Burberry Group plc is a luxury fashion house in Britain. It is headquartered in London, UK. The company mainly focus on the fashion house and distributes the trench coats, fashion accessories, ready-to-wear outfits, cosmetics, sunglasses and fragrances. Burberry was founded in 1856 by Thomas Burberry, with the objective of providing outdoor attires. The company is famous for its one kind of fabric known as Gabardine, which is waterproof and breathable (Burberry, 2020).
VRIO model is an analytical tool used by the companies for evaluating its resources and capabilities. This helps them in availing more opportunities and mitigating the threats they are facing. There are four components in the model, Value, Rarity, Imitability and organization. Here is the detailed VRIO analysis of Burberry.
Value
The first and most important component of the VRIO analysis is the value of the resources. Companies should adopt valuable resources for gaining the competitive advantage, as it will help in implementation of the resources effectively and efficiently. Burberry adds value int the company by exploiting the technological opportunities with the e-commerce and in-store installations. It also introduced 3D holographic shows that allows the consumers to shop easily. The trench coats are famous and valuable for the company as they were used in the World war 1.
This provides the strong image as it is associated with the history. Its trench coats are considered as the valuable resource because of its classic and unique styles (KA, 2013).
Rarity
This is the second most important component of the VRIO model, as rarer the resources will be, there will be more chances for the company to achieve the competitive advantage. If the resources will not be rare or easy to be accessible, more competitors will use it for their own benefits and exploit the opportunities. Burberry was the first one to introduce specific fabric called Gabardine, which is waterproof and breathable.
The signature pattern of Burberry is also very rare, and no competitor can have it due to the copy right and patent policy. Burberry is one of a successful company in making its quality unique, classic, simple, and rare (Strangmueller, 2015).
Imitability
It is necessary for the company to have rare and valuable resources, but difficult to imitate the resources are equally important in order to gain the competitive advantage for long term. the resources of the company need to be costly and difficult to get the substitute for, so that competitors will think twice before imitating it. Burberry has successfully associated itself with the history of the world, where its trench coats were used. This provide the assistance to the company in building a strong brand image, which is now difficult for other to imitate.
Burberry also introduced children collection, which got imitated by competitors, but mainly the adult collection never got imitated. However, company is still facing the treats from the companies who make fake products or replicate all the designs (KA, 2013).
Organization
This is the last component of the VRIO analysis. The resources and capabilities cannot bring any advantage in the company if they are not organized and managed properly. The focal company always require the resources to be managed and organized effectively. Burberry instituted the consistent and centralized design for its collection.
It concentrated the production of trench coats at Castleford factory in England and contributes to the UK economy by providing over 1000 of jobs. Bringing back the production to England has solidified the company’s organizational structure which encapsulated its British identity (Faryal, 2020).
Conclusion
Burberry is one of a famous name in the fashion industry, which associated itself with the British heritage and have unique and classic design along with the history. The company has its unique style, and pattern which is famous across the globe. Burberry can achieve the competitive advantage with the help of all the component of VRIO analysis.
| V | R | I | O | ||
| Supply Chain | ✓ | ✓ | Competitive Parity | ||
| Inventory management | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Brand Equity | ✓ | ✓ | ✓ | ✓ | Sustainable competitive advantage |
| Marketing | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Product quality | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Product range | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Talented HR | ✓ | ✓ | ✓ | Competitive parity |
References
- Burberry, 2020. About Burberry Group plc. [Online], Available at: https://www.burberryplc.com/en/index.html, [Accessed on: 25th March, 2020].
- Faryal, 2020. Burberry VRIO help. [Online], Available at: https://www.scribd.com/document/436142060/Burberry-VRIO-Help, [Accessed on: 25th March, 2020].
- KA, 2013. Strategic Management Burberry. [Online], Available at: https://prezi.com/smorftxl87o0/strategic-management-burberry/, [Accessed on: 25th March, 2020].
- Strangmueller, M, 2017. Economic Strategies. Potential Improvements of Burberry. [Online], Available at: https://www.grin.com/document/417203, [Accessed on: 25th March, 2020].