Expansion, Brand And Competitive Scope

1158 Words5 Pages
Main issues: The main issues of Coach include expansion, brand dilution, and differentiation issues. The first issue is that Coach may have difficulty to entering into new markets such as Hong Kong, Macau, mainland China, Singapore, and Taiwan markets because it requires a huge capital to open retail stores and implement marketing plans. The second issue of Coach that is partnerships can be risky for luxury brands. If the paired up brands have lower level of quality and bad brand images, the Coach brand image may be damaged to causing brand dilution in the future Coach’s last issue is that Coach products are not unique enough to stand out in the luxury industry because many products in US and Japan markets have many similarities with…show more content…
Global factors: Global factors that may affect the analysis and recommendations include economic, social cultural, and political aspects. Economic: opportunities in global markets includes cheaper labor costs and rising level of income and wealth of middle class in those emerging markets such as China, India, and Brazil. Risks: labor costs may significantly increase in China market in the future and there is possibility of upcoming economic downturn. Socio-Cultural: Changing societal attitudes, and lifestyles represents both opportunities and risks to the luxury accessory industry. Opportunities: the changing preferences by middle class consumers towards luxury products create new opportunities for growth in both US and international markets. Risks: companies that shift manufacturing jobs to developing countries for cheap labor costs may be considered as cheap quality by consumers. Coach’s competitors like LV, Prada, and Gucci have still mainly produced in European areas. Therefore, luxury consumers may consider Coach products have the lowest quality in luxury industry. Political: Coach is subject to exchange rate risks like European debt crisis and different government regulations like proposed Chinese property law. It may cause problem for operations in Asian markets. Alternative 1: The first alternative is to
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