Case #7 Coach

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1. What is Coach's strategy to compete in the handbag and leather accessories industry? Has the company's competitive strategy yielded a sustainable competitive advantage? If so, has that advantage translated into superior financial and market performance? Coach’s Strategy: * Store expansion in the US, Japan, Hong Kong, and China * Increasing sales to existing customers to drive comparable store growth * Building market share in the men’s market, by introducing men’s-only stores and building on the dual-gender concept (in China) * Creating alliances to exploit the Coach brand in additional luxury categories * Also considering expanding into the European markets Coach’s competitive strategy of assessable luxury goods, as well as being priced to sell more volume over making the higher profit margin, and having a target market that reaches more than other luxury brand’s target markets. (Coach’s target market takes the top 20%, whereas other brands take the top 1% of wealthy customers in a segmented area). Coach has sustained a competitive advantage with its extended product line offering more than just handbags and leather accessories, by offering key fobs, sunglasses, scarfs, prescription glasses, (licensing agreements extended to third parties for) watches, shoes, and more. They also have taken the time to hire the right people and designers that are not just creating freely anymore. The have a method of researching, developing, testing, and updating. They are continuously researching and testing their products to keep up with the volatile fashion industry. Since Coach’s prices allow for greater volumes of sales, which might have lower profit margins than it’s competitors, they are apparently doing things right. They have about 70% of their US sales coming from direct-to-customer sales. They sought after full-price stores, and ways to attract

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