This report is a focused strategic analysis of Burberry and M & S and the UK industry as a whole. The report focused on the economic environment of the two companies as a result of the ongoing Brexit politics and how withdrawal of UK from the EU could affect fashion industry. Based on an article that appeared in Yahoo News (2019) where the editor highlighted the cloud of Brexit surrounding UK fashion industry. The author highlighted the economic uncertainty facing various UK fashion industry stakeholders as Brexit discussions continue. The author also expressed concerns that a no-deal Brexit could have adverse economic effects on the industry and could even lead the industry to shrink. The Yahoo News article was essential for this study as it did not only highlight the contributions of the fashion industry but also provided an important insight into the British fashion industry and how specific firms i.e. Burberry and M & S could be impacted by Brexit.
Table of Contents
1. Executive Summary
2. Introduction
3. Analysis of Burberry and M&S’s environment
4. Analysis of the UK Fashion Industry
5. Critical analysis of the economic environment of Burberry and M&S
6. Conclusion
Research Objectives and Focus
The primary objective of this report is to conduct a strategic economic analysis of Burberry PLC and Marks & Spencer (M&S) within the context of the UK fashion industry, specifically examining the potential threats and challenges posed by the impending Brexit transition.
- Economic impact of Brexit on the UK fashion industry and retail sector.
- Strategic comparison of the business models of Burberry and M&S.
- Application of the Porter’s Five Forces model to assess competitive dynamics.
- Utilization of PESTEL analysis to identify macroeconomic opportunities and threats.
- Evaluation of operational strategies regarding talent attraction, supply chains, and market diversification.
Excerpt from the Book
Analysis of the UK Fashion Industry
Fashion retail is one of the main subsectors in the fashion industry. The industry employs 555000 people in the UK. Most of these jobs are found in the fashion retail sector with more than 410000 employed in the retail sale of clothing while more than 60000 are in the retail sale of footwear and leather goods (Fashion United, 2019). Fashion retailers in the UK can be categorised into specialized retailers that only engage in apparel, accessories, and cosmetics, such as Burberry PLC and general stores that sell fashion products alongside other goods, such as M&S. Other major fashion companies in the UK include Next PLC and ASOS, among others. The UK also hosts other popular fashion brands from foreign countries, such as USA, France, Italy, and Japan. In recent years, the nation’s main fashion retailers have shifted from home-based manufacturing units to sourcing products from foreign retailers (Godbold, 2019). This new trend is attributed to the high cost of labour and raw materials within the UK. As a result, companies like Burberry outsource their production units to nations, such as China that still offer low wages and a huge pool of talents and raw materials.
Between 2009 and 2016, the UK’s fashion industry witnessed significant growth in consumer spending on fashion apparels. Burberry’s annual sales growth was estimated to be above 15 percent. Large consumer spending locally fueled this growth. With this high growth, the fashion industry has contributed massively to the post-financial crisis growth of the UK economy. Directly, the industry is said to account for more than 1 percent of the UK GDP, which translates to around 20 billion pounds (The Times, 2015). The industry also contributed indirectly to the economy by creating new employment opportunities. Currently, the fashion industry is the fourth largest employer in the UK after travel and tourism, telecommunications and real estate (Ahmed, 2014). The fashion industry has also been one of the most competitive industries in the post-financial crisis UK. Porter’s five forces model is hereby used to help in understanding the competitiveness of this industry in the current environment amidst the Brexit debate and help in evaluating the current market potential of Burberry PLC and M&S.
Summary of Chapters
Executive Summary: Provides an overview of the strategic analysis of Burberry and M&S, highlighting how Brexit-related uncertainty threatens industry growth and talent acquisition.
Introduction: Outlines the significance of the British fashion industry and introduces Burberry and M&S as key retailers impacted by the potential economic consequences of Brexit.
Analysis of Burberry and M&S’s environment: Details the methodologies used, specifically Porter’s Five Forces and PESTEL analysis, to examine the market competitiveness and economic surroundings of the two firms.
Analysis of the UK Fashion Industry: Explores the structure, employment statistics, and growth trends of the fashion retail sector, noting a strategic shift toward outsourcing production to low-cost countries.
Critical analysis of the economic environment of Burberry and M&S: Examines the specific risks of a no-deal Brexit, such as tariffs and trade barriers, while identifying technological and market diversification opportunities.
Conclusion: Summarizes the findings, reiterating that while the industry is robust, political unpredictability remains a significant threat to long-term competitive advantage.
Keywords
Burberry, M&S, UK Fashion Industry, Brexit, Economic Analysis, Retail Sector, Porter's Five Forces, PESTEL Analysis, Trade Barriers, Supply Chain, Competitive Advantage, Innovation, Market Diversification, Recession Risk, Fashion Retail.
Frequently Asked Questions
What is the primary focus of this report?
The report provides a strategic economic analysis of Burberry PLC and Marks & Spencer, evaluating how they navigate the uncertainty of the UK's withdrawal from the EU.
What are the central themes of this research?
The central themes include the impact of Brexit politics on the fashion retail sector, supply chain challenges, labor market dynamics, and the pursuit of competitive advantage through innovation.
What is the main objective of the analysis?
The goal is to determine the potential opportunities and threats facing Burberry and M&S as they adapt their business environments to the post-Brexit economic landscape.
Which analytical frameworks are utilized in this work?
The author employs Porter’s Five Forces model to assess industry competitiveness and the PESTEL analysis framework to evaluate external macroeconomic factors.
What does the main body of the report cover?
It covers the structure of the UK fashion industry, a detailed analysis of the two companies' operational strategies, and a critical look at the economic implications of a potential no-deal Brexit.
Which keywords best characterize this study?
Key terms include Burberry, M&S, UK Fashion Industry, Brexit, Economic Analysis, PESTEL, and Competitive Advantage.
How does M&S differ from Burberry in its strategic approach?
M&S relies on diversification by offering food and home goods alongside fashion, whereas Burberry focuses on luxury, high-quality fashion products, innovation, and brand exclusivity.
What solution does the report propose for mitigating Brexit-related risks?
The report suggests that companies should look toward emerging markets such as India, China, and Vietnam to replace reliance on the EU market and leverage technological advancements to improve efficiency.
- Arbeit zitieren
- Difrine Madara (Autor:in), 2019, Burberry PLC and UK's Fashion Industry. External Analysis, München, GRIN Verlag, https://www.hausarbeiten.de/document/520215
