BURBERRY

BURNS UNSOLD STOCK

INTRODUCTION

• THE CASE REVOLVES AROUND BURBERRY GROUP PLC, A UK-BASED LUXURY

FASHION BRAND, WHICH CAME UNDER CRITICISM FOR DESTROYING
SURPLUS STOCK WORTH £28.6 MILLION IN THE YEAR 2017-18. ANALYSTS AND
ENVIRONMENTALISTS CRITICIZED THE COMPANY FOR BURNING THE STOCK
WHEN IT MIGHT HAVE BEEN DONATED TO A GOOD CAUSE OR RECYCLED.

• BURBERRY'S DECISION TO CALL OFF ITS POLICY OF BURNING EXCESS STOCK

AND ITS PARTNERSHIP WITH A SUSTAINABLE LUXURY COMPANY ELVIS &
KRESSE TO RENOVATE 120 TONNES OF LEATHER OFFCUTS INTO NEW
PRODUCTS BY 2024. HOWEVER, THE INCIDENT HIGHLIGHTS THE NEED FOR
LUXURY BRANDS TO ADOPT SUSTAINABLE PRACTICES AND BE MORE
RESPONSIBLE IN THEIR APPROACH TOWARDS EXCESS STOCK.
FACTORS THAT AFFECTED THE DECISION

• MAINTAINING EXCLUSIVITY: BURBERRY MAY HAVE DESTROYED

EXCESS STOCK TO MAINTAIN ITS UNIQUENESS IN THE MARKET. THE
BRAND'S REPUTATION AS A LUXURY FASHION BRAND IS BUILT ON
EXCLUSIVITY, AND OVERPRODUCTION HAVE LED TO THE DILUTION OF
ITS BRAND VALUE.
• PREVENTION OF GREY MARKETING: BURBERRY MAY HAVE WANTED
TO AVOID ITS CLOTHES FALLING INTO THE HANDS OF COUNTERFEITERS AND
GREY MARKETERS WHO SELLS THEM AT A DISCOUNT,
DEVALUING THE BRAND.
• BRAND REPUTATION: THE BACKLASH AND CRITICISM THAT BURBERRY
FACED AFTER THE INCIDENT SEVERELY IMPACTED THE BRAND'S IMAGE. AS A
LUXURY FASHION BRAND, MAINTAINING A POSITIVE IMAGE IS CRUCIAL TO
ITS SUCCESS, AND THIS INCIDENT MADE BURBERRY REALISE THAT IT NEEDS
TO START USING MORE ENVIRONMENTALLY FRIENDLY TECHNIQUES
ROOT CAUSE ANALYSIS :

CAUSE MAPPING:

1.DEFINE
WHAT: INVENTORY LEFT
WHEN: SEPTEMBER 6 2018
WHERE: UK
2.ANALYSIS
IN ROOT CAUSE ANALYSIS WE ASKED SET OF WHY?
3.PREVENT
• IMPROVE PRODUCTION PLANNING AND FORECASTING TO
PRODUCE ITEMS THAT ARE IN HIGH DEMAND AND
REDUCE OVERPRODUCTION.
• IMPLEMENT BETTER INVENTORY MANAGEMENT PRACTICES
TO ENSURE THAT EXCESS STOCK IS MINIMIZED AND
PRODUCTS ARE SOLD IN A TIMELY MANNER.
• EXPLORE MORE SUSTAINABLE DISPOSAL OPTIONS, SUCH AS
DONATING UNSOLD STOCK TO CHARITIES OR RECYCLING
MATERIALS TO REDUCE WASTE.
ETHICAL DELIMMA

• FROM A UTILITARIAN PERSPECTIVE, THE ACTION OF BURBERRY

DESTROYING THE SURPLUS STOCK WAS NOT THE MOST ETHICAL
CHOICE AS IT LED TO HARM TO THE ENVIRONMENT AND CAUSED
OUTRAGE AMONG STAKEHOLDERS. A BETTER APPROACH WOULD
HAVE BEEN TO FIND A WAY TO DISTRIBUTE THE EXCESS STOCK TO
PEOPLE IN NEED OR TO USE IT IN A WAY THAT WOULD NOT
CONTRIBUTE TO WASTE AND POLLUTION. THE SUBSEQUENT
DECISION BY BURBERRY TO RECYCLE THE SURPLUS STOCK AND
PLEDGE TO NO LONGER USE FUR IN ITS CLOTHING IS A POSITIVE
STEP TOWARDS A MORE ETHICAL AND SUSTAINABLE
APPROACH TO FASHION.
7 STEPS DECISION MAKING
• DENTIFY THE PROBLEM: THE ISSUE IS THAT IN 2017-18, BURBERRY GROUP PLC DESTROYED EXCESS
STOCK WORTH OF £28.6 MILLION AND FACED CRITICISM FROM ANALYSTS AND ECOLOGIST FOR NOT
BEING SUSTAINABLE.
• GATHER INFORMATION: WE GATHERED THE INFORMATION ABOUT THE COMPANY'S EXCESS STOCK
POLICIES AND WHY THEY CHOSE TO DESTROY THE PRODUCTS. HAVE TO DO INVESTIGATE THE
PERSPECTIVES OF ANALYSTS AND ECOLOGIST ON THE SUBJECT..
• IDENTIFY ALTERNATIVES: TO DETERMINE ALTERNATIVE SOLUTIONS TO THE PROBLEM, SUCH AS
DONATING EXCESS INVENTORY TO CHARITY OR DISCOUNT THE PRODUCTS OR ORGANIZING EVENTS.
• EVALUATE ALTERNATIVES: EVALUATE THE ADVANTAGES AND DISADVANTAGES OF EACH OPTION,
TAKING INTO ACCOUNT THE IMPACT ON THE COMPANY'S BRAND IMAGE, FINANCIAL IMPLICATIONS,
AND ENVIRONMENTAL IMPACT.
• CHOOSE THE BEST ALTERNATIVE: CHOOSE THE BEST ALTERNATIVE BASED ON THE EVALUATION, THE
COMPANY CAN ORGANIZE EVENTS AND DISTRIBUTE THEIR CLOTHING AS GOODIES TO PARTICIPANTS,
INCREASING THE VALUE OF THEIR BRANDING.
• IMPLEMENT THE DECISION: WE CAN GIVE THEM AS GOODIES IN THE FAMOUS HACKATHONS AND CAN
MAKE FUSION EXHIBITIONS REVIEW YOUR DECISION: AS WE TOOK THE DECISION THAT TO GIVE
GOODIES TO THE EDUCATIONAL PURPOSES AND THE FASHION DESIGNING EVENTS. ITS HELP IN THE
MARKETING OF THE ORGANIZATION THAT CONDUCTING THE EVENT AND THE BURBERRY COMPANY. IF
WE PUT A DISCOUNT OFFERS IT MAY LEAD TO THE DEGRADE THE STATUS OF THE
BRAND IN THE SOCIETY.
BY:
• MEDISHETTY YASHWANTH(2020BTECHCSE108)
• RATNALA HARSHA VARDHAN GOUD(2020BTECHCSE101)
• ENUGULA VAMSHI(2020BTECHCSE099)
• E. VENKATA SAI SARAN(2020BTECHCSE106)
• MITTAPALLY SAI CHARAN(2020BTECHCSE91)
• RANERU VENKATESH(2020BTECHCSE107)
• ESHWAR DOPALAPUDI(2020BTECHCSE98)