What is Coach’s strategy to compete in the ladies handbag and leather accessorie

Question

What is Coach’s strategy to compete in the ladies handbag and leather accessories industry?

Select “yes” for those statements that accurately describe Coach’s strategy, and “no” for those that do not.

Coach positioned its brand in the lower part of the “accessible” or “affordable” luxury market.
(Click to select)NoYes

Coach targeted the top 20% of Americans by household income rather than the top 3% to 5% targeted by most other luxury brands.
(Click to select)YesNo

Coach’s production outsourcing allows it to price its handbags between $200 and $1,000, giving it a best cost advantage in the industry
(Click to select)NoYes

Coach sold its products exclusively through full-price retail stores and department stores.
(Click to select)YesNo

Coach’s strategy included discount factory outlets to capitalize on the brand’s lead luxury image.
(Click to select)YesNo

More so than most other rival luxury goods manufacturers, Coach is using a focused differentiation strategy with premium pricing.
(Click to select)NoYes

Coach’s wholesale distribution to international markets, particularly Japan and China, was an integral part of its growth strategy.
(Click to select)YesNo

Coach was focused very heavily on the department store market since the share of the U.S. retail market held by department stores
was fast-growing.
(Click to select)NoYes

Explanation / Answer

Ans: Coach Inc. which was founded in 1941 have few major problems like counterfeiting(fake or copy closely), competitive industry, expanding into Asian markets. They have identified few strategies-
(i) Collaborating with other luxury brands,
(ii) Target Male Asian markets,
(iii) Redesign stores.
(iv) Emerging market through Internet & e-commerce.
(v) Use of Porters 5 forces & SWOT analysis.

(a) Coach positioned its brand in the lower part of the “accessible” or “affordable” luxury market.
Ans- Yes.

(b) Coach targeted the top 20% of Americans by household income rather than the top 3% to 5% targeted by most other luxury brands.
Ans- Yes.

(c) Coach’s production outsourcing allows it to price its handbags between $200 and $1,000, giving it a best cost advantage in the industry.
Ans- Yes.

(d) Coach sold its products exclusively through full-price retail stores and department stores.
Ans- Yes, they also have Coach Factory store and through internet and ecommerce.

(e) Coach’s strategy included discount factory outlets to capitalize on the brand’s lead luxury image.
Ans- Yes. It allows the company to maintain a year-round full price policy in its full price retail stores.

(f) More so than most other rival luxury goods manufacturers, Coach is using a focused differentiation strategy with premium pricing.
Ans- Yes. It is keyed to image, product quality, styling, customer service, and attractive retail stores.

(g) Coach’s wholesale distribution to international markets, particularly Japan and China, was an integral part of its growth strategy.
Ans- Yes. It became second best-selling brand with 8% market share in Japan. And received growth for luxury goods in India and China.

(h) Coach was focused very heavily on the department store market since the share of the U.S. retail market held by department stores
was fast-growing.
Ans- Yes.

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