Coach Inc. Essay Example
Coach Inc. Essay Example

Coach Inc. Essay Example

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  • Pages: 4 (1038 words)
  • Published: September 19, 2017
  • Type: Essay
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Coach, a luxury goods company, became an independent entity through a public offering. Coach differentiated itself in the accessible luxury market by providing high-quality products at lower prices compared to other luxury brands. The company formed strong partnerships with retailers such as Bloomingdale's and Saks Fifth Avenue. However, Coach faced challenges in the 1990s when consumers began favoring fashionable French and Italian designer brands. To address this, Coach hired a new creative director and conducted extensive customer research on style, comfort, and functionality preferences. These efforts allowed Coach to establish a successful presence in the accessible luxury segment within Sara Lee's business portfolio. Eventually, Sara Lee decided to spin off Coach via an IPO in 2000. This move proved advantageous for Coach as its annual sales skyrocketed to $4.2 billion by 2012 – quadrupling


its growth. In that year, the company focused on global expansion targeting markets like the US, Japan, Hong Kong, China Europe, and North America. However, intense competition from established brands posed a threat to Coach's expansion plans. Additionally,, building brand loyalty in emerging markets such as China and India was also of importance to Coach.
Coach aimed to increase its profit margin and stabilize its stock, which had decreased by approximately $20 in the first half of 2012. Internally, Coach conducted a SWOT analysis to identify its strengths and weaknesses. The analysis revealed that Coach's product quality was comparable to its competitors but sold at a 50% lower price. The merchandise was distinct, easily recognizable, and of high-quality craftsmanship. Regardless of the age of the bag, excellent service for clients was the primary strength of Coach. However, a weakness was that th

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company's merchandise could easily be imitated. Furthermore, the decrease in monetary value indicated Coach's vulnerability to economic conditions.

According to the Resource Based View theory, a company's resources and capabilities are crucial determinants of its competitive advantage and market success. Coach possessed tangible assets such as numerous global stores, sourcing flexibility, and a strong control and research development system. Additionally, it had intangible assets like a strong reputation reported by Women's Wear Daily. In 2014, Forbes recognized Coach one of the 100 most valuable brands worldwide. Moreover, Coach Inc.had successful partnerships with companies in China,Vietnam India,Hong Kong South Korea,and others for product manufacturing.Coach's diverse range of resources distinguished it from its competitorsCoach Inc. possesses valuable knowledge of consumer preferences and has a strong and long-lasting manufacturing and merchandise development contract with outsourcing company Immobile, ensuring that Coach's resources and capabilities will remain within the company for a significant period of time. Coach's good reputation and positive relationship with outsourcing companies serve as valuable core competencies.

In terms of the value chain analysis, Coach focuses on a number of primary activities. Supply chain management is crucial, as Coach carefully selects high-quality leather through their procurement process. This emphasis on quality helps build their reputation for producing products of high quality and value. The operations of Coach's merchandise are based on their sourcing agreement with reputable offshore manufacturers, allowing them to maintain consistent production processes and high-quality standards.

Distribution plays an important role in Coach's business strategy, utilizing both direct to consumer channels (such as brick-and-mortar stores in the United States, online sales, catalog sales) and indirect channels (wholesale accounts with department stores domestically and internationally). Sales and marketing

efforts aim to increase consumer visits and brand awareness.Yes, Coach's strong relationships with offshore manufacturers and its luxury image in the market make it a rare resource.
Is the resource "inimitable"? Yes, other luxury handbag brands may find it difficult to replicate Coach's extensive network of shops and partnerships with offshore manufacturers.
Is the resource "organized"? Yes, Coach effectively utilizes its resources by conducting consumer research, providing regular client service training programs, and engaging in various direct selling activities.

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Coach consistently introduces new products to encourage frequent purchases. Their full-price stores are designed to showcase a luxurious image, which helps boost brand awareness and capture a larger share of the market. In terms of marketing, Coach interacts with customers through email communication, website promotions, catalogs, and brochures. They also offer refurbishment or replacement services for damaged pocketbooks regardless of their age. During busy shopping periods, extra shop employees are provided to ensure customer satisfaction. Moreover, they have a special petition service that allows customers to order products for home delivery if a specific pocketbook is not available in-store.

To support their operations further, Coach conducts quarterly consumer research to identify trends and preferences. They also provide regular training programs for shop employees on client service. Additionally, Coach collaborates with 40 providers in 15 countries as part of their partnership with offshore manufacturers – enabling them to maintain competitive pricing advantages compared to other luxury handbag brands.

Using the VRIO approach: Are these resources valuable? Yes – due to their global presence and strong relationships with offshore manufacturers that allow them to remain competitive in terms of price while maintaining a good reputation as a brand. Are these resources

rare? Yes – other luxury handbag brands would struggle to replicate Coach's extensive network of shops and partnerships. Are these resources inimitable? Yes – it would be challenging for competitors to imitate such established relationships within the industry. Lastly, are these resources organized? Yes – Coach effectively utilizes its resources through consumer research, client service training programs, and various direct selling activities.

Obtaining the title of the world's most valuable brand is no easy feat for Coach. This achievement gives them a strong advantage in the industry. The question arises, can this resource be imitated? Coach possesses valuable research on their partnership with offshore industries, making it challenging for competitors to replicate. The text implies that Coach Inc. has a competitive edge in the industry and offers products that provide value to middle-income women seeking a luxury brand experience. To successfully enter the European and North American markets, it is recommended that Coach Inc. develops a more unique strategy since many luxury brands in these regions offer similar value propositions. This distinctiveness would position Coach as not only a luxury brand but also as something that evokes emotions within its customers.

Bibliography: Forbes, Strategic Management Insight

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