Essay on Burberry Might Be Overlooking Russia

1528 Words Nov 26th, 2010 7 Pages
TABLE OF CONTENTS

CONTENT PAG.
1. INTRODUCTION 3
2. SWOT ANALYSIS 4-6
2a. STRENGTHS 4
2b. WEAKNESSES 4
2c. OPPORTUNITIES 5
2d. THREATS 6
3. CONCLUSION 7
4. REFERENCE 8-9

* 1. INTRODUCTION
Burberry has had amazing growth in the luxury sector with increases in revenues of more than 17% in the first six months to September 2010 (Burberry Group PLC, 2010). These results were the consequence of pointing their efforts and energy in the right direction, with strategies such as “leveraging the Franchise”. As part of this strategy and to optimize their presence in the Asian Markets, Burberry has decided to enter into China as an emerging market. However, this SWOT
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(Burberry Group PLC, 2010).
2b. WEAKNESSES: * Burberry only has presence in 4 cities (Moscow, St. Petersburg, Rostov On Don and Ekaterinburg), with 7 stores in total in Russia. (Fashion Traveller, 2010). * The stores in Russia are in conjuction with local franchisees (Burberry Group PLC, 2008), this is a risk for Burberry because they don’t have control over the stores and the image of the company could suffer. * Russia could join NATO. (Euronews, 2010). Given Russia’s addiction to military prowess, its position in NATO is always debated. The UK’s inclusion in NATO would benefit business channels but with the ‘East / West’ struggle and Russia not included it could more likely damage trade lines between the UK and Russia. * 2c. OPPORTUNITIES: * An important volume of Burberry sales come from costumers that buy their products overseas like end users from: Middle East, Russia, Japan and China. (Burberry Group PLC, 2010). * Russia is the one of the world’s emerging markets, it belongs to the BRIC countries (Bloomberg, 2010). For example the Swatch group said, ‘We have seen growth in all our markets. China continues to grow, of course, but Russia also grew strongly and steadily over the past years…,’ Hayek (Nayla Hayed , Chairman of Swatch Group) said. (cited by Reuters, 2010).

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