What, in your opinion, are the conditions contributing to Coach\'s demise? Which
ID: 414002 • Letter: W
Question
What, in your opinion, are the conditions contributing to Coach's demise? Which of Porter's Five Forces are contributing most to this demise? What, in your opinion, would be the key differentiating features sought among handbag customers? What could Coach do to re-earn lost business? Explain. What, in your opinion, are the conditions contributing to Coach's demise? Which of Porter's Five Forces are contributing most to this demise? What, in your opinion, would be the key differentiating features sought among handbag customers? What could Coach do to re-earn lost business? Explain.Explanation / Answer
The main reasons for the declining sales of Coach are the pricing, competition, and failed overseas business operations. Among Porter's five forces the main contributing factors are the competition, threat of substitution, and buyer power. Because there are other similar players in the market like Michael Kors and Kate Spade who maintain similar kind of market share and quality. They have been successful in retaining their customers through stock clearance sale in North America and other parts of the world.
The key differentiating factors would be the flexibility in pricing and the very concept of designer handbags. Most of the companies are trying to get out of that tag name and trying to attract the customers of age groups and buying power. But Coach is still going with the designer handbags was of business. They also don't have a good foreign currency exchange strategy for their business overseas. It is contributing to the loss of their business in Europe and the Asia Pacific. Compared to other brands in the market Coach is expensive for a buyer to purchase their product.
They need to become very flexible with their pricing and also in their approach towards segmenting the customers. They also need a new marketing strategy to get out of the designer handbags tagline and become a buyer-friendly product to increase the customer base. They have not reached the state of bankruptcy so it is high time for them to change their approach to stay in the market. Buyers so not pay just for the quality but they also want an equally good brand name as well. Become more customer friendly to retain the existing customers and also to attract the new customers.
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