Porter’s Five Forces Analysis of Burberry 

Burberry Group PLC is a retail chain luxury fashion house and multinational brand. Thomas Burberry started the company in 1856. Today, we’ll discuss Porter’s five forces analysis of Burberry; bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.

Porter’s five forces analysis of Burberry would analyze the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management. Here’s Burberry Porter’s five forces analysis of luxury fashion and retail clothing business as follows;

Porter’s Five Forces Analysis of Burberry

Let’s discuss Porter’s five forces analysis of Burberry as competitive forces in strategic management and they’re as follows;

Bargaining Power of Suppliers in Burberry

The bargaining of suppliers is lower in the luxury fashion and retail clothing business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in Burberry Porter’s 5 forces analysis of luxury fashion and retail clothing business are as follows;

I-Low Cost Material

The raw materials and supplies for the production of clothes are readily available in various regions and countries worldwide at a low cost. In fact, there are various outsourcing companies in China, India, and other developing countries that are willing to manufacture clothes based on your requirements and demands. Manufacturing companies have the option of switching from one supplier to another without incurring any cost. Easily availability of low-cost supplies, low switching cost, and outsourcing alternatives decrease the bargaining power of suppliers to a great extent.

Bargaining Power of Buyers in Burberry

The bargaining of Buyers is moderate in the luxury fashion and retail clothing business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in Burberry Porter’s 5 forces analysis of the luxury fashion and retail clothing business are as follows;

I-Premium and Exclusive

Burberry has maintained a premium and exclusive luxury brand image. The company’s target customers are brand and status-conscious and they want limited edition and exclusive clothing and other fashion items. However the customers have multiple options of luxury brands, and they all offer some type of unique value in their exclusive and premium fashion products. It gives them significant bargaining power because they want to try out something unique and different every time they go out shopping.

II-Newly Wealthy People

The newly wealthy people won’t go to Burberry for shopping. It is because they have recently acquired wealth, and they previously had the taste of following new trends, latest designs, and styles. Exclusive offers, limited editions, attention to detail, and classic designs won’t attract their attention.

Threat of New Entrants in Burberry

The threat of new entrants is low in the luxury fashion and retail clothing business as competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in the Burberry 5 forces analysis of luxury fashion and retail clothing business are as follows;

I-Aristocrat Customer

Burberry came to rise by offering waterproof coats to wealthy aristocrat families in England in the 19th century. Waterproof coats allowed the company to differentiate itself from its competitors; it helped the company to make a name for itself with a series of unique and differentiated products. Nowadays, it is nearly impossible for an individual to establish a luxury premium brand with no influence and experience in the fashion industry.

II-High Capital Investment

While launching a new retail fashion brand, then it requires high capital investment. They need a vast network of suppliers, access to quality supplies, distribution partners, production and manufacturing plants, and various other running expenses. Collectively, they made it highly difficult for new entrepreneurs to enter the field.

Threat of Substitutes to Burberry

The threat of substitute products and brands is moderate to higher in the luxury fashion and retail clothing business as competitive forces in strategic management. Some of the main factors impacting the threat of new substitutes in the Burberry five forces analysis of Burberry are as follows;

I-Multiple Brand & Product Options

Burberry has lost the status of exclusiveness because there are multiple retail luxury and premium fashion brands. They all offer exclusive fashion clothes with unique product value, and they give a lot of premium luxury product options to the customers. All of these factors amplify the threat of substitution rate; because the customers would only prefer the Burberry luxury items out of brand loyalty or experiencing something unique and different.

Competitive Rivalry in Burberry

The competitive rivalry among brands is very high in the luxury fashion and retail clothing business as competitive forces in strategic management. Some of the main factors impacting competitive rivalry in Burberry Porter’s five forces analysis of the luxury fashion and clothing industry are as follows;

I-Tough Competition

The premium luxury fashion market has become highly competitive without Louis Vuitton, Gucci, Prada, and other brands. It has become highly difficult for Burberry to differentiate itself from the competitors, and attract the attention of customers with unique and exclusive offers.

Conclusion: Burberry Porter’s Five Forces Analysis |5 Forces Analysis of Burberry

After an in-depth study of Porter’s five forces analysis of Burberry; we have realized that Burberry is the world’s leading premium luxury retail fashion brand. If you are learning about the Burberry five forces analysis of luxury fashion and retail clothing business; then you should keep in mind the abovementioned bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.