Employability and Consulting Skills - Assignment Example

Employability and Consulting Skills Introduction It is estimated that the British fashion industry is worth £21 billion and the direct impact of the fashion industry on the UK economy is immense (White, 2012). It is a fact that the UK fashion industry is one of the largest employer providing jobs to over a million people. It generates more than double jobs as real estate and surpasses in terms of employment provided by telecommunication, car manufacturing, and publishing business together. The industry faces varied challenges due to ongoing recession and global competition. The paper attempts to explore three companies in the fashion industry – industry leader, emerging company, and the company at risk in the ensuing paragraphs. 1. Burberry Group Plc. Burberry has positioned itself as the most pioneering fashion brand in numerous product lines such as coats, leather goods, shoes, belts, jewelry, outwear, fragrance, beauty products. The company also provides licenses allowing third parties to manufacture and distribute products under the Burberry trademarks (Burberry Group plc, 2014). External Environment Post 2008 financial crisis, the current external environment is extremely challenging. Unemployment in the UK and the other developed economies is ruling at between 8-9 percent. Global competition has intensified in last couple of years and customers have been highly demanding in the sense that mass customization at competitive rates is a need of time. Overall, investments in Europe and the UK are not picking up restricting demand of the products. Moreover, Burberry has to compete with several established global brands such as Polo, Gucci, Armani, Coach and many others in fashion segment (Jacobson, 2012). Positioning and Customer Base Burberry competes with many fashion brands such as Polo, Gucci, Armani, Coach. The company competes with Polo in clothing business. Burberry has captured the upper-end market in comparison to Polo. Coach and Gucci are more focused on accessories while Armani and Polo target more on Apparel market; however, Burberry has been able to penetrate in both apparel and accessory market of the luxury goods. It can be said that Burberrys positioning is extremely competitive among other fashion brand products. The company offers products in line with the market trends meeting the needs of men and women both. Its products are targeted to different segments of the population successfully (Jacobson, 2012). Financial Performance Some of the essential financials of Burberry can be summarised as per the following. Financials 12 months period, Year ending 31 March 2013 Revenue in GBP 2.15B Gross Profit in GBP 1.44B Profit Margin % 13.13 Return on Assets % 15.7 Operating Margin% 19.93 Source: http://in.finance.yahoo.com/q/ks?s=BRBY.L From the above table, it is quite clear that Burberry continues to perform strongly even during the recessionary market condition. 2. Mulberry Profile Mulberry is in the business of leather goods. The company is known as a British lifestyle brand catering to the needs of fashion-conscious men and women. Its Somerset factory manufactures designer leather goods. The company outsources small leather products from China. The company wants itself to transform from wallet and briefcase making to fashion goods powerhouse. The company is listed in the London stock exchange. External Environment Mulberry faces major challenge by the established global players in the up market segment. Mulberry is attempting to reposition itself in the high-end of the luxury market where major threat comes from Moncler, Brunello Cucinelli, Ferragamo brands apart from giant Burberry (Robinson et al, 2014). Positioning and Customer Base Robinson et al. (2014) argue that the company is in trouble as it decides to move the company brand up market. The company does not get enough buyers for its products at higher prices. Mulberry was able to sell its bags promptly when they were priced €800; however, currently, at €2,000 buyers do not want to patronize. Financial Performance Its sales plummeted by 7 percent as per the results declared for the recent quarter and the company share prices tumbled to a four-year low. The brand equity has not moved upwards in line with higher prices. So far, Mulberry has been at the affordable end of the luxury market and this migration to high-end is creating trouble for the company. Its sales in South Korea is not picking up as expected (Robinson et al., 2014). Above graph depicts how the company shares are going downhill from £25 in the first half of 2012 to only 654p just a week before (Robinson et al, 2014). Financials 12 months period, Year ending 31 March 2013 Revenue £ 165.1 million Operating Profit £ 25.5 million Return on Assets % 13.68 EBITDA Margin % 17.63 Source: http://investing.businessweek.com/research/stocks/financials/ratios.asp?ticker=MUY:GR The company’s revenue has gone down by 3.45% when compared with the year ending 31 March 2012 and EBITDA (earnings before interest, tax, depreciation and amortization) has decreased by huge 15.5%. 3. Brunello Cucinelli SpA Profile Brunello Cucinelli is an Italy-based high-fashion clothing business company that sells jackets, coats, leather clothing items, dresses, suits, shirts, trousers for men and women. The company is relatively a new entrant in the sense that the company got listed in 2012 on the stock exchange with an aim to expand in all its product range. The company provides its products to the customers through own and franchisee stores spread across the Europe (Reuters, 2014). External Environment Brunello Cucinelli, as an emerging company, faces significant threats in the fashion-segment where the company has been trying to carve a suitable niche for itself among numerous established players. Due to ongoing recession, especially when the market is not growing, it is a challenging task for any company to lure customers and Brunello Cucinelli, so far, has been able to manage its businesses successfully as is evident from its financials. Positioning and Customer Base Currently, the companys 32.2% revenue comes from Europe with North American market contributing 31.7%. The company has also entered into Russian and the East European market. China contributes 3.7% in total revenue of the company. That simply means that the companys acceptability among consumers for its products has been increasing (Press Release Brunello Cucinelli S.p.A , 2013). Financial Performance Brunello Cucinelli SpAs revenues grew by 15.57% from 243.45 million to 281.35 million. Cash reserves of the company also increased by 361.19%. The company also forecasts double-digit growth in 2014 (Reuters, 2014). On year to year basis, the company’s revenues grew by 15.57% from euro 243.45 million in 2011 to euro 281.35 million in 2012. Financials 12 months period, year ending 31 December 2012 Revenue in Euro 281 million Operating Profit in Euro Euro 36 million EBITDA Margin % 12.81 Source:http://markets.ft.com/research/Markets/Tearsheets/Financials?s=BC:MIL&subview=IncomeStatement Conclusion From this three-company analysis, it can be construed that Burberry Group Plc. is leading amongst all for its wide-ranging fashion products and greater consumer acceptability. Mulberry is at risk for its changed positioning in the high-end fashion market as is evident from the decreased sales of the company. Brunello Cucinelli falls in between these two companies as an emerging company as it is expanding rapidly in the unchartered markets. References Burberry Group plc. (2014). Key Statistics. [Online] Accessed 5 February 2014 http://in.finance.yahoo.com/q/ks?s=BRBY.L The Guardian (2010). British fashion industry now worth nearly £21bn a year, report reveals. [Online] Accessed 5 February 2014 Jacobson, L. (2012). Burberry Case Study. [Online] Accessed 5 February 2014 Press Release Brunello Cucinelli S.p.A. (2013). Brunello Cucinelli. Reuters (2014). Brunello Cucinelli SpA . [Online] Accessed 5 February 2014 Robinson, D., Daneshkhu, S., Sharman, A. (2014). Mulberry hits snag in move to take brand upmarket. [Online] Accessed 5 February 2014 White, B. (2012). Fashion brands top most wanted jobs list for British students. [Online] Accessed 5 February 2014 Read More