Coach Inc.: Is Its' Advantage in Luxury Handbags Sustainable?

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Situation analysis 1. Coach present market position; Strengths: * Ability to match key luxury rivers in quality and style but beating them in price by more than 50% * Can serve both middle and high income customers (while the low price and good designs are appealing to the low income customers, the high quality is also a pooling factor to the high income customers.) * Best selling Brand in the industry by 2006 with about 25% market share in the USA and second best selling in Japan with about 8% market share in same year. * Attractiveness of the coach retailed store. A survey in the USA rang coach in terms of store atmosphere, 10th among top rated stores in the USA with a score of 84% not very far from that of Louive…show more content…
Coach created the “accessible” luxury category in ladies ‘handbags and leather accessories by matching key luxury rivals on quality and styling, while beating them on price by 50 percent or more. Beyond its winning combination of styling, quality, provided by its employees contributed to its competitive advantage. Much of the company’s growth in net sales was attributable to its rapid growth in company-owned stores in the United States and Japan. Coach’s factory stores had achieved higher comparable store growth during 2005 and 2006 than its full price stores. At year-end 2006, comparable store sales in Coach Factory stores had increased by 31.9 percent since year-end 2005, while comparable store sales for Coach full price stores experienced a 12.3 percent year-over-year increase. In 2006 Coach Products were sold in 218 full-price company-owned stores, 86 factory stores, 900 U.S. department stores, 118 locations in Japan, and 108 international locations outside Japan. Weaknesses and threats * Coach entry to new market in Asia And eastern Europe has been very slow therefore given it competitors the opportunities to lead in such markets. * Most company research and findings are only based on American markets. * Increase competitions from other designers especially France and Italy. * Increase counterfeiting of original designer products. Opportunities * Growth tendency in the

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