International Business Strategy Essay Example | Topics and Well Written Essays - 1750 words

International Business Strategy - Essay Example It is a fashion house established by Thomas Burberry in 1856, which became iconic for its check pattern and its outdoor line of clothing, particularly its trench coats. Its long years of existence and ties with the British historical narrative since the 1900s, established Burberry as a heritage brand. At present, it is a holder of Royal Warrants, which is a form of recognition that the establishment provides goods to a member or members of the royal family. These variables are inherent in Burberry’s branding and figure prominently in its competitive strategies. But during the 1980s, the company has experienced poor performance and this persisted way until the latter part of the 1990s. This changed in the past decade and the company is considered to be one of the best global brands in its category and is operating with record profit. Currently, Burberry has more than 500 stores in over 50 countries. This report will explore Burberry’s strategies, which allowed it to gain competitive advantage in the luxury market and achieve successful expansion overseas. The Luxury Fashion Market: An Analysis The luxury fashion market is composed of several categories but these are mostly dominated by apparel and footwear. It can also include leather goods, accessories and jewelries. While each of these can very well be considered a separate industry, companies tend to sell them all given the fact that they do overlap, mainly because they have the same consumer demographics and consumer demand profile. The fashion luxury industry – mature industry - caters to a specific group of consumers: the wealthy. These are those who need practical (since clothing and footwear are, of course, necessities) but prestigious products; and those who are fashion conscious. This variable explains why the industry emphasizes intensive marketing and advertising campaigns. The consumer demographics and demand profile, wrote Wagle (2003), also underpins how the overall industry d emand is driven by â€Å"general economic trends, including changes in disposable personal income, consumer confidence, and consumer spending.† What this means is that in times of economic growth, the market’s demand is driven by the consumers’ need and impulse, whereas, during economic downturn, caution permeates the market. This is demonstrated in the poor performance of luxury fashion companies during the recent financial crises. The financial crunch, based on several empirical evidences, is proven to put pressure on the luxury market. The Global Economic Crisis Resource (2009, p.27), for instance, stated in one of its findings that â€Å"much activity in the luxury market has been driven by easy credit and perceived wealth† and that the crisis has significantly reduced the net worth of the rich, forcing them to cut consumption significantly. Today, the luxury fashion industry is a lucrative business due to globalization. The robust development of emer ging economies such as China, India, Russia, and other countries, has led to an expanded demand for luxury goods. In addition, it also provided the opportunity to source cheaper materials and labor abroad. The integration of the international market has facilitated these trends and companies like Chanel, Gucci, Hermes, Louis Vuitton and Burberry effectively seized the opportunity to their advantage. However, it also increased competition and changed the dynamics by which products are made and sold to consumers. Competition As previously