Case Study : Coach Inc.

This expansion demonstrates how the luxury industry is now run by massive corporations whose focus is only on growth, visibility, brand awareness, advertising, and most importantly, PROFITS! With growth and expansion, has come a decrease in quality and rarity. The luxury garments produced are mostly not handmade but are even outsourced to large factories in places such as China and Turkey. Also, to meet quarterly turnover projections, “designers churn(ed) out increasingly trendy collections of clothes, handbags, and shoes.” (Thomas, Pg. 246) With hundreds of new stores around the globe the surplus of designer labeled merchandise is immense hence, the proliferation of outlet malls.

Fast changes in environmental market place such as social development (globalization and development of social networks), economic unsteadiness (crises), technological progress, fast growing competitive world and strict marketing regulatory directly affect work of most of marketing companies or marketing and brand image divisions of the companies. I order to implement a successful campaign or increase sale and consumer awareness companies have to stay in pace with recent marketing environment and take into consideration every possible detail that might help or ruin image of a company or product.

The luxury market is growing fast in China and India due to the rapidly increasing wealth levels and standard of living gains. Coach must keep in mind the different cultural backgrounds of each country and take that into account when designing and marketing new products and lines.

The following case analysis will assess Coach Inc. and its strategy in the accessible luxury brand goods market. The coach strategy focuses on its luxury rivals in matching key quality styles while offering it at a cheaper price. The company offers most products at a 50% off discount price less than other brands which gives them a competitive advantage pertaining to its customer base. Coach marketed its products to middle –income consumers desiring taste of luxury, but also affluent and wealthy consumers with means to spend considerably more on a handbag (Gamble, 2012. P.C-73) .The Company also has several other strategies such as to increase global distribution, improve same store sales productivity and continue its multi-channel business model which includes indirect whole sales to third party retailers but also focuses on direct consumer sales. Coach has done well in the luxury goods industry but the companies profit margin is still below the levels achieved prior to the onset of a slowing economy in 2007 ( Gamble, 2012. P.C-73.The Company had experienced a decline in sales as they are unsure if the company recent growth could remain constant and maintain their competitive advantage with other successful luxury lines Michael Kors, Salvatore Ferragamo, Prada and Dolce & Gabbana.

Your post is very insightful and provides a great overview of the various components of a coach’s contract. As I begin to research the different facets of a coach’s contract, I came full-circle and wondered what is the difference between a coach and a tenured professor, other than the primary element of sport. A coach is an employee of an institution as is a tenured professor. Adopting the contract terms of a tenured professor could help de-escalate coach contracts and regulate the manner in which coaches seek employment as well as the manner in which they are sought.

An increasing economic interdependence of national economies across the world experiences a rapid cross-border movement of goods, service, technology and capital. Luxury goods industry, serve as one of the most competitive industry, emerging and developing rapidly all the time. To a great extent, globalization promotes the development of luxury goods industry significantly in spite of the big shock hit by several times of economic crisis.

Growth has been fueled by Coach’s niche as being ‘accessible luxury’. While Coach does not have the prices of most of its high-end competition, it is regarded throughout the industry, and most importantly by consumers, as being equal in quality to much more expensive brands.

But now, there are some of the luxury goods called accessible luxury, this kind of luxury specifically targeted the middle income consumers. Coach is one of these companies. There is no denying the fact that 4Ps theory is really important in marketing. The luxury goods industry also has competition. If we want to analysis the advantage in this industry, the Price, Place, Product and Promotion are the key words. The price can choose the different income class. The place directly determines the net sale. The product is the basically point for consumers to decide their purchase. The promotion is the basically way to increase the net sale. In luxury goods industry, the product was the most critical competitive advantage, but now the place and price has become increasingly important.

Peter Nicholson wishes to convert the factory in the north east to production of the electric taxi. Using data in Appendix C, Table 1, calculate payback period and the average rate of return.

Two threats that Coach and other luxury goods industries face are counterfeiting and the growing demand for luxury goods in emerging markets. An estimated amount of $300-$600 billion worth of counterfeit goods has been sold throughout the world (Thompson A., Peteraf, Gamble, & Strickland, 2014). Fake and knockoff brands have been an ongoing threat for the luxury goods industry since the mid-2000s. Many companies have been teaming up to develop practices for measuring and implementing piracy enforcement. Because counterfeiting has become so prevalent, many luxury brands have found this strategy to be financially and operationally beneficial.

A luxury brand may have profound influence on an overall product strategy since its position may determine how the company is going to make its next step. A luxury brand like Coach epitomizes elegance and combines classic beauty with modern design. According to John E. Gamble, not only has Coach become one of the most respected and known brand names in the ladies’ handbags and leather accessories luxury brand industry, it is also one of the most best-selling luxury brand companies in the world, with net sales reaching 2.1 billion in 2006 (Gamble). When a company like Coach decides to set up a product strategy for the next season, the

5. What is Coach’s strategy to compete in the ladies handbag and leather accessories industry? Has the company’s competitive strategy yielded a sustainable competitive advantage? If so, has that advantage translated into superior financial and market performance?

Coach has a very strong brand image. They continue to gain new customers and because of devotion and loyalty they are able to keep repeat customers. Brand image can be considered everything to customers when searching for a handbag. Industries that manufacture handbags must be able to provide what is considered a “chic service”, while continuing a “thriving business” (Foster, 2006). Due to the brand image that Coach has they are able to introduce new and more risky handbags with the confidence that most current consumers will continue to purchase their

This case study included information on a sample of fifty credit card accounts. This information, table one, included household size, annual income, and the amount charged to the account. Scatter plots of the data were produced. Figure one shows household size vs. amount charged. This graph shows that the positive linear relationship of the data is somewhat strong. The r squared is 0.56, analyzing the graph there is a correlation of household size to amount charged, but there is a range per household size.

Being a an international brand, there is a level of dependence on Italian markets with 90% of the stores situated in Italy and the equalisation crosswise over America, Paris and distribution over different countries of Asia, Europe, Canada and others. In spite of the fact that the model promotes luxury end products, it has been distinguished there is a related low level of client management which couples this recommending there is a need to take a shot at administration to guarantee a complete shopping background and guarantee rehash business inside of the current client base (Liesch, et al.,