STRATEGIC PLANNING AND FINANCE FOR MANAGERS ASSIGNMENT SAMPLE
Introduction
The importance of making strategic planning is essential for maintaining the health and growth structure of the company. In this assignment, the condition of the UK fashion industry during the Covid 19 is also going to be explained. In order to provide a practical approach, Burberry is considered the fashion brand in Uk. Models of strategic analysis are going to be provided. Different strategic options of the company are going to be provided with the help of models like the Ansoff matrix. The financial source of the company and future development planning is also going to be highlighted.
1. Strategic analysis models
PEST
| Name of factors | Effects | Impact |
| Political | ● Uk combines several countries such as Scotland, Northern lands, Wales and England, the chance of expansion is good
● The government of the Uk encourages international trade ● Political strength is considered to be a major strength of the Uk |
Positive |
| Economical | ● The rate of employment is 75.7% and had decreased by 0.9 post covid
● 45 % is the taxation rate for an income bracket of £150,000 (pestle-analysis-UK, 2022) ● The rate of the inflation rate is expected to reach 13.3 % and the current rate is 9.4% |
Negative |
| Social | ● The education rate in Uk is 83 % and it ranks among the top countries in the world (pestle-analysis-UK, 2022)
● Diversification and gender equality are strong points of the UK with a population of 68.5 million. |
Positive |
| Technological | ● The operations in Uk are data-driven
● Uk ranks 5th in terms of technological development ● The scope of AI implementation is high |
Positive |
Table 1: Evaluation of Uk with Pest analysis
(Source: pestle-analysis-UK, 2022)
As per table 1, Political factors can be challenging but helpful in the case of Burberry, because during Covid due to strict government rules Burberry had to close different stores in the UK. However, the government is supportive and can encourage businesses to grow. The Economic factor is challenging as the inflation rate is increasing. It will reduce the buying ability of common citizens and the rate of taxation is also high, reaching up to 45% (burberryplc.com, 2022). In terms of social factors, it is favorable for Burberry as the education rate is 83% which reflects customers are well aware of quality and brand information. In the case of technological factors, Uk is data-driven and it ranks 5th in terms of technological development (Alava et al. 2018). Thus if Burberry implements any technological up gradation in their online application then it will be accepted by the customers.
Porter’s five forces
Threats from Entrants: Low
Burberry started its operation in the 19th century also well known for its quality as well. The company attracted the attention of the audience by introducing trench coats that are comfortable and stylish and waterproof (Wu et al. 2022). It had gathered a huge audience and its position in the market could not be compromised by any new entrants thus, the risk is low.
The threat of substitutes: High
The touch of versatility in Burberry clothing is less. It had significantly made a remark in its trench coats segment. They had also tried to sift to other clothing options but the profitability was minimal (Jelonek, 2022). This can be an advantage of the substitute companies like Prada and Gucci as they have a large variety of products. Thus the risk from substitutes is high and Burberry should focus on versatility.
The bargaining position of customers: Low
Customers prefer Burberry for a different type of Legacy; their products are related to historic events. Most aristocratic families in the Uk prefer this brand and there are very few brands that can match their status (Kieltyka et al. 2022). This is the reason the bargaining position of the buyers is less, Barberry is taken as a luxury brand, and the scope of bargaining for high-end customers is less.
The bargaining position of suppliers: Low
The sources of suppliers are numerous; the brand mainly chose them from Uk and Italy. This can give them the ability to choose and change the supplier as per their preference. This is the reason the pressure on Burberry from the supplier’s end is low.
Competitive rivalry: High
There are several existing competitors of Burberry in the UK fashion industry. Companies such as Louis Vuitton, Prada, Armani and Gucci are some of the direct competitors. It is suggested that Burberry needs to focus on providing a different set of services to its customers so that it can create a significant position in the market in terms of maintaining its product lineups.
SWOT analysis
| Strength
● Focused branding, by celebrity endorsement and promotion in magazine ● Gained royal warrant two times (side.co, 2022) ● Presence in social media |
Weakness
● Affordability is low ● The product lineup is inadequate ● Asian market |
| Opportunity
● Collaboration with other brands ● Expansion of product line ups ● Understanding the emerging markets
|
Threat
● Have to operate in a competitive environment ● Changes in customer preference ● Threats from fake products |
Table 2: Evaluation of SWOT analysis
(Source: de.co, 2022)
As per table 2, the strength of Burberry is that it has endorsed Kate Moss and Robert Pattinson who are the greatest stars in Hollywood. It also gets promoted frequently in magazines like Glamor, Vogue and GQ. There are certain weaknesses such as the price range, due to high celebrity endorsement and other high-budget advertisements the products of Burberry are very high and they can be afforded by a small group of people in the UK (iide. co, 2022). The assassin maker prefers affordability rather than luxury influence, thus it needs to re-consider the approach. As an opportunity, collaboration with other business brands can be helpful for the organization. Sifting their product lineups from clothes to other items can also be a turnaround for the company (Ferras‐Hernandez and Nylund, 2019). Due to the highly competitive market in Uk, the growth is limited. There is also a threat from fake products that looks and feels similar.
Ansoff matrix
| Market development
The company has utilised their existing products so that it can reach out to local customers. They have placed their stores in prime locations such as Dubai, Moscow and London. ● It had helped them to get new customers (researchgate.net, 2022) ● Improvement of new products is possible ● Expansion beyond physical boundaries |
Diversification
With the help of new acquisitions, it is able to enter new markets. The collections shown on the runway are directly available on their online website and stores. This provides around 5% of the retail revenue of the country. ● Better availability of products ● Attracts more customers for customized options |
| Market penetration
Burberry utilized a new form of technology that helped them to open a new range of technology. The availability of the products on e-commerce platforms had drawn a separate base (Choiriah and Sudibyo, 2020). On Snapchat, Instagram, and Facebook their advertisements are running. Famous in terms of manufacturing Trench coats, creating diffusion for a young range of customers |
Product development
Burberry offered new products that had reinforcing British brands so that they can provide more value to the customer. ● This helped them to launch a new set of products in the market. ● The aim of their products is to create brand identity and uniqueness. |
Table 3: Evaluation of Ansoff matrix
(Source: researchgate.net, 2022)
Safe evaluation
It is a type of tool that is used for understanding the situation of the business and based on certain suggestions are provided.
Burberry has faced different types of challenges so that it can mitigate different forms of business evaluation. Combining the forces of finance had helped to maintain the type of activity for better estimation of resources (burberryplc.com, 2022). This is considered to be a better financial option for inventors. It is suggested that the investor can hold on to the shares of the company so that they can estimate the business requirements (Benzaghta et al. 2021). It can help to provide different forms of profitability to the business for better estimation of resources.
2. Strategic options
Stability
In terms of stability, Burberry had significantly created a place in the fashion industry. The company is currently operating in 59 different countries. The technology they have used for waterproof clothing that is comfortable to wear is better for the company. It has introduced 418 different stores in the world, which is a fair indication of its stability and sustainability. It has a balanced online presence on YouTube, Face book and other social media channels.
Feasibility
In terms of managing resources, Burberry is significantly better than its competitors. The market penetration is strong and helps to develop better sources of action for the business. Developing the causes and action, Burberry is doing good in its segments.
Acceptability
The combined follow-up is above 50 million and the company has expanded to 20 different social platforms. This helped them to create a different segment of combination for the business. The variation of resources is helpful in terms of maintaining the sources of activity.
Application of models
In the year 2017, the company implemented the growth strategy of transformation which helped them to reach a position in the luxury segment. The main business model is to provide an effective influence on the business that helps to bring business operation for the better implication of resources (Kurniawan et al. 2020). The sources of business had helped them either to implicate the situation for better estimation of resources (burberryplc.com, 2022). Improving business qualities can help to bring better opportunities and estimations for the course of business operations.
3. Methods for sources of finance
Future development of business
In the future, the company aims to supercharge its sales figure for better business evaluation. Brand engagement has helped to improve business opportunities. Improving the course of action can provide better opportunities in the end (Pantano et al. 2022). The leather categories and the outwear ranger need to be improved and it is equally aiming to become more budget-friendly so that the affordability is increased.
The promotional strategy of the company is needed to be changed and this will help them to expand their branches beyond the physical boundaries. It is also aiming to improve the digital presence in a better place (Geyer-Klingeberg et al. 2020). There are different modes of business activities so improving the course could be better for their actions. Imitating the strategies can help to improve the course of business articulation (Daradkeh et al. 2018). Implementing these activities can bring a variance for a better approach to the customer-centric nature of the company. Improving the sources of development measures a for a better grip on the future activities of the organization.
Sources of finance
The brands had recently taken a credit facility of £300 so that they can expand their research and development team. Other than this equity is one of the backups for better evaluation of future influence. The estimation of different types of business activities can create a mode of business implication so that they can be better in terms of improving the course of action (Timmermann, 2018). It is also essential for the company to ensure its importance. This is the reason behind the course of operations.
Conclusion
It can be concluded that understanding the business strategy is better in terms of maintaining the action of the company. Burberry’s business strategy is highlighted in this project and maintaining the business operation is equally helpful in terms of maintaining business operations. The models of business strategy helped to understand the market placement of the company. It has also helped to understand the operations and the situation of the company. This has helped to improve the course of business operations. The sources of finance and business requirements also improved the business actions. Thus, it can be seen that Burberry had seamlessly created its remark in the fashion industry of the UK. However, it needs some developments in its variation of products so that it can remain in a sustainable position.
References
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Choiriah, S. and Sudibyo, Y.A., 2020. Competitive Advantage, Organizational Culture and Sustainable Leadership on the Success of Management Accounting Information System Implementation. Saudi Journal of Economics and Finance, 4(9), pp.481-486.
Daradkeh, Y., Gouveia, L. and Sen, S., 2018. Strategic Thinking and Brands move to the Digital transformation. Matter: International Journal of Science and Technology, 4(1), pp.88-105.
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mbaskool.com, Five forces, Retrieved on 4th August, from: fromhttps://www.mbaskool.com/five-forces-analysis/companies/18347-burberry.html
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Wu, P., Zhao, G. and Li, Y., 2022. Green Mining Strategy Selection via an Integrated SWOT-PEST Analysis and Fuzzy AHP-MARCOS Approach. Sustainability, 14(13), p.7577.
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