Imagine yourself in the British army during World War I. You probably imagined yourself in a long trench coat that protects you from harsh weather during the war. But did you know Burberry, the leading fashion house in the UK, made that trench coat? Probably not.
Today we will discuss the internal and external factors affecting the operations of one of the world’s leading clothing brands, Burberry. To do that, we will be conducting a Burberry SWOT Analysis, which will accompany our PESTLE analysis of Burberry.
Burberry is a renowned fashion house that offers different products used by men, women, and children. Currently, the fashion house provides products other than clothes, such as shoes, bags, fragrances, and much more.
However, the beginning of Burberry was quite different from what the brand now looks like. So first, let’s look at the history of the brand. We can see that the roots of Burberry can be traced back to 1856 when a 21-year-old guy named Thomas Burberry started designing clothes at home that would protect the people of Britain from harsh weather conditions.
After working for more than twenty years in the clothing industry, Burberry introduced a fabric after intensive research named the gabardine fabric. This fabric was made specifically to counter the weather conditions of the UK.
The Gabardine had some unique qualities. For example, it was weatherproof, breathable, and hard-wearing fabric. Burberry revolutionized rainwear by introducing Gabardine.
Over the years, Burberry expanded its operations across Britain. It modernized its operations by improving its manufacturing process. In 1934, Burberry started offering same-day delivery across London in its own vehicle.
As the market became competitive, Burberry realized the importance of marketing. That’s when it decided to sponsor a flight from Croydon to Cape Town, which broke records. This marketing strategy helped the brand in increasing its consumer base.
Burberry kept on growing as time went by. In 1972, the clothing brand achieved the milestone of having one out of every five coats exported from Britain.
After operating for more than a century, Burberry finally decided to go public by listing itself on the London Stock Exchange in 2002.
From producing weatherproof clothes and trench coats to fashionable clothes, footwear, and accessories for both genders, Burberry has come a long way. Currently, Burberry is operating worldwide by opening hundreds of stores across the globe.
Besides generating such a high revenue for itself, Burberry contributes significantly to the world’s economy by employing 9,293 employees of different ethnicities.
After discussing the history and the current operations of Burberry, let’s proceed further and carry out Burberry’s SWOT analysis. However, before that, you need to know what SWOT analysis is.
A SWOT analysis enables us to examine the strengths, weaknesses, opportunities, and threats businesses and other organizations face. A SWOT template helps us analyze the influence of internal and external factors on an organization’s operations.
Now that we’ve discussed the significance of SWOT analysis, let’s proceed further and conduct Burberry’s SWOT analysis.
Every organization has several strengths that enable it to compete in the market. Businesses always try to increase their strengths by working on them. In this first section of the SWOT analysis, we will highlight some of the strengths that Burberry possesses.
Strong Global Presence
Brands look forward to expanding their operations internationally so that they can increase their customer base to increase their revenue.
Burberry is one of the brands that operate across the globe. Although initially, it started its operations in a small town in the UK, later, it spread its operations worldwide. As of 2022, Burberry is present in 34 countries with thousands of customers.
Every brand looks forward to having such a strong global presence because such an international presence helps Burberry to increase its revenue.
Efficient use of marketing is necessary for brands to achieve growth. However, having the right marketing strategies and direction to market your product is essential.
For example, remember the last time you saw an advertisement for Burberry on your TV? Probably never. This is because Burberry knows the most effective way to reach its audience is through fashion magazines like Vogue, GQ Elle, etc.
Besides, the brand has been promoting itself with celebrity endorsements to push its customers into buying luxury products such as cloaks and evening bags.
This type of focused marketing helps Burberry from making unnecessary expenditures on marketing which benefits the brand financially.
Holds Royal Warrant
Besides achieving milestones financially, holding a royal warrant is the highest token of appreciation a brand can get. Many brands have been operating for centuries, yet they cannot get a Royal warrant. However, Burberry is one of the brands that possess a royal warrant.
The Burberry brand has a royal warrant, which means that its customers can trust that once Burberry products are used by the royal family, either at Buckingham Palace or Clarence House, they will maintain the same high standards of quality and durability. This has added considerable value to the brand.
Weaknesses are the shortcomings due to which organizations are pushed out of the market in the long run. Similar to strengths, all organizations possess weaknesses. Let’s look at some of the weaknesses of Burberry.
Brands try to keep their prices lower than competitors to attract more customers. Low prices always attract customers even if the quality of the product lacks a bit. However, it is sometimes difficult for brands to keep their prices low due to high operating costs.
Burberry has been in the market for years now. Since the demand for Burberry has increased over the years, the products of Burberry have reached families’ wallets.
Although pricing suggests quality and desirability, Burberry products’ high price range has made them reachable to only a few customers. Due to this, its customers may switch to other brands in the future.
High Reliance on the Asian Market
In business, a saying goes like “Never keep all your eggs in one basket.” This quotation tells us to diversify our risks. Brands tend to expand internationally to minimize their reliance on the domestic market.
Burberry is also among those brands that moved to other countries so that it could stop relying on the market in Britain. However, Burberry currently relies heavily on the Asian market since it generates most of its revenue from the Asian region.
In case of a recession in the Asian market, the demand for the products of Burberry would fall, causing significant damage to Burberry.
Brands that want to dominate and increase their market share find ways to diversify their product line to increase their customer base.
Moreover, brands diversify their risks by offering different types of products. For example, suppose the revenue from one product reduces in the future. However, the brand would still have other products to generate revenue.
Burberry has limited its product line by only offering clothing products, beauty products, and accessories. Due to such limited products, Burberry doesn’t have the opportunity to increase its customer base and revenue.
Every brand looks forward to availing of the right opportunities at the right time to attain growth in the future. This section will help us analyze what opportunities Burberry has to consolidate its position in the market.
Change In Lifestyle
Over the years, people’s lifestyles have evidently changed across the globe. With every passing year, the global GDP is increasing, which shows the standard of living is improving daily.
Burberry, being a brand that offers luxurious products, has an opportunity to gain maximum from improving global living standards. The brand should improve its marketing to target more potential customers.
Target Developing Economies
Brands often target developed economies to expand their operations while ignoring developing economies, thinking there’s no use in investing in them. Businesses need to understand that it’s not the right approach.
Developing economies experience soaring demand. Burberry can benefit from this increase in demand by penetrating more into developing economies such as India, Bangladesh, Chad, etc. This move can benefit Burberry in increasing its revenue.
Brands often start by offering a single product. However, as they realize the importance of having a diverse product line, they introduce new products. This strategy works to increase the existing customer base of the brand and its revenue generation.
Burberry has had a limited product line for the longest time, but as we say, “it’s never too late.” As a result, Burberry has an opportunity to offer more products. For example, Burberry can start offering home products like Zara home.
This will help Burberry tap into more markets and increase the brand’s customer base.
Every brand faces threats from the external environment. It is essential to overcome these threats before they start harming the brand. This last section of Burberry’s SWOT analysis sheds light upon the threats faced by Burberry. Let’s proceed further and see what threats Burberry faces.
The Fashion Industry is one of the most competitive industries since consumers have many options. As you dig deep into the fashion industry, multiple brands offer great quality products at reasonable rates.
As these brands continue to expand their operations and market share in the fashion industry, Burberry is concerned about its position in the market.
Imitation of Products
One of the things that worries any brand is its bad reputation. However, in the fashion industry, it is very common for brands to have a bad reputation because of the products that they didn’t even manufacture.
Small manufacturers often copy the products of big fashion houses and sell them at low prices. Although these products have no relationship with the brand, they are associated with the original brand.
Burberry faces threats of getting its products imitated because these products can damage its reputation.
A recession is considered a nightmare for businesses since it lowers the standard of living, which causes the demand in the economy to drop. However, after COVID-19 and the war between Russia and Ukraine, economists believe a global recession is just around the corner.
If the world enters a recession, the demand for Burberry products will drop. This will have adverse effects on the revenue of Burberry.
Burberry is a Uk based fashion brand. It is currently considered one of the leading fashion houses in the world. The brand has managed to keep itself relevant after more than 150 years.
In this article, we discussed how Burberry evolved with time and spread its operation to become a royal warrant-holding brand.
We first started off by discussing the history of Burberry, then we moved ahead and discussed its current operations. After that, we proceeded ahead and conducted its SWOT analysis.
In this SWOT analysis, we found out the internal and external factors that affect the operations of Burberry. This SWOT analysis highlighted the strengths and weaknesses possessed by Burberry. Besides that, it also sheds light on the opportunities and threats for Burberry.
The findings of this SWOT analysis can also be presented through a SWOT Matrix or a SWOT table. After reading this article, you must have understood how to conduct a SWOT analysis. If you are still confused, look at some SWOT analysis examples to clarify your concepts.