Challenges Facing Burberry and their Solutions

Burberry Case Study Name Institutional Affiliation Date
Challenges Facing Burberry and Solutions
From the case study, there are a number of challenges facing Burberry. As illustrated in the article, most of the challenges facing Burberry are as a result of the changes taking place in the fashion industry. Digital technology has brought so many changes and some of the clothes fashion companies have embraced digital technologies such as the use of e-commerce to increase their revenue. The CEO Bailey was undecided whether they would pursue the idea of e-commerce which was a bit risky but rewarding.
Another great challenge affecting the operations of the company was the pricing of the premium goods and the luxury items. The luxury entry products were experiencing a downward trend while the premium products which were not previously considered luxury items were experiencing an upward trend. Burberry had to find a way of dealing with this emerging issue as it was affecting the pricing of their products. The segmentation of the luxury customers also greatly affected the operations of the company. The absolute segment was experiencing a growth and in most cases it included the members who wanted to be associated with a certain brand and its history. The aspirational group also came second and in most cases it involved people who wanted to be recognized by the others as people associated with luxury. The accessible segment who were mostly the middle class and the upper class were also an emerging customer segment. Burberry was looking for the best marketing strategy to reach all these customer segments and consequentially increase the sale of their products.
They were also challenged on deciding whether to focus on one of the customer segments while leaving out the other ones or to find a marketing strategy to target all the segments. Fast fashion is also a great challenge to Burberry traditional model of fashion. It has led to the emergence of brands such as Zara that respond immediately to any new fashion trend. They focused more on the customer and mixed the low-priced and high priced goods all at the same time and therefore they were able to capture save customers their money. Burberry had challenges in replicating what happened in the fashion shows. Most of the customers expected each of the items they saw on the fashion show to be replicated in the stores but Burberry had so many challenges in replicating these trends in its stores which further brought a stiff competition with the other cloth brands.
To solve the above challenges, the CEO needs to weigh and see the potential opportunities they need to pursue and focus their resources on these opportunities. In terms of the luxury customer segments, Burberry should focus on all the customer segments by produced products which will meet all the needs of all the customer segments. It is also important to adjust the pricing strategy to make sure they meet they meet the financial ability if the customer. It is also important for Burberry to focus on the new emerging markets since it is a brand which has established itself already. In new markets such as China, Burberry should focus on one particular customer segment which is the upper middle class only. As indicated in the case study, the upper middle class contributed to 74% of the luxury items in 2015 meaning there is a great opportunity CITATION Mar172 \l 1033 (Marta, 2017). Using resources in e-commerce is also a long time investment.
Even though e-commerce rewards will take long time to manifest, it can be seen as an investment into the future. The brick and mortar business models is also slowing down and focusing more on using their technological resources to innovate and come up with ideas in e-commerce. Overtime, the live fashion show can also be incorporated into the website using technology. When someone visits the website from a certain location, Burberry can inform them about a fashion week or show taking place near their location and offer customer incentives such as discounts and offers to encourage purchase. Focusing more on e-commerce would position the Burberry at a better position of beating their competitors who are emphasizing on the brick and mortar business model.
Responding to Fast Fashion
The company should also come up with an appropriate way of responding to the fast fashion situation. Since the company is already an established brand, it is important for the company to differentiate itself. Joining the fast fashion and competing with them...