A Sunburst Diagram is a representation of hierarchical categories. It looks like a pie chart, the difference is just that in this the hierarchical sub-categories are stacked upon each other. Every level of the hierarchy represents a ring.
Why do you need it?
We need sunburst diagrams as a substitute for the pie chart. It provides more information about the categories. The color scheme of the diagram helps to distinguish different categories.
What kind of data you can visualize with it?
We can visualize hierarchical-data with this chart. Assume you have a dataset of an employee of two companies. Here senior managers of both companies will lie on the 1st ring with their respective proportion. Over them, the 2nd ring will be of managers. The 3rd ring will show team leaders above their respective managers, and so on. This will help to analyze the hierarchy of both the companies and compare them easily.