Case Study : Coach Inc.

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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, 2015, Page 71). The qualities of these luxury goods are rare, desirable, hard to replicate, and have a strong brand reputation. Firms within this market choose to compete domestically, in North America, and globally, in Europe, and more recently Asia. Within the luxury goods market, there are three sub-categories: haute couture, traditional luxury, and accessible luxury. When Krakoff joined Coach in 1996, he implemented a successful strategy to develop the “accessible luxury” segment. By 2000, Coach was dominating the sub-category market over its new competitors DKNY, Dolce & Gabanna, Giorgio Armani, and etc. The luxury goods industry had a direct bearing on Coach’s profit potential. This effect can be explained by looking at the environmental layers in detail, moving from Coach’s general environment to its task environment. Starting with the global environment, the PEST model categorizes the external factors that created both opportunities and threats for the firm. Piracy and counterfeiting issues are important political/legal factors that Coach, Inc. and the rest of the luxury goods industry had to take into consideration. All luxury brands found themselves caught in a legal fight against

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