Strategic Management

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Introduction:

Strategic Management:This report will evaluate the current structure of the company, and will analyse how the strategy suggested can be implemented. The strategy suggested in this report for the growth if Burberry group is Product modification and market expansion.

Strategic Management. Product modification is developing new products or modifying existing products to target new customers to satisfy the needs of changing life styles of new customers.

In Product modification strategy, report will analyse the current product mix, current governing structures and how new strategies can be implemented in order to keep up with the growing market and increase revenue.

According to studies and different SWOT analysis conducted by researchers, there is a need for product innovation according to changing fashion trends, in order to increase revenue and be the best in the existing market, Burberry can modify products and introduce new products for new markets i.e. India.

The suggested strategy in terms of structure is creation of research and design units that will work on finding the requirements of design in each region, and how to increase the revenue and expand in that market. The products can be modified according to needs of the new market and that will help the company in gaining brand loyalty in new markets.

Following Section will discuss the company background, current management structure, operating model and how the suggested strategy can be implemented under the current structure.

Evaluation

Company Background:
Burberry designs, produces and sells products under the name of Burberry brand. The headquarters of the brand are located in London, United Kingdom.

The manufacturing of products is developed in both company owned facilities in the United Kingdom and through an external network of suppliers and manufacturers, predominantly located in Europe. Product modification, marketing and management are all developed internally.

The products are sold around the world through proprietary retail platforms and third-party wholesale customers. The company has a global team of over 10,000 employees, and relies on product and distribution expertise of licensing partners to develop the business. Currently Burberry products fall into following categories.
• Children
• Women
• Men
• Beauty
• Trench Coats
• Accessories
The current operating model of the company is as following:
(Strategic report, Burberry group, http://www.burberryplc.com/documents/ar-13-14/burberry-annual-report-2013-14.pdf)
The current governance system of the company is as following:

(Strategic report, Burberry group)
According to the annual report of the company, after the selection of Christopher Bailey, currently Burberrys executive board is working on servicing the stakeholders by choosing new members to bring innovation, e.g. the report states, “The Board is also in a period of evolution as it has been focused on how to build on its relevant skills and competencies for the future in accordance with its succession plan.

Good progress has been made on this during the year, with the announcement of the appointment of three new non-executive directors. Longer-serving Board members will step down as appropriate but it is important to ensure stability while new Board members settle into their roles.

The Board will continue to focus on its succession plan during the coming year” (Sir John Peace, Annual Report 2013-2014).

The current structure of the company includes management committees mainly i.e. committees that mainly analyse the financial factors of the company and work on risk management.

The new strategy suggested can be run by the existing committee as well, but in order to better adapt to the new strategy and develop the company more, there should be a committee that works with the Product modification section of the operating system, and bring modification to the products according to the changing needs of customers.

Moreover, Burberry’s major revenue comes from the existing customer base in the Asia-pacific region. The region is already providing double digit revenue but according to a report, due to changing trends, foreign exchange rates and changes in customers’ income the revenue is decreasing in the Asia-pacific region.

Burberry’s annual strategic report suggests that Burberry has faced ‘softening sales’ from Chinese customers, both at home and when travelling. According to the report “this would put “slight downward pressure” on its retail and wholesale margins as it continued to invest in “key initiatives” (Annual Report 2014) to drive long-term profit growth” (Strategic Report, Burberry group plc 2013- 2014).

As mentioned in the report company is running long-term profit driven initiatives, in that scenario, management can work on Product modification and also tapping…