Burberry's Resources and Capabilities
Burberry is a British luxury brand founded by Thomas Burberry in 1856, which design, sources manufactures and distributes high quality apparel and accessories for men, women and children. Burberry “has been defined by an overt Brutishness, a trio of instantly recognizable icons (the trench coat, the trademark check, and the ‘prorsum’ knight logo), and a deft creativity that ensure its designs are timeless.” (Vollmer and Premo, 2012)
In 1998, Burberry has been described as “an outdated business with a fashion cachet of almost zero.” (Strategic Direction, 2005, P22) the product of trench coat of Burberry is a fashion …show more content…
The fabric of Burberry differs from other brand, which was weatherproof but breathable as well. (Burberry, 2002) Because of the change of fabric, Burberry’s reputation has been enhanced. Using this kind of fabric is one of benefit, but also is a weakness. Burberry purchased the fabric from a limited number of European suppliers, which means the cost of fabric is quite high and difficult to purchase. In addition, before buying initial fabric, sales forecasts have to ensure product availability and further purchase are based on the extrapolation of early orders received. (Burberry IPO prospectus, 2002) Hence, Burberry has to undertake some risk while they purchase materials.
In order to expand Burberry’s market and allocate the risk and pressures of manufacturing, Burberry granted few of licences to Japanese companies that must know specialist expertise. The way of interface between Burberry and Japanese companies is signing licences