EDHEC Master Thesis presentation from Hannah Koller

1. Business Agility and Luxury
Companies
Defense – Master Thesis
May 20, 2014
Advisor: DEBANE Franck; Student: KOLLER Hannah

2. 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

3. “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, innovativen
ess -
Luxury Markets
- symbolism, high price and
quality standards, aesthetic
attributes, rarity, extraordinar
y touch -
?
Hypothesis: Luxury companies need and apply
agility concepts.

4. I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
II. Business Agility

5. How to predict the future?
1. Projection
1. Proactivity
1. 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
Past
Present
Future
Past
Present
Future
Past
Present
Future
Strategic Plan
Modification of
the strategic plan
Scenarios

6. 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

7. 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”

8. “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 an
entrepreneurial spirit
Ries (2011)

9. III. Luxury Market
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion

10. 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

11. 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
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 -

12. IV. Burberry Case
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion

13. 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 Proposition
Qualitative:
- Exclusivity
- Brand & Status
- Design
Customer
Relationships
Personal
assistance
Channels
Own retail
network
Customer
Segments
Niche market:
- Millennials
Cost Structure
Value-driven:
- High margin
- High fixed costs (own retail stores)
- No economies of scale
- Little economies of scope (own production site)
Revenue Streams
Asset Sale:
- Europe (44%)
- Americas (27%)
- Asia Pacific (24%)

14. 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

15. 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

16. 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
Design
Presentation
at Runway
Shows
Collection
Order
Production Distribution
Customer Feedback
Unique products

17. … strong service-related agility.
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
Service-related
2009
2010
2011
2012
2013
Build Involve Measure

18. V. Constraints and Opportunities
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion

19. 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

20. 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

21. Thank you for your attention.
I. Introduction II. Business Agility III. Luxury Market IV. Burberry Case V. Constraints and Opportunities VI. Conclusion
?

22. 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