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BurberryTM is a fashion house that has a British look and origin. It is top in the production of clothing and fragrance among other fashion accessories. It has particularly established itself in the production of trench coats, and the tartan pattern it adopts in most of its products has become its trademark. BurberryTM has branded stores all over the world. It however also affiliates with third-party stores to distribute its products. The company is a member of the London Stock Exchange where it consistently attains FTSE 100 Index. Recent survey by the Business weekly has placed the company at the number 98 most valuable brand all over the world.
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Over the recent years, consumers in emerging markets like China produced a 36 per cent increase in the sales of BurberryTM products at retail level. These figures were attained in the last three months of the year 2010 and have led the company to declare that result for the full year would be at the “…top end of expectation” (Barrett, 2011). This growth was seen to have been widely contributed by the sales in China in particular. China, over the period mentioned, recorded a net 30 per cent increase in its like-for-like sales for the fashion house (Barrett, 2011).
Based on this growth, the fashion house is keen to expand its chain of stores in china to increase its marketability in the country. In deed, it took control of 50 stores from their Chinese franchises in the autumn of 2010, and opened a digitally enhanced store in Beijing to help in the flagging of its products (Barrett, 2011). This ensured a total of 53 stores across China that are directly controlled by BurberryTM and the company still has plans to increase the chain to 100 stores.
The company justifies its claim in the Chinese market by stating that “there is an underlying growth in the Chinese luxury sector…” (Barrett, 2011) Stacey Cartwright, the company’s Chief Financial Officer, is however quick to point out that their main driving force was to ensure that their stores were sufficiently stocked citing that “…lean levels of inventory…” had previously caused sufficient amount of sales to be “…walking out the door” (Barrett, 2011).
The other main reason for Burberry’s interest in china is that the sales in men’s wears here were 10 per cent more than any other country or market in the world (Barrett, 2011). This, the company argues, will be of great supplemental effect on the sales of women wears in the country. All over the world, the toughest market to penetrate is that of men’s wear mainly because they are often more expensive than women’s wear. Therefore, this characteristic of the Chinese market is unique and, inevitably, companies like BurberryTM should take advantage of.
The large population in Chin and their spending power is also an attractive phenomenon to the management of BurberryTM. Angela Ahrendts, the company’s Chief Executive, observes that Chinese consumers had “…a large spending power in the world’s big luxury markets” (Felsted, 2010). This power, she insists, can be seen in the capacity of purchase that Chinese tourists to the UK have established over the years.
BurberryTM products were to the Chinese consumers (Felsted, 2010). The move into Chinese market was therefore aimed at catering for the Chinese consumer with multiple dialects. Angela however insists on the focus on the affluent male wear consumption in the country.
How BurberryTM would keep its reputation intact globally by making different products for different markets, based on China’s adoption of ‘theory Z’ that compromises the concept of durability with that of disposability
It is undeniable that there are variations in the culture and preferences between different countries. Burberry’s attempts to move into and expand in the Chinese market would in particular meet a lot of challenges. Most important of these challenges is the Chinese preference for commodities that do not last so long and are therefore quickly disposable. BurberryTM on the other hand is known for its durable trench coats and bags (China Fashion News, 2011).
The company could try to take care of this perception by strengthening digital communication with its customers in the country and the region at large. This would ensure that products are purchased by consumers who had all inflation about them and therefore made the right choice of products when purchasing. The limitation to this is that the Chinese government could get involved and try to enforce theory Z for its own economic survival, something that would cause BurberryTM to lose ground in the country (China Fashion News, 2011).
The other alternative would be to develop a wider range of products, as opposed to their current trade mark trench coats. The potential for this is very viable since resent developments especially in men’s wear have seen the production and sales of sports wears. These products are more disposable than the traditional coats and would therefore be more appealing to the advocates of theory Z. However, the company has for a long time established itself by its coats line which, even today, continues to hold its main sales. Diversifying its products is possible but to change would mean losing out on this sale of coats that have continually put the company among 100 top luxury-wears manufacturers (China Fashion News, 2011).
Therefore, to help take care of specific needs of the different cultures all over the world, the company may be forced to establish manufacturing factories in every one of these countries, alongside their store chains of franchises. These country factories could still maintain the British look that is trademark of the company but produce products that were appealing to the different cultures. In china for example, the coats and women dresses could still maintain the British outlook but the manufacturers could use materials that are less durable ad therefore more disposable. As long as this production line is restricted within the Chinese boundaries, there can be no global outcry that could damage the reputation of Burberry since the products are produced to the desires of the indigenous population.