Executive Summary:
In 1941 Miles Cahn, a leather artisan, started producing women’s luxury handbags in a loft located in Manhattan, New York, which were simple in style but resilient and suitable for daily use. After 40 years in business the company named Coach was able to grow continuously by setting prices 50 percent lower than the competition and introducing new models every year. Coach estab-lished over the years accounts with retailers such as Bloomingdale’s and Saks Fifth Avenue for instance and achieved extraordinary growth rates. In 1985 the company was acquired by the Sara Lee Corporation and went thru an initial public offering in 2000.
In the luxury goods industry where market characteristic tends to be highly sen-sitive to economic up- and downturns, Coach had the ability to establish and maintain brand loyalty and reputation through various strategies. Coach’s im-mense success has been largely attributable to its focus on quality and stylish products with respect to consumer needs derived from their detailed marketing research. Its “affordable luxury goods” price strategy also assist to drive growth by attracting a wide range of consumers, while at the same time, correspond to changes in middle-income consumer behavior and lifestyle.
The Coach Inc. case study analysis the success of Coach and the luxury good industry in general. Further the external environment and internal circumstances as well as the competitive situation of Coach are discussed. The assignment concludes with recommendations for further success of the company and the ITM checklist.
Table of Contents
1. History of Coach Inc.
2. Luxury Good Industry
2.1. Characteristics
2.2. Competition
2.3. Luxury Handbags and Leather Accessories Market and Key Success Factors
3. Coach Inc.’s Competing Strategy
4. Coach Inc. SWOT-Analysis
5. Recommendation
Objectives and Core Themes
This assignment provides a comprehensive case study analysis of Coach Inc. and the broader luxury goods industry, examining the company’s strategic positioning, market environment, and the key factors contributing to its long-term success and sustainability.
- Evolution and historical development of Coach Inc.
- Market dynamics and competitive landscape of the luxury goods industry
- Application of Porter's Five Forces model to assess industry competition
- Evaluation of Coach Inc.’s "accessible luxury" business and pricing strategy
- SWOT analysis of Coach Inc.’s internal strengths, weaknesses, opportunities, and threats
Excerpt from the Book
1. History of Coach Inc.
In 1941, Coach Inc. was founded by Miles Cahn, a leather artisan, in a loft located in Manhattan, New York, garment district (Coach Inc., 23.01.2011). In 1960s the family-run business started manufacturing handbags and introduced their first collection which consisted of 12 different styled bags. The company was acquired in 1985 by the Sara Lee Corporation, a diversified food and consumer goods producer, which decided fifteen years later, in 2000, to spin off Coach through an IPO, an initial public offering (Wikinvest – Coach Inc., 2011).
After the acquisition in 1985, the Sara Lee Corporation followed the Coach’s strategy and operations but the company performance began to decline in the 1990s as consumer shifted preference to more stylish French and Italian handbags such as Gucci, Prada or Louis Vuitton. In 1996 Reed Krakoff, a former Tommy Hilfiger designer, became the new creative director of Coach who believed that new products should be based on detailed market research rather than on designer’s instincts (Coach Inc., 23.01.2011). The company conducted excessive research and held focus groups to ask customers about styling, comfort, and functional preferences. The outcome was that customers look for an edgier styling, softer leathers and leather-trimmed fabric handbags. These prototypes were tested in selected Coach stores for 6 months before announcing their official launch. This process allowed Coach to launch a new collection every month instead of twice a year (Coach Inc., 23.01.2011).
Summary of Chapters
1. History of Coach Inc.: Details the origins of the company, its acquisition by Sara Lee, and the strategic shift under creative director Reed Krakoff that revitalized the brand.
2. Luxury Good Industry: Examines the macro-environment, characteristics of luxury markets, and competitive dynamics using Porter’s Five Forces model.
3. Coach Inc.’s Competing Strategy: Analyzes the successful "accessible luxury" strategy that allowed Coach to gain significant market share by balancing quality, design, and competitive pricing.
4. Coach Inc. SWOT-Analysis: Identifies the internal and external factors influencing the company's performance, highlighting strengths like customer loyalty alongside challenges such as seasonality.
5. Recommendation: Offers strategic advice for the company's future, including market expansion and operational improvements.
Keywords
Coach Inc., Luxury Goods Industry, Accessible Luxury, Strategic Management, SWOT Analysis, Porter's Five Forces, Brand Loyalty, Market Research, Competitive Advantage, Retail Strategy, Fashion Industry, Leather Accessories, Business Sustainability
Frequently Asked Questions
What is the primary focus of this case study?
The study examines the business development and strategic management of Coach Inc. within the context of the global luxury goods industry, focusing on its growth trajectory and competitive positioning.
What are the central themes discussed in the analysis?
The analysis focuses on market trends, competitive rivalry, consumer behavior, the "accessible luxury" business model, and strategic corporate planning.
What is the main research objective of this work?
The primary goal is to evaluate the sustainability of Coach Inc.'s adventure into luxury handbags and to determine the factors that led to its successful market growth.
Which scientific methods were applied in this assignment?
The author utilizes industry analysis tools, specifically Porter's Five Forces model, alongside a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to assess the company’s strategic standing.
What topics are covered in the main body of the paper?
The main body covers the history of the company, an overview of the luxury market environment, an evaluation of Coach's specific competing strategy, and a detailed internal/external strategic audit.
Which keywords characterize this paper?
Key terms include Accessible Luxury, Coach Inc., SWOT Analysis, Strategic Management, Competitive Advantage, and Luxury Goods Industry.
How does Coach's pricing strategy influence its competitive advantage?
By positioning itself as "accessible luxury"—offering quality comparable to high-end rivals but at prices 50 percent lower—Coach effectively captures both middle-income consumers and affluent buyers.
What role did market research play in Coach's recovery during the 1990s?
Under Reed Krakoff, the company shifted from relying on designer instinct to conducting extensive market research and focus groups, which allowed for monthly product launches aligned with current consumer styling and functional preferences.
How does the ITM checklist contribute to the assignment's conclusion?
The ITM checklist provides a structured summary of recommendations across diverse business areas such as financial management, human resources, and marketing, ensuring a holistic view of the company's needs.
- Arbeit zitieren
- Dipl. Ing. MBA Matthias Beer (Autor:in), 2011, Coach Inc. - Is Its Adventure in Luxury Handbags Sustainable?, München, GRIN Verlag, https://www.hausarbeiten.de/document/233265
