to terms with
the growing importance of conversing with their clients.
Furthermore, luxury brands needed to tackle these changes in their environment while also responding to
The Case Solution Starts From page 4
,• Analyze the unique key success factors of a luxury business and explain how they contribute to
maintaining a consistent brand image.
• Identify the areas of a luxury business that are affected by external changes such as fast fashion,
digital technology, and changing customer expectations.
• Outline the importance of recognizing and adapting to changing customer demands.
• Identify appropriate follow-up actions that the company should take in response to industry changes
in order to better position itself for future growth.
• Understand the effects on the supply chain and the financial implications of operational changes in a
business.
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ASSIGNMENT QUESTIONS
1. What are the main challenges facing Burberry? As CEO, what actions would you take to deal with
these challenges? Where would you focus your resources?
2. In the digital world, fashion shows are aired live to the public, fast fashion brands replicate the
catwalk designs of luxury brands within weeks, and customers demand constant change. How do
luxury brands like Burberry remain successful and differentiate themselves from fast fashion brands
in this new age?
3. What actions should luxury brands take to deal with the impact of digital technology on customers’
perceptions of their brands?
The Case Solution Starts From page 4
,4. What actions should Burberry take with regard to the industry-wide challenges it faces? Should
Burberry take a first-mover approach or a wait-and-see approach?
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ANALYSIS
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1. What are the main challenges facing Burberry? As CEO, what actions would you take to deal
with these challenges? Where would you focus your resources?
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The company’s current situation can be discussed using an informal analysis of five key factors that affect
Burberry’s operations: context, company, customer, competitors, and collaborators.
So
Context
• All luxury brands are now online, in one way or another.
• There is a social fashion trend that favours mixing and matching fast fashion pieces with luxury
pieces.
• A 360-degree model of communication—a trend towards online conversation instead of pure
marketing—means that brands no longer have absolute power over their brand image due to the
presence of bloggers, social media, and online reviews. All forms of communication (marketing,
public relations, selling, and customer service) must align with each other. Customers must receive
the same brand experience, regardless of where they interact with the brand. To discuss this point, the
instructor can refer to the Mckinsey diagram Circular Customer Decision-Making Process (see case
Exhibit 6).
• Designers are overworked, which can affect the creativity period of the design process and lead to
loss of top talent, thereby hindering the brand’s future.
The Case Solution Starts From page 4
CASE STUDY SOLUTION
e
pl
SYNOPSIS
m
Sa
By 2016, both the brand image and financial position of London-based luxury fashion brand Burberry had
improved, thanks to leadership from the previous chief executive officer (CEO) Angela Ahrendts and the
new CEO, Christopher Bailey. However, the company had new problems to worry about. Changes within
the fashion industry were beginning to have an important influence on luxury brands. Fast fashion
n
companies, which had a strong supply chain and quick production, created indirect competition and a
need for constant innovation from luxury leaders, and this led to increasingly frequent fashion shows that
tio
strained the resources of fashion designers by cutting into their creative development process time.
Digital technology and new communication platforms had also had a significant effect. Although they
lu
spent millions of dollars on advertising and communication, Burberry and other luxury brands no longer
had full control over communication of their brand images due to social media—bloggers, Facebook,
So
Instagram, and customer reviews on various online retail sites—and they needed to come to terms with
the growing importance of conversing with their clients.
Furthermore, luxury brands needed to tackle these changes in their environment while also responding to
The Case Solution Starts From page 4
,• Analyze the unique key success factors of a luxury business and explain how they contribute to
maintaining a consistent brand image.
• Identify the areas of a luxury business that are affected by external changes such as fast fashion,
digital technology, and changing customer expectations.
• Outline the importance of recognizing and adapting to changing customer demands.
• Identify appropriate follow-up actions that the company should take in response to industry changes
in order to better position itself for future growth.
• Understand the effects on the supply chain and the financial implications of operational changes in a
business.
e
pl
m
Sa
n
tio
lu
So
ASSIGNMENT QUESTIONS
1. What are the main challenges facing Burberry? As CEO, what actions would you take to deal with
these challenges? Where would you focus your resources?
2. In the digital world, fashion shows are aired live to the public, fast fashion brands replicate the
catwalk designs of luxury brands within weeks, and customers demand constant change. How do
luxury brands like Burberry remain successful and differentiate themselves from fast fashion brands
in this new age?
3. What actions should luxury brands take to deal with the impact of digital technology on customers’
perceptions of their brands?
The Case Solution Starts From page 4
,4. What actions should Burberry take with regard to the industry-wide challenges it faces? Should
Burberry take a first-mover approach or a wait-and-see approach?
e
pl
m
Sa
n
ANALYSIS
tio
1. What are the main challenges facing Burberry? As CEO, what actions would you take to deal
with these challenges? Where would you focus your resources?
lu
The company’s current situation can be discussed using an informal analysis of five key factors that affect
Burberry’s operations: context, company, customer, competitors, and collaborators.
So
Context
• All luxury brands are now online, in one way or another.
• There is a social fashion trend that favours mixing and matching fast fashion pieces with luxury
pieces.
• A 360-degree model of communication—a trend towards online conversation instead of pure
marketing—means that brands no longer have absolute power over their brand image due to the
presence of bloggers, social media, and online reviews. All forms of communication (marketing,
public relations, selling, and customer service) must align with each other. Customers must receive
the same brand experience, regardless of where they interact with the brand. To discuss this point, the
instructor can refer to the Mckinsey diagram Circular Customer Decision-Making Process (see case
Exhibit 6).
• Designers are overworked, which can affect the creativity period of the design process and lead to
loss of top talent, thereby hindering the brand’s future.
The Case Solution Starts From page 4
