Yuta Kato

University of Keio

27 March 2017

International Leaders Program

Global Products and Service and Cross Cultural Communication Management

Essay Question
Students are expected to address all the questions in their essay. They should function as a guideline
comprising various parts of their essay.

What type of problems did Burberry face? How were the problems obvious to Angels when she
first had a meeting with staff? What was the problem with the store in Bond Street? etc.

What is common about global brands?

What do you think about made in the USA Burberry products? What do you think? Is this issue
also applicable to all luxury brands? If not, why?

Management and organization structure. How did she change them? Why? Do you agree?

Outwear and Burberry. Discuss.

Competitor benchmarking or competitive advantage? Do you agree?

I. Introduction
Why do most companies go international today? Generally speaking, companies seek marketing
to leverage core competencies, seek low cost labors, and learn efficiently knowhow and obtain
information. In the future, companies will go become more and more international more and more.
By contrastHowever, going international has several risks. Therefore it is difficult and companies
need profound tactics. Burberry is an example that how it would adapt to global markets by several
strategies.
 In order to develop a company, the CEO, Angela Ahrendts should take three strategies. First, the
CEO should clarify the target of customer by considering the 4Ps method. Second, she emphasized
Burberrys brand to get trust from customers. Third, the company ought to compare itself with other
rival companies. These are the best strategy strategies to fight compete in global marketing.

II. The reformation of Burberry made by Angela Ahrendts

First strategy, a president of a company should indicate, Who is the target of our company?
"How much do we sell our products to customers?", "What are our main products? and How do we
promote our products? and so on. This The 4Ps is the initial ofstand for Price, Product, Place and
Promotion
strategies and it is very fundamental, but it is the most important strategy in marketing. These
factors decided the power of brand. It strongly affects with global marketing.
For example, according to the article (Harvard Business Review, January 2013) written by
Angela Ahrendts, who has been the CEO of Burberry since 2006, in those days, Burberry has
already been known as a traditional luxury clothing company. However, when she inaugurated the
CEO, Burberry faced a crucial problem. The Main main problem is was that the growing rate of
global market was only 2%. She was investigated the cause of not expanding. This problem was
caused by ubiquity, which kills value of Burberry brand. Second, even top managers did not
understand value of Burberry brand. When she met them in the first meeting, none of them wore
Burberrys coat in spite of they could buy trench coats in discounted price. Third, the highest
remarkable store in Bond Street sold many kinds of goods such as dogs cover. She thought her
company ignored the most basic 4Ps. She changed some.
First of all, Angela Ahrendts directed that Christopher, who is a competent designer,
manufactured all Burberrys products in only U.K. He administrated all designs. When she was
introduced the Hong Kong designer team, she noticed that Hong Kong designer team did not
produce the Burberrys famous single coat. Furthermore, when she was also introduced the U.S.A
designer team, she was surprised at a fact that classic Burberrys raincoat was made in notnot in
U.K but in U.S.A. Designer teams were all over the world and they were different from each other.
It loses Burberrys reputation of luxury brand. This was keeping from expanding international
market. Therefore, she centralized Christopher and the Hong Kong and U.S.A designer team went
to U.K to produce not Hong Kong and U.S.A but in U.S.A since her decision.
In addition, she decided that Burberry should more concentrate more on a single product.
Burberry was recognized the symbol of luxury brand, but its traditional trench coats were sold only
20%. Moreover, she would be more proud of clothing materials whose had natures are waterproof
and great fabric. Thus, she and top managers made their mind to emphasizing trench coats.
 Third, she casted doubt on a traditional corporate structure and also she thought to change it.
Burberry had been dividing mens category with womens category therefore she eliminated this
category to focus on the power of brand for all employees. Moreover she made a number of
departments who waswhich consisted of experts. These new changes made Burberry more
advancing.
Next, she focused on the target of customer who wanted to buy expensive coats. For example,
clerks of each store strongly suggested trench coat instead of polo to impress Burberry as a
luxurious clothing shop. Each store installed videos and iPads to promote why Burberrys trench
coats were superior to others by audiovisual effects. This is the strategy how to impress Burberry as
a luxurious maker.
As a result of these reforming by Angela Ahrendts, the operating income in 2012 would be more
than twice than that in 2006. In addition, outerwear occupied half of selling of clothing. This facts
showed that The Burberrys traditional trench coats was recognized as one of the most famous
luxurious coats all over the world. This is the example of success to go international.

III. Burberrys Trench Coats Made in U.S.A

I strongly dis agree with the idea that Burberrys trench coats was produced in U.S.A for the
following reasons. First of all, Picture 1 (Dyachuk, O. July, 2012) says that a strong point of
Burberry is Britishness therefore if Burberrys products had been made in U.S.A, it eliminated
Burberrys strongpoints. Angela Ahrendtss decision was essential for reconstructing Burberry to
keep image of a brand. Most customers expected that Burberrys trench coats were made in British.
Second, Yorkshire was famous as high quality wool. Consequently, trench coats, which were made
in Yorkshire were very good images. As these reasons I agree with the strategy of Angela Ahrendts.
On the other hand, other luxury companies such as Prada, Gucci and Louis Vuitton produce their
clothing in U.S.A is not good idea because U.S.As fashion style is casual style. U.S.A is a symbol
of casual fashion. For example, many people come up with Gap, Abercrombie and Fitch, which
made hoodies. Therefore if the companies want to have image of formal jacket, I suggest that it
made in Italy, England, and France. Luxury coats made in U.S.A is not suitable.

IV. The Power of Global Brand

Starbucks coffee, Apple, MacDonald, Google and Burberry have the strong brand that every one
knows their logos all over the countries by 4Ps strategy. For example, according to Mr. Iwasaki and
Mr. Takayama (Iwasaki, O. and Takayama, November 2008) Apple, they invented iPod. Product: it
is the newest function, which users can use by fingers. Place: Apple sells at Apple shops, which sell
only its products. Price: iPhones are sold same price everywhere. Apple won trust and cool image
from customer by these tactics. In the same way, Burberry adopted this strategy. Product:
Burberrys trench coats were made in British. Place: Burberry placed luxury district there are a lot
of famous shop such as duty free in the airport or Ginza in Japan. Price: Burberrys product is very
expensive because its target of consumers is the rich. Promotion: Picture 2 (Dyachuk, O. July, 2012)
says Burberry promote by SNS tools more than other makers to give image of smart and innovating.
Thanks to the power of brand given by 4Ps strategies, the just Burberry logo values hundreds of
dollars because everyone think that it is the token of the rich.

V. Competitor Benchmarking or Competitive Advantage

Competitive advantage is very important in marketing. Market Views (Meer, N. September 2010)
says, To a large extent, the ambition of business strategy is to reach a sustainable competitive
advantage. If this company has the competitive advantage, many stakeholders invest more money
and this company get developing by money given by stockholders.
In my opinion, workers need to analyze both their company and other rival companies.
According to Picture 1, Barberry compares rival companies such as Prada, Louis Vuitton and Gucci;
we found that Burberrys unique feature is Britishness therefore producing in Yorkshire is inevitable
furthermore that is the identity of Burberry. The CEO can know identity of his product by
comparing other rival companies. It is the advantage to sell.

VI. Conclusion
In summary, Angela Ahrendts aggressively changed to revive the power of Burberrys traditional
brand. One effective strategy is 4Ps, which are Price, Product, Place and Promotion. Moreover,
comparing other rival companies because stakeholders judged which company they should invest
by evaluating competitive advantage. We are also affected by the power of logo when we buy
something. Thus we should apply these strategies in going international.
VII. Pictures
Picture 1
 Picture 2

VIII. References
Ahrentds, A. (2009). How I Did ItBurberrys CEO on Turning An Aging
British Icon into a Global Luxury Brand. Harvard Business Review, pp.39-
43
Dyachuk, O. (2012). PRADA Marketing Strategy. [Online] Available at:
https://www.slideshare.net/olgadyachuk/prada-marketing-strategy/9-
Brands_PODs_Visual_IdentityArchitecture_6 [Accessed 27 Mar. 2017]
Iwasaki, O. and Takayama, Y. (2008). Apples Marketing Strategy. [Online] Available at:
http://www.ssm-gcbm.com/seminar/pdf/apple-5.pdf [Accessed 27 Mar. 2017]
Meer, N. (2010). The Importance of Competitive Advantage. [Online] Available at:
http://www.sharenet.co.za/marketviews/article/The_Importance_of_Competitive_Advantage/
1650 [Accessed 27 Mar. 2017]