Business Agility and Luxury Companies Defense – Master Thesis May 20, 2014 Advisor: DEBANE Franck; Student: KOLLER Hannah
May 27, 2015
Business Agility and Luxury Companies Defense – Master Thesis
May 20, 2014Advisor: DEBANE Franck; Student: KOLLER Hannah
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Agenda
I. Introduction
II. Presentation of business agility concepts
III. Driving forces in the luxury market
IV. Agility providers in the case of Burberry
V. Constraints and opportunities
VI. Conclusion
“Too much time can only teach you what can go wrong, not what could be
transformative.”- Mark Gerson, American entrepreneur -
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
I. Introduction: The idea behind the thesis
Business Agility
- responsiveness,
competency, speed, flexibility, innovativeness -
Luxury Markets- symbolism,
high price and quality
standards, aesthetic
attributes, rarity, extraordinary
touch -
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Hypothesis: Luxury companies need and apply agility concepts.
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
II. Business Agility
How to predict the future?
1. Projection
2. Proactivity
3. Reactivity
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
90% of companies regard business agility as key success factor
PastPresent
Future
PastPresent
Future
PastPresent
Future
Strategic Plan
Modification of the strategic plan
Scenarios
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Measurable advantages regarding revenue growth, employee loyalty and decision-making effectiveness
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Strategic agility anchored in the business model
Resource Fluidity
Strategic Sensitivity
Leadership Unity
Doz and Kosonen (2008)
“Business agility =equal exploitation of
the three concept dimensions”
“Business agility =speed, with which the build-measure-learn
loop can be performed”
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Operational agility preserves anentrepreneurial spirit
Ries (2011)
III. Luxury Market
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Huge micro-economic potential due to digital revolution and increasing customer heterogeneity
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Luxury Market
212 billion - 2012 -
Current Market
Risk Level
Market Potential
- High fixed costs- Sensitive customers - Exchange rate volatility- Counterfeit
- Consolidated landscape- Niche designer emergence- Little room for differentiation- Luxflation
- Country to city focus- Digital revolution- Homo- to
heterogeneity
Luxury Markets are also not immune against macro-economic influences
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Luxury Market
212 billion - 2012 -
Current Market
Risk Level
Market Potential
China‘s triple-tax system
- political -
Product and trademark
piracy- economic -
Thrill-seeking society- social -
Mobile revolution
- technological -
Green movement
- ethical -
Customer health
regulations- legal -
IV. Burberry Case
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Burberry as global, traditional and publicly listed luxury company(Business Model Canvas)
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Key Partners- Suppliers
- Production site managers
- Wholesale partners
- Models & Fashion show
managers
Key Activities - Designing
- Supply chain improvement- Transparency
creation
Key Resources- Designer
- Unique material- Physical store
presence
Value PropositionQualitative:- Exclusivity
- Brand & Status- Design
Customer Relationships
Personal assistance
ChannelsOwn retail network
Customer Segments
Niche market:- Millennials
Cost StructureValue-driven:- High margin
- High fixed costs (own retail stores)- No economies of scale
- Little economies of scope (own production site)
Revenue StreamsAsset Sale:
- Europe (44%)- Americas (27%)
- Asia Pacific (24%)
Burberry’s turn-around in order to catch up on strong industry growth
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
2nd in „Top Most Innovative Companies in Retail 2013“ ranking
Strategic agility as turnaround enabler and future business framework
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
- Strong relationship between Bailey and Ahrendts
- Top team nomination- Continuous internal communication of
vision
Resource Fluidity
Strategic Sensitivity
Leadership Unity
- Spread of a liberal mindset- Increased customer proximity- Embracing all hierarchy levels
- Buy-back of licenses- Roll-out of a company-wide SAP system- New supplier acquisition
Little product-related agility due to business nature, but…
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Seasonal products
1919 1930 1946 1974 2005 2013
DesignPresentation
at Runway Shows
Collection Order Production Distribution
Customer Feedback
Unique products
… strong service-related agility.
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Service-related
The Art of Trench
+1st Runway Livestream
Burberry Acoustic
+Click & Buy Livestream
Bespoke Service
Burberry World Live
Customer 360
2009
20102011
20122013
Build Involve Measure
V. Constraints and Opportunities
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Constraints don’t keep luxury companies from enjoying agility advantages
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Constraints Opportunities
Customer proximity and engagement (BI)
Customer service
Streamlined retail operations
Company-internal, worldwide connectivity
Nature of business
Consolidated market
Scepticism towards IT returns
Vertical integration trend
VI. Conclusion:Companies never know what the future will bring!
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Thesis:Luxury
companies need and
apply agility concepts
Product-related agility
Strategic agility
Service-related
Strategic
Operational
Thank you for your attention.
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
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Appendix
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Creation of the
questionnaire (December
2013)
Networking at the EDHEC Forum in
Paris (January 2014)
Email with embedded
questionnaire (January
2014)
Follow-up call (January/ February
2014)
Increased search via personal and thesis advisor‘s
contacts, EDHEC Alumni platform
(January/ February 2014)
First email contact (without
questionnaire) (February through
April 2014)
Telephone interviews
(15-30 min)(February through
April 2014)
Primary literature – research method
1. Phase
2. Phase