Coach Inc. Case Study

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Case Position Paper B - Coach Inc. - by Henrik Müller
1. External Environment
1.1 General Environment
1.1.1 Economic Environment:
As the case is from 2006 the company was probably facing some issues between 2007 and 2010. Luxury goods are usually one of the first market segments to decline in case of an Economic downturn / crisis. However, the fact that Coach Inc. is a lot cheaper and therefore have a broader customer base than most of their competitors, they are probably facing less financial problems than them and might therefore be able to keep or even further improve their current market share.

1.1.2 Global Environment
In recent years, the number of wealthy households, especially in Eastern Europe and Asia increases at a high pace.
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2. Internal Assessment
2.1 Resources and Capabilities
2.1.1 Quality
Clearly, quality is the most important capability of this company. Even thoug Coach Inc. offers prices as low as 50 % lower than those of direct competitors, they are still able to sell products with the same or even higher quality standards. Furthermore, they offer to refurbish or replace any broken handbag, no matter how old it is. I believe this is a unique selling proposition in this market and is a great way to enhance consumer trust and therefore retain customers. The survey winning (in 2006) customer service and shopping experience in their stores helps emphasize on that.
Quality is definitely their most important core competency. While other companies might design products that are more appealing to target customers, no one of them can offer the price/quality ratio that Coach Inc. offers to consumers. Therefore, Coach are able to create more valuable products than their competitors.

2.1.2 Human Resources
As the company was established in 1941, they are very experienced in this field. Also, they are one of very few American luxury brands, which can be a strength in the sense that some consumers who prefer American luxury goods, would rely on Coach Inc., since it is the most successful American based manufacturer. Furthermore the very successful company history is an indicator for the very experienced and skilled human resources the company has.
While I would not classify

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