1. Introduction

The present essay seeks to explain the innovation theories that govern the organisations’ functions and help them evolve and perform better than their competitors. The report will begin with a thorough explanation of one of the innovation theories, the disruptive innovation theory. The theory’s explanation will lead to their application to an organisation, which will be Burberry, the famous British luxury brand for the present essay. The essay will explain how chosen theories apply to Burberry’s various products, including fashion accessories, trench coats, and leather goods. In the end, the selected ideas will be used to recommend future development pathways for Burberry products. 

1.1 Overview of the organisation 

Burberry is a famous UK luxury fashion house located in London, England. The latest statistics issued by Statista (2021) showed the brand valuable luxury global brand and placed Burberry as the ninth most international brand with a value of around 3.9 billion US dollars. With the successful execution of its transformation and the establishment of a strong foundation, Burberry is seeking to leverage its unique products to offer sustainable, high-quality development while contributing to the world’s wellness (Burberry, 2022). The firm enablers guiding its effective practices include the agile supply chain, collaborated and client-focused technology, secure operational efficiency, and a talented workforce (Burberry, 2022). The company works on four core values, openness and care, creativity, promoting British heritage, and thinking forward (Burberry, 2022). Its commitment to sustainability is enduring, grounded in the assumption that for future development, the company actively needs to address the challenges faced by the luxury and fashion industries. Thus, the company is dedicated to reducing the environmental footprints and enhancing social development. Recognising the essence of collaborative work to drive real change in society, they work with peer companies and NGOs to meet their objectives. Its Environmental, Social, and Governance (ESG) activities correspond with the Paris Climate Agreement and United Nations sustainable development goals (SDGs). The SDGs include no poverty, no hunger, good health and wellbeing, gender equality, clean water and sanitation, reducing inequalities, and climate actions (Burberry, 2022). With its goals, the company sells its various luxury products, such as leather goods, luxury clothing, fragrance, accessories, beauty products, and trench coats, with the finest designs and craftmanship using innovative technologies. The company strictly follows its British identity, delivering true blue English style to its customers through smart and tidy arrangements with checked prints having a well-recognised brand identity. Moreover, its trademark guarantees consumers the consistent quality and durability of its delivered products (Brand Burberry, 2022). The present essay will highlight its innovation and how evidence-based theories can inform its development. 

• Theoretical Explanation

Digital technology is critical for a business to achieve its sustainability goals in the present era to gain its pervasive impact for enabling the transformation of companies (Nylen and Holmstrom, 2015). The use of technology allows for innovative products, processes, services, and business models with its new contributions, including client-led, digital, open, and employee-led digitalisation (Bogers et al., 2017). Delivering sustainable operation is the core company’s objective, which involves incorporating environmental, economic, and social values into business (Schoenmaker and Schramade, 2019). The present essay will discuss one of the famous innovation theories, Disruptive Innovation Theory, to explain Burberry’s innovation of its Trench coats. The trench coats of Burberry are world-famous and are recognised as iconic products as they are associated with Genuine British Heritage and its distinctive presence in the luxury arena. 

2.1 Disruptive Innovative Theory 

The disruption innovation refers to a new entrant into the markets that ultimately disrupt the dominance of the incumbent. But sometimes, incumbent organisations themselves proactively recognise and manipulate prospective disruptive tools to reinforce and improve their authority (Ho, 2021). Therefore, it becomes challenging for the organisation’s administration to detect and respond efficiently to disruptive technologies. Concerning the innovation framework, disruptive innovation is widely implemented in businesses (Meissner et al., 2017). The companies calling for more transformative innovation policies regard disruption as part of a wider transition element (van der Loos et al., 2020). The theory implies that the companies must renew their competencies and skills to survive in the dynamic world.

Similarly, sustainability transformation requires new resources, knowledge, and skills as they have the potential to disrupt the overriding system configuration. However, research has little explanation regarding the role of disruption in the transition process, particularly it’s meaning beyond technological disruption. Tait and Wield (2019) presented that disruption of innovation and the place of the interruption concerning the existing value chain can be predicted as appropriate with innovation domination.

Additionally, in the context of transformation, the meaning of the disruption and identification of its different system dimensions that can be altered are significantly based on the perspective of transition authority. Understanding this transformation based on disruption innovation can broaden the understanding of disruption for innovative policymaking (Kivimaa et al., 2021). Some types of the invention can interrupt the present industries differently to challenge the incumbents for creating sustainable responses. The included or natural disruption in the market and infiltration into industry results in a complete process rather than just becoming an event (Christensen et al., 2016). However, the process is not single and unified, and incremental practice enhancement can facilitate potential lower-end disruption innovation that competes with the mainstream industry performance measures (Gobble, 2015). These lower-end penetrations implicitly highlight the reduced product price, which is not associated with the cost but has a crucial role in facilitating innovative destruction (Bloch and Metcalfe, 2018). The consumer’s acquiring price also has a critical position in the distribution process of disruptive improvement. In reality, the cost and performance must be accounted for collectively as a unifying element in the process (Funk, 2018). Tough lower-end creation might result in decreased cost about advantages to an executive product; most literature focuses on the high-end innovation that enters not market with the aim of improved performance over the existing products. However, it is worth noting that both types of creation will be different diffusion processes. The incumbent companies most fail due to their inability to effectively respond to the new products (Christensen, 1997). The lower-end innovation is characterised by enhanced simplicity and mediocre technological performance. Thus, disruptive innovation enables the corresponding products to penetrate the mainstream market. But, diffusion of innovation theory presents that relative advantage is also one innovation characteristic that improves market adoption. In most research on innovative distribution, innovation with higher levels of performance, also known as high-end innovation, is the core factor that drives the adoption intention of customers (Pham and Ho, 2015). 

Backstrom and Lindberg (2018) stated that disruption could also reduce the value of present industrial resources and competencies. Moreover, Matschoss and Heiskanen (2018) presented that it builds the pressure on the firms to recreate their incumbent business models. Christensen’s initial disruption theory was created in the context of technological advances and innovations, but the latter approach became broader in scope to include the business innovation models and products. Christensen et al., (2015) explained the inclusion in theory by studying the success stories of the iPhone, Apple, and Netflix to elaborate on the disruptive innovation used by them. They provided that the success of these companies’ models not merely relied upon the product improvement but also on the use of new business models. 

By creating a simplified network linking application designers with phone operators, Apple changed the competition (Christensen et al., 2015). There are several types of disruptive innovations: disruptive digital innovations, disruptive business-model advances, and disruptive product improvements, all of which are profoundly distinct from one another (Markides, 2006). Several traditional retailers use inventory-based, predictor, and push supply chain processes (Jin and Shin, 2020). The process often leads to an increased disparity between the predicted and real customer demand, resulting in substantial markdowns and expanded inventory that decreases the retailers’ profits. The resulted markdowns ratio is relatively higher for fashion retailers due to the inherent demand uncertainty attributed to fashion and seasonal changes and the role of personal sizes and preferences (Jin Chang et al., 2011). The research concluded that the average markdown ratio of the industry is around 50%, and the average forced closing season markdown is about 10 to 25% (Jin and Shin, 2020). As visible in many store closures and bankruptcies in recent times, these business models are not sustainable. In 2017, around 300 retailers reported bankruptcy which increased up to 31% from 2016 (Isidore, 2017), and about 9500 stores were closed, which increased from 53% in 2008. The core of successful business model innovation is to stress the process that helps companies generate values, including value creation and how it captures the value as revenue. Hence, it is significant to understand the process of successful business models for creating and capturing the values from emerging cases. The three main disruptive business model innovation ideas include the innate digital startup business, fashion retailing market, artificial intelligence-enabled product design, demand forecast, and collaborative consumption. Each disruptor possesses the ability to influence main players in the market by challenging the long-held assumptions in the recent business models through their specific value-creating and capturing models. The disruptive innovation changes how the organisation measures its processes and the ways it adapts to fit in the new modifications to facilitate better service provisions and shift the industry operations. It can help improve and modernise the organisation that further promotes the businesses. Thus, it will be utilised for the present essay to study the working of Burberry and its innovations with the products. 

3.0 Theory Application

The early use of innovation and technology in the fashion industry started in the 19th century. Domestic consumers readily adopted the initial use of manual sewing machines in garment factories by the end of the 19th century. In the early 20th century, electric sewing machines were widely used, and computer-controlled sewing machines were introduced into the fashion industry. The world had access to 3D devices, and by 2010, designers widely used 3D printing in their shows. The van Herpen from Ireland was the first to introduce the wow-effect during the display of 3D dresses in Amsterdam Fashion Week (Gupta, 2021). Before the invention of online and social media platforms, the fashion industry innovations were extremely slow, and designers declined to upload their dresses photographs on the internet. The launch of the Net a Porter (2000), the first luxury fashion retailing eCommerce store, transformed the processes of luxury retailing. Alexander McQueen put forward the first robotics used in the fashion industry in 2000 (Mower, 2018). Their core theme was to introduce a model in white McQueen attire with two robots that sprayed paints on the dress during the fashion show. 

All these innovations were readily adopted by Burberry, leading to the company’s digital revolution that entirely modified the industry’s direction, making their brands market leaders and initiators of digital communications. The Burberry chief executive Angela Ahrendts 2006 feared the loss of her brand identity as an iconic product, which was most famous for its fancy trench coats. The company’s CEO hired a brand czar, Christopher Bailey, a technology enthusiast, to bring the controls on the designs again. He appointed coders and people from different gaming markets along with designers. They pointed out that for effective communication, they require a medium language chosen as digital language. They committed to making Burberry the first digital luxury organisation, and the company started the transformation to make the online consumer’s experience identical to offline channels. It was the first company to provide online live streaming and videos and established Burberry retail Theatre in 2011, enabling consumers to purchase the products directly from the catwalks. The company continued its digital leadership in fashion luxury to date and is the pioneer in opening the luxury sector’s first commerce store in an oversea country. The new store was started in China in September 2020, facilitating the consumers to share personalised content experiences online (Gupta, 2021). Through its diverse digitalisation and innovative methods, Burberry has reached its objective of offering an entry point for the luxury label millennials recognised as ladies who launched in the past (Capgemini Consulting, 2021). Since the introduction of its idea of brand digitalisation in 2006, Burberry has seen a two-fold increase in its stock price and has effectively bought its target consumers close to the brand in a fashion no other luxury company has tried before. In its journey to becoming the first-ever completely digital company, Angela Ahrendts sought to purify the fashion industry messages and their approach to reach the goal by emphasising outerwear, focusing on digitalisation, and targeting the younger generation of customers (Ahrendts, 2013). In 2009, the company started its ‘Art of the Trench Coats’ innovative promotion that enabled the followers to picture themselves with the famous trench coat and reveal it on the social media platforms of Burberry, where followers would like or comment on it. By tackling the core requirements of several new luxury style consumers to showcase their fashion, the company has not only succeeded in increase brand awareness but also retained its image by offering more reasonable product lines for the customers (Davis, 2014).

In 2011, the company introduced ‘Burberry Bespoke’, enabling the customers to personalise the trench coats from the coat’s buttons, colour, and sleeves. Customisation continued to be the focus of Burberry for fulfilling the new generation’ desire to look different from their peers by getting a particular statement. Synchronised with its campaign involving the Art of Trench Coats, the company became among the pioneer’s first luxury products to integrate social networking sites into their advertising strategies. The brand utilises Facebook and followers’ reactions for sharing the catwalks recording and directly connect with Bailey. In 2014, the company achieved the title of the first luxury brand for signing up to Twitter to introduce the ‘Buy Now’ key to facilitate the instant purchase of the product as they view them online (Kilcooley-o-Halloron, 2014). Burberry’s Twitter account deals with customers’ queries 24/7 to guarantee effective customer gratification and direct relation with its customers. The brand essentially removed the loose funnels of its consumers’ decisions opposed to the product buying as their problems remained unanswered up until the working day. It was especially targeted at new generation who are constantly online and want a quick response to product-related queries and complaints. However, they acknowledged that not all their young consumers could afford their luxury, expensive trench coats. Thus, Burberry Kisses was established in collaboration with Goggle to send digital copies of customers’ lip prints on the postcards after colouring Burberry’s one of five lip colours for free. It was one of its strategies to promote its brand among the younger generation as the brand created an environment where everyone wanted to shop. Now, its products are tiered up so the young generation with a limited budget can work on ground levels before promoting themselves with an increase in age and experience (Britton, 2014).

4.0 Future Development 

With its innovative and consumer-centric approaches, Burberry has become one of the most popular businesses, with several franchises and luxury brand stores worldwide (Zozulya et al., 2015). The company is among the 100 best- performing organisations in the country under the raking of London Stock Exchange. In light of statistics and additional core business researchers, experts believe that organisation has many revolution openings for its continuous performance and overcoming the potential threats that may endanger its progress. The company has successfully digitalised its business to penetrate a younger generation of consumers compared to other luxury products. By offering innovative and seamless facilities for the new generation of consumers, the company has effectively formed trustworthy followers who will collaborate with the product for a long time (Inhora, 2016). The access point advertising, including Burberry Kisses and Burberry cosmetics campaign, can incorporate into the emerging brand market to guarantee the upcoming generation completely embrace the brand.

Despite its immense efforts, the company has continuously faced healthy competition from the competing firms that produce similar products. The company’s main competition includes Armani, Coach, and Polo; presently, Burberry has managed to control more than 10% of the international market divide (Huizingh, 2011). Polo has now shifted its product line to focus more on the production of luxury clothes, and it is estimated to have covered a major part of the market share due to its decreased prices compared to Burberry. Additionally, the company provide high-quality brands that most consumers embrace. Moreover, Armani has also maintained its luxury position in the global market and has continuously challenged Burberry to fulfil its global luxury products demand (Straker and Wrigley, 2016). It is worth noting that the company is able to offer several innovative procedures for meeting the improving product demand. The company’s strategies have offered the most thoughtful approaches to achieving its strategic objectives and goals. However, some challenges the organisation faces are not under its control, including the economic instability of the country it operates in, the political situation, and strong competition. Therefore, Burberry needs to adopt other important channels to promote its product in a more significant market and ensure its consistent progress and dominance. The new approaches must involve innovative measures, including mergers, product promotion, and earning consumers’ trust. Moreover, the company needs to continue with its strategy for enhancing its status as the most durable and best luxury brand name in the marketplace. 

5.0 Conclusion 

The present essay used the disruptive innovation theory to explain the performance and sustainability of Burberry, a famous luxury brand. The theory provided how the company adopted the innovation to disrupt the global fashion industry and made its mark by surpassing its competitors. It also identified the challenges impacting the company’s performance and how it can improve its business to stay ahead in the market. 

References

Ahrendts, A. (2013). Burberry’s CEO on Turning an Aging British Icon into a Global Luxury Brand. [online] Available at https://hbr.org/2013/01/burberrys-ceo-on-turning-an-aging-british-icon-into-a-global-luxury-brand

Backstrom, I., and Lindberg, M. (2018). Behavioural implications of employee-driven innovation – a critical discourse analysis. International Journal of Innovation Management, 22 (7), pp. 1-18

Britton, (2014). Trench Coat Warfare. [online] Available at http://www.brittonmdg.com/the-britton-blog/trench-coat-warfare/

Burberry, (2022). Approach to responsibility. [online] Available at

Burberry, (2022). Our purpose. [online] Available at https://www.burberryplc.com/en/company/our-purpose.html

Brand Burberry, (2022). Part 1: Burberry’s background. [online] Available at https://brandburberry.wordpress.com/assignment-1-brand-identity/

Burberry, (2022). Approach to responsibility. [online] Available at https://www.burberryplc.com/en/responsibility/approach-to-responsibility.html

Capgemini Consulting, (2021). An Interview with Angela Ahrendts, Burberry’s Digital Transformation. [online] Available at http://ebooks.capgemini-consulting.com/Angela-Ahrendts-Interview/files/assets/basic-html/page1.html

Christensen, C. M. (1997). The Innovator’s Dilemma. Boston, MA: Harvard Business School Press.

Christensen, C. M., Raynor, M., and McDonald, R. (2015). What is disruptive innovation? Harvard Business Review, 93(12), pp. 44-53.

Christensen, C. M., M. Raynor, and R. McDonald. (2016). The Disruption Debate: Interaction. Harvard Business Review, 94 (3), pp. 16.

Davis, S. (2014). Burberry’s Blurred Lines: The Integrated Customer Experience. [online] Available at https://www.forbes.com/sites/scottdavis/2014/03/27/burberrys-blurred-lines-the-integrated-customer-experience/?sh=b8148ac3cc61

Funk, J. (2018). Technology Change, Economic Feasibility, and Creative Destruction: The Case of New Electronic Products and Services. Industrial and Corporate Change, 27 (1), pp. 65–82.

Gobble, M. M. (2015). The Case Against Disruptive Innovation. Research Technology Management, 58 (1), pp. 59–63.

Gupta, A. (2021). A digital disruption. [online] Available at https://www.fibre2fashion.com/industry-article/8961/a-digital-disruption

Ho, J. C. (2021). Disruptive innovation from the perspective of innovation diffusion theory. Technology Analysis & Strategic Management, pp. 1–14.

Huizingh, E. K. (2011). Open innovation: State of the art and future perspectives. Technovation, 31(1), pp. 2-9.

Inhora, A. (2016). Burberry: Digitizing the Trench. [online] Available at https://digital.hbs.edu/platform-rctom/submission/burberry-digitizing-the-trench/

Isidore, C. (2017). Retail bloodbath: Bankruptcy filings pile up. CNN Business. [online] Available at https://money.cnn.com/2017/06/13/news/companies/retail-bankruptcies/index    

Jin, B., Chang, H. J., Matthews, D., and Gupta, M. (2011). Fast fashion business model: What, why, and how? In T.-M. Choi (Ed.), Fashion supply chain management: Industry and business analysis (pp. 193e211).

Jin, B., and Shin, D. (2020). Changing the game to compete: Innovations in the fashion retail industry from the disruptive business model. Business Horizons, 63(3), pp. 301-311.

Kivima, P., Laakso, S., Lokina, A., and Kaljonena, M. (2021). Moving beyond disruptive innovation: A review of disruption in sustainability transitions.Environmental Innovation and Societal Transitions, 38, pp. 110-126.

Mower, S. (2018). Remembering the Potent Performance Art of Alexander McQueen’s Collection No. 13—20 Years Later. [online] Available at https://www.vogue.com/article/alexander-mcqueen-no-13

Net-A-Porter, (2000). Welcome to NET-A-PORTER. [online] Available at https://www.net-a-porter.com/en-us/content/about-us/

Pham, T.-T. T., and J. C. Ho. (2015). The Effects of Product-Related, Personal-Related Factors and Attractiveness of Alternatives on Consumer Adoption of NFC-Based Mobile Payments. Technology in Society 43, pp. 159–172.

Rogers, E. M. 2003. Diffusion of Innovations: Fifth Edition. New York: Free Press.

Statista, (2021). Brand value of leading 10 luxury brands worldwide. [online] Available at https://www.statista.com/statistics/267948/brand-value-of-the-leading-10-most-valuable-luxury-brands-worldwide/

Zozulya, D., Radomski, D., Boey, E., Lozanoski, H., Nathani, A. and Sheppard, J. (2015). Burberry Group PLC.