business strategy

Durability

Durability is an essential characteristic of any product and adds in a variety of ways to the customer. Coach Inc. has been known to produce products that are highly durable as the company uses genuine leather to make their products, for example, their women’s handbags. Tear and wear are expected of any product, as an individual uses a product over the years. Most companies capitalize on this and produce sub-standard products, which tear and wear quickly so that customers buy new products at regular intervals. The main disadvantage of using such a sale’s strategy is that most customers will opt to buy products from a company’s competitors if they are dissatisfied with what they initially bought.

Coach Inc. recognizes the importance of customer satisfaction, as a return customer is worth more than a new customer. Coach Inc. does not use durability as an excuse to be lenient with their design process, as the company also produces products that are not only aesthetically pleasing, but functional at the same time. With every Coach Inc. product that an individual purchase, they obtain value for their money in every aspect. As proof of durability, Coach Inc. products, for example, leather goods and handbags come with a 1-year warranty, and most other company simply does not offer this to their customers (Vevers, 2016).

In addition to the warranty policy that Coach offers for its handbags within the first year of purchase, customers can have their old handbags repaired at a small fee. Most customers welcome this idea from coach as it is a better alternative than spending hundreds of dollars when acquiring a new Coach handbag. Even though Coach Inc. products, specifically their handbags are categorized with the likes of Channel and Versace, in terms of quality and luxury, Coach still manages to offer their customers offers and discounts, and sell their products at a much lower price compared to their competitors.

Social Corporate Responsibility

Coach Inc. is an organization that recognizes the need to give back to the society, and through the Coach Foundation, it accomplishes this role. Up to date, Coach Inc. has given over 40 million dollars to charity organizations that serve a variety of purposes, for example, education of children, women’s health programs, disaster relief, and cultural programs in the United States. Another initiative taken up by Coach Inc. is the ‘Step Up’ program aimed at enabling the girl child in society. Through the ‘Step Up’ program, that is a non-profit organization in itself, Coach Inc. intends on investing in the next generation of women, by providing funding for various activities. Coach Inc. intends on donating a total of 3 million dollars towards the ‘Step Up’ program that is to help girls in urban communities that can be considered as under-resourced.

Coach Inc. Company Values

Coach Inc. has developed fundamental values which have integrated into every operation of the business, for example, the fusion of creativity and logic, nurturing of authenticity, integration of individuality and teamwork, and seeing possibility in the impossible (Beer, 2013). When it comes to individuality and teamwork, Coach Inc. encourages their employees to have personal initiative as well as welcoming diversity when it comes to perspectives. Coach Inc. also ensures that they have genuine, long-lasting relationships with customers and partners by maintaining accountability and staying true to the organization’s values. Also, Coach Inc. focuses on nurturing creativity, entrepreneurship, and achievement as the cornerstone of the company’s success.

Besides, Coach Inc. places a strong emphasis on the use of imagination and emotions in the process of progress, as well as the use of judgment to facilitate the integration of logic and instincts. Coach Inc. recognizes the need of learning from experience, as this ensures that the company capitalizes on what they considered a success, as well as examination of past failures to ensure mistakes are not repeated. Coach Inc. urges its employees to challenge any assumptions they might hold with optimism, at the same time embracing curiosity as the organization knows this is where innovative ideas are born.

Luxury and Inspiring Women

From the beginning, Coach Inc. fostered to be identified with luxury and therefore ensured that all the goods and accessories they produced were in line with this vision. Coach Inc. endures to become the company that defines modern global luxury, and the current goods and accessories they produce is a declaration of this fact (Vevers, 2016). Coach Inc. also identifies itself with the term ‘lifestyle’ as the company believes that the goods and accessories they produce are an intricate part of life in modern society, and they enhance the experience that individuals obtain when they decide to buy their products.

The Kate Spade brand, part of Coach Inc. aims at inspiring women through colorful living. Some of the products produced under the Kate Spade brand include shoes, handbags, eyewear, fragrances, beddings, and jewelry. The Kate Spade brand emphasizes on its need to introduce colorful designs into the world and ensures that all their products are in line with this philosophy. Also, Kate Spade fosters to encourage personal style, an aspect the brand refers to as colorful living (Vevers, 2016). Coach Inc. also tries to merge function and fashion through some of its brands, for example, Stuart Weitzman, that focuses on the production shoes and handbags. At the foundation of the Stuart Weitzman is comfort, without necessarily compromising on the aesthetic aspect of every design.

The most recent advertisements of Coach Inc.’s Edie handbags was a collaboration with an iconic America pop superstar known as Selena Gomez. The limited-edition collection gathered input from Selena Gomez to develop the ‘Coach X Selena Gomez’ brand which primarily focuses on women’s leather handbags. Other accessories under the ‘Coach X Selena Gomez’ brand include the Selena Mini skinny ID case and the Selena Star and Heart bag charms. Coach Inc. recognizes the need to be identified with the pop culture and therefore placed their current marketing strategy in that direction.

Coach, Inc. Mission Statement

Coach has been crafting luxury goods for over 75 years. Today, we are a leading global fashion house that remains true to our legacy in leather, while looking forward to the future with our vision of Modern Luxury.

What is Modern Luxury? It’s a concept—an approach to everything that we do—that is both grounded in our heritage and forward thinking. It’s the look and feel of our stores. The attitude in our bags, shoes, clothing and accessories. But it’s also the things that you don’t see, like the way we bring our stores and products to life, and our commitment to social and environmental responsibility. It’s our consciousness and our company culture—uniquely and authentically Coach.

Analysis of Coach, Inc. Mission statement

For many years, Coach, Inc. has been a leader in designer goods. These goods include shoes, bags, clothing, and accessories, just to name a few. Coach, Inc. has always had success while using leather materials, but that does not mean they will not consider using more modern or “in-style” materials. When a company such as Coach, Inc. is in a competitive business, they must do everything possible to remain ahead of the competition, and adding more products and styles is one way to stay on top. But it is not just the company’s goods that have to relate to the modern luxury. Coach, Inc. has to make sure their stores are also ahead of the competition and in line with “modern luxury.” You would not want to walk into a store to buy an expensive bag and the store be run down or not updated for many years. This could make the customer feel like the quality of merchandise they are buying is not as good as another high-end luxury store that is updated with “modern luxury.” When a store is well kept, it seems like people will stay and look around at the merchandise longer, and this could lead to increased sales. Another large factor is the stores commitment to social and environmental responsibilities. Many people do not like that stores buy and sell merchandise that contains real animal fur because they are heavily against killing animals just to make a purse or shoes or even clothing. So, if a store says they will not sell these kinds of materials and do not support killing animals for human use, more people may shop at that store because they have the same beliefs. The final factor is that the company needs to be unique. Uniqueness is what draws customers to a business. People like when companies go out and do their own thing, instead of following in the same path as other companies. If two or three other companies are selling the same merchandise but with just a little difference, why do the same thing? Go out and make your own design, and that is what Coach, Inc. does. That is why they have been so successful for over 75 years and why they will continue to be successful for many more years.

External Environment

The external environment are the factors outside the company that effect the firm’s everyday ability to function. Some of the factors are caused by the firm itself, other factors are controlled by completely different things. The three things that make up external environment include general environment, industry environment, and competitive environment.

General Environment

The general environment is made up of two key factors the opportunities and threats. Opportunities are a condition that the firm can take advantage of to make the firm have a strategic advantage over others. Threats are a general condition that may get in the way of a firm to achieve strategic advantage over other firms. Once these two factors are analyzed it will help the firm to develop better business strategies to build their market. The general environment also consists of five dimensions political, technological, social, economic, and legal. These are what a company measures its external environment on

The political dimension is about the government regulations and restrictions on the how coach and other companies are able to trade not only in the United States but in five continents. There are laws that target certain things such as imports and exports in certain industries. Coach must follow all of these laws and must operate ethically. These laws and rules may also benefit a company to do things others are not able to do. These laws help protect from unfair trade and are constantly updated for the greater good. When going overseas these laws get very difficult and the company must stay up to date on Coach has been successful in all these markets expanding its operations to five continents making sure they stay up to date on all rules and regulations.

The technological dimension has changed drastically causing an impact in all types of industries. The use of computers and the internet making everyday operations simpler. The internet provides coach with a way to get their products to people all over the world. These advanced technologies make it easier for companies to take in more business and inventory. With these machines and programs coach can keep track of all their inventory and money at the same time.

Coach is also effected by all the ways people have access to their products. People don’t need to go to the store anymore to get the products that they want. The internet and online shopping has turned retail and other items easier to get their hands on. With the younger generation always on the move they don’t have the time to go searching for the bag they want in the store. Coach has an exclusive online shopping platform where people can search infinite amount of products they are looking for without stepping foot in a store. This is why not only in the luxury accessories industry but all industries companies are focusing on faster ways to get their customers products. This is also a problem for the retail industry and many other product based companies. People don’t want to waste their time going to a store if they already know what they want. If people go to the store they are going to look at products that they are interested in. The internet hurts in store production because people will leave the store and compare pricing and will ultimately get a lower price or a knockoff product.

The social aspect deals with demographics, age, and culture trends. As technology is developing people are finding more ways to socialize and get their voice heard. Social media plays a big part in the way Coach gets their products out to the public. Coach has 7 million people that like their Facebook page. People follow this page to see new designs and promotions that coach may have. Coach runs its page based on month to month sales but does not post to much content. They repeat posts or images on people or celebrities wearing their products to put of an image that their brand is part of the cultural norm. Most of Coaches strategy is to just catch the eye of Facebook users and their links usually lead back to their main website. Coach has 673 thousand twitter followers, very much like Facebook they use the site to promote pictures and links to lead back to their website. Coach is way more active on twitter than any other because it is more mobile and people are always on their cell phones. Coach is also on Pinterest and Instagram using the same promotion methods as other social media.

Culture trends also have a huge impact on Coach when they are designing their product. Unpredictably culture trend shift often and companies like coach must do their best to stay on top of what people want. This is very difficult for the retailer to judge because there are all types of people in the world. Younger customers tend to buy products based on what’s in style because everyone wants to fit in. This is why when marketing Coach Uses bug name celebrities or models that are exceptionally good looking. The method they are using is putting an image in people’s minds of what it’s like to wear luxury goods making people want their product more.

The economic dimension affects the financial state of the company such as interest rates, unemployment and inflation. All of these aspects factor into the company mission and goals when figuring out future plans. The economy has a big influence on how business is going to go. When people are shopping for luxury goods you must have money to pay for them. So when the economy is down people are poorer and can’t afford coach products. In 2007 US had a huge economic recession which effected many companies. The unemployment rate peaked around 10% making it hard for people to afford everyday goods especially luxury goods. This recession from 2007 to 2009 led to huge cutbacks in consumer spending. Unemployment being so high makes it hard for people to buy brand name hand bags and coach has to figure out ways to get people to purchase their products.

The legal dimension focuses on the sole things a company must do to remain legal. There are laws in America that prohibit different sales or movement of products. These laws help to regulate the market to keep companies honest. There are laws for trade between states for example buying cheaper goods in one state and selling them in another. Also laws on international trade regulated by the World Trade Organization. This Organization organizes and monitors all trades from country to country. They make sure trade flows smoothly and freely as possible.

Industry Environment

The industry environment is to determine the level of competitive pressure your company is going to be exposed to now and in the future. Analyzes price competitiveness, industry competitors, and chance of new competitors. Coach Inc. is in the luxury accessories industry. A great way to analyze the industry environment and competition is the porter’s five forces analysis. The porters five forces tool is a way to analyze competition of business. The five forces are threat of new competitor, threat of substitution, bargaining power of suppliers, bargaining power of consumers, and competition between companies in the industry.

Porter’s five forces is used to find competitive advantages in a company’s industry. This strategy has become one of the most effective and popular and is highly recommended by many businesses. It is also used to find new products, services, and even businesses that will bring in more money and separate a firm from industry competitors. This method also looks at competitors to determine what they are doing to obtain an advantage over you.

Threat of new entry is when new competitors creates a product or service that affects your firm directly. It is very hard to enter into a large business industry and become an actual competitor. When more companies enter the industry it makes more competition and takes away from others market share. This means business revenue starts to fall because of less business. it is very important to have core competences to make sure people stay with your product for a reason. Companies in the competition need to make it very difficult for others to mock or make a better product. Coach having a well know brand has a very high advantage to new competitors. Since coach is such a large company it has competitive advantages such as capital, Brand loyalty, and high barriers. This all makes it hard for competitors to enter the market.

Rivalry between competing firms is and firm that threats business in the same industry. These are firms competing to be the top producer of the same type of industry. Coaches Inc. strongest current rivals are Ralph Lauren and Michael Kors. Coach use to be competing with Kate Spade who was a huge competitor. On May 8th 2017 Coach purchased Kate Spade for 2.4 billion dollars. This was a huge buy for coach because they can now combine forces and build a even bigger luxury goods empire. A competitor is someone who directly effects a firms business and their share of the market. Many small companies that take away business from coach and are operating very well. Coach needs to make sure that their brand stays at the top or common in their target market. Since coach has a high brand loyalty this helps fend off rising competitors when it comes to people being use to a certain product. Staying competitive and always coming up with new idea will keep coach on top of competitors and firms trying to grab business.

The treat of substitutes is the possibility that someone can buy or hire a service instead of yours. A substitute is something that offers the same or similar benefits to the customer effecting your firm. Threat of substitutes shape the competitive structure of a particular industry. There are many different ways something can be a substitute other than using another company. Coach has a line of wallets but men could choose to substitute a wallet with virtual credit card, making the need for wallets very small. Cost has a huge impact on what substitute’s people choose over others. Observing the costs and quality compared to others may have an impact much revenue you are making. Counterfeit substitutes have been a problem for coach for several years. This effects Coach because people are taking their brand and label and making the same products with very cheap materials. This takes away the authentic brand loyalty that they have because people don’t know what’s real or fake sometimes.

Bargaining power by suppliers is the ability to put a price on all the goods and services you provide. The supplier has the ability to reduce the price and quality of their products to compete with other firms. By raising prices companies open the door for substitutes and competition meaning loyal buyers will go somewhere else if they can afford or don’t want to pay more for a product. Lowering the quality of a product also makes consumers go to substitutes because a product is no longer reliable. Coach has a strong brand loyalty so when people see their product they know what they are purchasing. Coach has always wanted their products to be affordable and also have a high quality product.

Consumers buying power usually the consumers have large effect on pricing. When a company comes out with their pricing and quality they look at what the consumers want and what they are willing to buy. They need to make their prices and product quality so people will want to buy the product. Coach is a large company with retail stores all over the world. People cannot just go into a store and bargain a price because the store is a commercial retailer. The only bargaining power a consumer may have is if another store has the product for cheaper. This would not happen because most coach products are sold in only their stores. The only consumer problem is if someone just wants a cheap bag they can go buy one and not pay more for the coach quality bag.

Competitive Environment

The competitive environment is part of the external environment that analyzes the competitors in a certain industry. It has to do with what companies are fighting for the same consumers. First a company has to figure out who they are competing against to determine what their competitive advantages are. There are two criteria market commonality and resource similarity. Market commonality is the number of markets in which firms compete against each other and the degree of importance of the individual markets to each competitor.

Resource similarity is the extent to which the firm’s tangible and intangible resources are comparable to competitors in terms of both type and amount.

When looking at the market of coach competitors there are all different types. There are small competitors which are businesses that provide the same products or resources. These companies don’t have the brand loyalty and don’t effect the company very much. The direct competitors such as Michael Kors, Ralph Lauren, and other major luxury brands effect coach more directly. Indirect competitor doesn’t produce the same products but may fill similar needs that your company does. Coach does not have many indirect competitors because their product is material based. Women and men may choose not to carry hand bags or wallets because of

Opportunities

Weight

Ranking

Score

1. Increase in online sales

0.2

3

.06

2. International expansion plan

.1

4

.40

3. Leveraging marketing initiatives to target new customers

.15

2

.30

4. Developing new products (1)

.09

2

.18

5. Lower prices than competitors

.12

4

.48

Threats