Coach Inc. case analysis - Words | Bartleby


coach inc case study

View Notes - Coach Case Study from FINANCE at Auckland University of Technology. Coach Inc. in Its Strategy in the “Accessible” Luxury Goods Market John E. Gamble University of80%(5). CASE 7 - COACH INC. IN ITS STRATEGY IN THE ACCESSIBLE LUXURY GOODS MARKET GROUP 4 1 Executive summary Coach, Inc. is an upscale American leather goods company known for womens and mens handbags, as well as items such as luggage, briefcases, wallets and other accessories (belts, shoes, scarves, umbrella). The firm was founded in , in a loft in New York as 4/5(4). Jul 14,  · Case Study: Coach Inc. Words | 5 Pages. External Analysis Coach Inc. operates in the luxury goods industry where it sells high quality leather handbags, accessories, and other leather products. The scopes of the products within this market are rated high in their “quality, style, and value” (Gamble, , Page 71).

Coach Inc. Case Study

To browse Academia. Skip to main content. You're using an out-of-date version of Internet Explorer. Log In Sign Up. Coach Case Study. Keenan Midgley. Introduction Background in Brief: Coach was first established inas a small family run leather goods manufacturing business, coach inc case study. Coach was sold to Sara Lee in and experienced rapid expansion. While Coach initially grew it started to lag behind its competitors in terms of trendiness and sales began to decline.

In OctoberCoach went public under the name of Coach Inc. The Organization Today: Coach is one of the most recognized fine accessories brands in the U. Coach is a leading American marketer of fine accessories and gifts for women and men.

Coach operates in two segments: Direct-to-Consumer and Indirect. The Indirect coach inc case study includes sales to wholesale customers in over 20 countries, including the United States; royalties are also earned on licensed products. They want to have a fair salary and benefits for their hard work. This includes stock appreciation as well as an increase in the dividend.

Board of Directors and Management: are looking for Coach Inc. Customers: are purchasing Coach products primarily for the brand recognition and the perception of a status symbol. They also expect the quality good of the product to be superb.

Coach inc case study are ultimately looking to increase their market share and profits. External Analysis General Environment Macro : Economic: During the next several years the economy poses significant risk to the luxury industry in the coach inc case study markets, however, emerging markets such as China, India and Brazil are expected to experience strong growth in the luxury market as their middle class develops. The U. Furthermore there is currently no solution in sight regarding the European debt crisis.

Socio-Cultural: Changing societal concerns, attitudes, and lifestyles represents both opportunities and risks to coach inc case study luxury accessory industry. The changing preferences by middle class consumers towards luxury goods inevitably create new opportunities for growth within mature markets. Companies that shift manufacturing jobs overseas for lower wages have been criticized by consumers.

Companies need to evaluate the potential costs as well as benefits before manufacturing or dispersing their products into a country or region. Globalization: The primary reason for the increasing globalization is that firms within the industry are attracted by the rising level of income and wealth and the advantage of cheap labor within relatively new industrialized countries such as China, India, and Brazil. Technological Development: Firms need to continuously invest in technology in order to innovate products and minimize defects.

Luxury products need not only to deliver on quality to their customers, but also justify their premium prices over counterfeit products. Large global firms also require sophisticated websites that need to consider language, cultural elements and product lines. If Governor Romney wins the election he has stated that he will label China a currency manipulator which could result in tariffs and a stressed relationship. The legal fight against trademark infringement, trademark counterfeiting and patent infringement, and trade mark dilution is significant for the luxury accessory industry.

Companies spend millions of dollars trying to enforce intellectual property rights around the world coach inc case study working cooperatively with other companies within the industry, coach inc case study, and government agencies and law enforcement agencies.

It is estimated to grow by more than million individuals from to as global economic realignment continues to pick up speed. It is relatively easy for new companies to enter into the luxury apparel industry, however most companies lack staying power because they are undercapitalized. New Entrants generally lack marketing muscle to give their products the exposure required to build brand loyalty among consumers.

Brand names have become increasingly important to consumers. Bargaining Power of Buyers: Low-Medium : There are many different luxury accessory designers for consumers to pick among therefore, brand name and recognition is important. These cater to price conscious customers who do not need the very latest styles. Bargaining Power of Suppliers Low-Medium : Given the large quantities of goods Coach buys, the suppliers really want to have contract with them, therefore Coach has the bargaining power to negotiate prices.

Threat of Substitute Products Medium-High : There are two types of substitute products that could pose a threat to the company: alternative brands and counterfeits. Coach works cooperatively with its competitors to minimize the amount of counterfeit products in the market place by prosecuting companies.

Rivalry among Competing Firms Medium : Coach inc case study luxury handbag and accessories industry is highly competitive but not through price competition, coach inc case study. They all have slightly different products and compete for the upper class to upper-middle class. All the companies need to distinguish their brand and product. They also need to spot new trends and adapt quickly to the changing preferences.

Branding is incredibly important in this industry as in mature markets consumers tend to choose brands they know and in rapidly growing developing markets consumers want to own symbols of success. Competitor Analysis 1. Polo Ralph Lauren Corp. RL engages in the design, marketing, and distribution of lifestyle products. Price wise, it is at the lower end of the luxury market whereas Louis Vuitton and Gucci are at the upper end. The Company owns a portfolio of luxury brands and its business activities are divided into five business groups: Wines and Spirits, Perfumes and Cosmetics, Watches and Jewelry, Fashion and Leather Goods, coach inc case study, and Selective Retailing.

The competition with Coach comes primarily in the fashion and leather goods business but higher cost luxury firms like Gucci and Louis Vuitton do not want to compete on price in the luxury goods industry for fear of damage to their brand. Analysis of Interaction of External Forces The macro environment is challenging, particularly in mature markets but the opportunities globally should mitigate some of the coach inc case study. The competition is there but Coach has its own loyal followers dedicated to their brand name.

The threat of new entrants is low for reasons previously discussed. The threat of substitutability is also low which keeps the luxury industry extremely profitable as well.

Physical resources: As of June 30,Coach occupied retail and factory leased stores located in North America, Coach-operated department store shop-in-shops, retail stores and factory stores in Japan, coach inc case study, 96 Coach-operated department store shop-in-shops, retail stores and factory stores in Hong Kong, Macau and mainland China, and 34 Coach-operated department store shop-in-shops, retail stores and factory stores in Taiwan and Singapore.

Coach really utilizes new technologies such as their global web presence, with 17 informational websites in 18 countries. Trademarks and Patents: Coach owns the entire material trademark rights used in connection with the production, marketing and distribution of all of its products, both in the U.

Coach has revitalized its image to attract a younger demographic, coach inc case study. Coach is consumer-centric, and pays attention to its consumers needs and wants through consumer research. Reputation Resource, Perceived Quality: Since inception Coach has focused on creating quality products and it provides a lifetime warrantee for every Coach handbag.

Marketing Effective Promotion of Brand: Coach has been highly successful in promoting its brand of affordable luxury. Their after-sale service has engineered significant customer loyalty to the brand. Distribution Effective use logistics management techniques: Coach maintains three primary distribution centers: a distribution center in Jacksonville, Florida, owned and operated by Coach, an Asia distribution center in Shanghai, owned and operated by a third-party, and a distribution center, through a third-party, in Japan.

The warehousing of Coach Merchandise, store replenishment and the processing of direct-to-customer orders is handled by these centers. Through these different channels Coach is able to effectively appeal to multiple segments that are often overlooked by their competitors who are afraid of brand dilution. It is clear Coach has a superb management team that has created a vision and successfully implanted strategies to achieve that vision.

Their gross margin increased slightly to When products are well differentiated customers are less prices sensitive, coach inc case study. A well differentiated product line reduces chance of customers trying other products and switching to a different brand. Corporate Level Strategy At the corporate level Coach employs a related-constrained diversification strategy. As illustrated in table 1. Coach exhibits moderate forward integration as the company focuses on design, distribution, after-sale services and management, coach inc case study, however, it outsources manufacturing.

Their use of e- commerce allows virtual integration which creates market power and an avenue for closer relationship with customers. This relationship-building with customers is imperative for Coach to maintain its luxury brand image.

Table 1. Coach also benefits from economies of scale and scope and an increased market for their product offerings. By employing a transnational strategy Coach is able to achieve efficiencies while also being flexible enough to cater to local requirements.

Coach uses a host of global entry methods including, exporting, licensing, strategic alliances, and acquisitions, coach inc case study. Licensing: Coach also licenses certain products with partners outlined in Table 2. In these relationships, Coach takes an active role in the design process and controls the marketing and distribution of products under the Coach brand.

Table 2. These acquisitions provide the Company with a greater degree of control over the brand in these markets and enable Coach to raise brand awareness and grow market share with regional consumers.

Cooperative Strategies Over the years Coach has taken advantage of cooperative strategic alliances with companies to help enter markets and overcome uncertainties. Coach currently enjoys the benefits of a vertical complementary strategic alliance with its manufacturers within many different countries. This business level cooperative strategy helps Coach benefit by taking advantage of its manufacturers core competency of manufacturing quality products at an inexpensive price.

Synthesis Strengths 1. Strong Brand Image of "Affordable Luxury" Product Portfolio: Coach offers a wide range of merchandise through its stores, and reaches a larger demographic compared to many of Coach's higher-priced competitors.

Coach is the leading American manufacturer and retailer of leather goods, accessories and apparel for men and women in the U. S and the second highest-selling luxury handbag retailer in Japan. Their success has come in part from the tiered pricing strategy system and their distribution network including the factory coach inc case study stores. Global Presence Through its Comprehensive Distribution Channels: Coach operates through its two business segments: direct-to-customer and in-direct.

The company's direct-to-consumers segment provides with immediate, controlled access to consumers through Coach owned retail and factory stores in North America and Japan as well as their e-commerce site www. Strong Financial Position: With nominal long term debt, the long term debt to equity ratio is 0. Weaknesses 1, coach inc case study.

Dependence on Independent Manufacturers for Procuring Merchandise: Coach sources all its merchandise from independent manufacturers or vendors, coach inc case study.


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coach inc case study


Coach Case Study. Keenan Midgley. Introduction Background in Brief: Coach was first established in , as a small family run leather goods manufacturing business. Over time Coach became recognized as a premium brand that provided superior quality leather goods in classic styles and in the `s it opened exclusive Coach retail stores. Coach. Read this free Business Case Study and other term papers, research papers and book reports. Coach Inc. Case Study. The luxury goods retail industry experiences continual changing market trends and consumer preferences. Because of this it is rather /5(1). Jul 14,  · Case Study: Coach Inc. Words | 5 Pages. External Analysis Coach Inc. operates in the luxury goods industry where it sells high quality leather handbags, accessories, and other leather products. The scopes of the products within this market are rated high in their “quality, style, and value” (Gamble, , Page 71).