business strategy

SWOT Matrix

Strengths: Extensive business experience for over 70 years Strong ability to produce luxury goods Performance against competitors High quality products	Weaknesses: Little selection for men Hasn’t fully expanded in other countries New products start at full price Poor promotion of new products Online Store Very Weak
Opportunities: Expanding the company to other countries Attracting new customers based on lower prices, compared to competitors Increasing online sales Expand sales and company with merger/Acquisition	Threats: Strong competition from competitors Counterfeit products being sold cheaper Changes in fashion trends Economic downturn in US

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix is a tool manager used to determine the different types of strategies the company can pursue. These strategies include:

1. SO (strengths-opportunities)

1. WO (weaknesses-opportunities)

1. ST (strengths-threats)

1. WT (weaknesses-threats)

 Each strategy combines internal and external factors to allow management to make the best decisions for the firm to take.

SO Strategies

1. The company has had extensive business experience for over 70 years (strength) and could expand the company to other countries (opportunity).

1. Coach, Inc. has been a very successful business for over 70 years, while selling high-end luxury goods at very reasonable prices. But most of this success has come from sales in the US, Canada, and Japan. If Coach, Inc. would expand to other countries, besides the previous countries listed, their company’s sales could soar and bring more success to the company.

1. The company has a strong ability to produce luxury goods (strength) and has the potential for increased sales with new products (opportunity).

1. Since the first day the Coach, Inc. corporation started, they have been a luxury goods store. While their stores have been successful with the goods they currently sell, there is always room for improvement. The company could add new designs or new goods to improve sales.

WO Strategies

1. The company has little selection for men (weakness) and has the potential for increased sales with new products (opportunity).

1. Coach, Inc., at one point, tried to expand their company by introducing new goods aimed at men. But this was many years ago and society has changed. By reintroducing goods aimed at the male community, the company has a chance to be successful. Though this seems like a good way to help the company succeed, it could also hurt the company. Since the expansion failed before, there is always the risk that the company would be unsuccessful again.

1. New products start at full price (weakness) and the company could attract new customers based on lower prices, compared to competitors (opportunity).

3. One of the biggest weaknesses of Coach, Inc., along with other companies, is that whenever the company introduces a new product, the product is always priced high. Sometimes, the price is higher than it should be, and it hurts the sale of the product. A way to improve this problem is to price new products slightly below retail price. This could be a way to attract new customers, knowing that when a new product is released, it will be priced lower than retail value.

ST Strategies

1. High quality products (strengths) and counterfeit products being sold cheaper (threat).

4. If there is one thing that everyone knows about Coach, Inc., it is that they have always sold high quality products. This is what has made the company so successful and what will make the company successful in the future. But problems come up with companies that sell high quality goods. One of the biggest problems is that people will always try to make some money by selling counterfeit products cheaper than the company sells them. These products look identical to the real products, but have some flaw that is hard to see with the naked eye. Then the seller of these counterfeit items sells the items for much cheaper than the company sells their real items.

1. Strong ability to produce luxury goods (strength) and economic downturn in US (threat).

5. Coach, Inc. has always had the ability to successfully produce luxury goods, though their luxury goods vary from other company’s luxury goods. Coach, Inc. produces luxury goods that are reasonably priced for middle class families. Even with the goods not carrying an extremely high price tag, a downturn in the economy could seriously hurt Coach, Inc. People could start looking for products that are priced lower, as a way to save money for more important things, such as food, living, etc.

WT Strategies

1. Little selection for men (weakness) and strong competition from competitors (threat).

0. Coach, Inc. has always been a company that mainly focuses on women. They were unsuccessful when they attempted to expand their company to include goods for men. This caused them to quickly switch their focus back to strictly making goods for women. The problem with this is that majority of their competitors focus their company on selling goods for both men and women. This is one of the biggest threats to the company. Coach, Inc. is losing a lot of sales to its competitors just based on the fact that they do not include men in their business strategy.

1. The company hasn’t fully expanded in other countries (weakness) and economic downturn in US (threat).

1. Coach, Inc. has been successful in expanding to Canada and Japan, but other than that, the company has not expanded. To become a more successful company, they need to improve on expanding to other countries. Not just any country just to say the company has expanded, countries where they know they can have success. Countries that have had previous success with expansions from successful, Luxury companies. The US has had multiple economic downturns. This is one reason to improve the company’s expansion plan. If the US economy takes another serious hit, the company could avoid serious damage by having many businesses in multiple other countries.

SPACE Matrix

The Strategic Position and Action Evaluation (SPACE) Matrix is a tool used in the matching stage to help a firm decide what type of strategy to implement. Taking both external and internal facts, the SPACE matrix determines what direction the company should be moving in. The axes on the SPACE matrix are determined by internal factors, including the financial and competitive positions of the firm and the external factors, including the firm’s stability and industry positions. This matrix guides a company through the decision-making process by comparing the company’s current positions to possible strategies that will help maintain/increase competitive advantage.

Internal Strategic Position		External Strategic Position
Financial Position (FP)		Stability Position (SP)
Return on Assets		Technological Changes
Leverage		Demand Variability
Liquidity		Price Range of Competing Products
Working Capital		Barriers to Entry
Cash Flow		Price Elasticity of Demand
Inventory Turnover		Ease of Exit from the Market
Average		Average
Total Average for y-axis
Competitive Position (CP)		Industry Position (IP)
Product Quality		Growth Potential
Product Life Cycle		Profit Potential
Customer Loyalty		Financial Stability
Technological Know-How		Resource Utilization
Control Over Suppliers and Distributors		Ease of Entry into Market
Market Share		Productivity
Average		Average
Total Average for x-axis

To complete the SPACE Matrix, the averages of each strategic position was determined and assigned a rating. The competitive and stability positions were rated on a scale from -1 to -7, where negative one was the best rating and negative 7 was the worst rating. The industry and financial positions were rated on a scale ranging from 1 to 7, where 7 was the best score.

BCG MATRIX

The BCG matrix also known as the Boston Consulting Group Matrix is used to evaluate types of divisions inside a firm. The matrix helps to compare with other companies or competitors to see where one’s firm stands in the market. This helps to configure strategies to to enhance a firm in divisions that may be weak or strong.

Coaches has four different divisions of their company that are part of a worldwide market. These divisions are Female accessories, Male accessories, Handbags and also other items such as luggage bags and work cases. Female accessories include all things a female would buy coach has all kinds of styles and accessories. Clothes, Belts, Wallets are all included in this market. Male accessories are all things that would be considered just for men. Hand Bags are the main accessories of coach and are made for male and females. Then there is all other things coach sells like luggage bags, office supplies, and misc. items.

When looking at a BCG matrix each quadrant represents a different strategy and gives the viewer an easier approach to their strategy. Quadrant one represents the question mark state of a firm. In the question mark quadrant represents a low relative market but has the opportunities to be a part of a high competing market. Quadrant two is the star approach the quadrant is an example of the companies best long term opportunity for growth. The star quadrant has a high market growth along with a high market share. Quadrant three is the cash cow of the current company outlook. The cash cow has a high market share and a low market share. The last quadrant is the Dog this quadrant has a low market share and also a low market growth. As you can see in the BCG where all four of our categories fall for Coach Inc.

Men’s Accessories

Men’s accessories landed in the first quadrant or the question mark. The men’s accessories as you can see in the chart has gone from low to high but has never been steady. Coach is trying to figure out ways to make the men’s department better. This quadrant is for the part of the firm that has low market share but going against a high growth market or industry. Landing in this part of the BCG means you have to go back to the drawing board to figure out new strategies to strengthen this category. Strategies such as product development and horizontal integration can help to gain a better share of the market. Coach can use many strategies to get their Men’s department stronger while also increasing revenues. Competitive advantage is not only important for one department but it can affect the success all over the company.

Women’s Accessories

Woman’s accessories landed in the star quadrant of the BCG matrix for Coach. The star means that woman’s accessories have a high market share and a high market growth. The women’s Accessories stays at a steady rate in the chart and makes helps attract females to buy other things such as handbags. This means Coach has multiple strategies they could implement to make a good part of their firm even better. Having both high market growth and high market share means Coach can implement things such as horizontal integration, forward integration even market penetration to make their women’s accessories even better. Being in the star means you also have a high competitive advantage with other companies and can take risks to get even better making this one of the most important quadrants.

Custom Handbags

Coaches custom handbags fell into the cash cow quadrant of the BCG matrix. The cash cow is the high market share but low market growth. In the past four years handbags have been 58% of Coaches sales this is why they are the most important product. Handbags are Coaches main product that they are known for. They are a big part of a huge market for hand bags. With coach being one of the best producers and cash cows in custom handbags they provide a steady income to the company to produce and sell other goods to make more overall revenues. In this quadrant though Coach must use several different strategies to keep revenue coming into the company. Things such as merger with other companies or expanding its ecommerce market. These things will keep Coach’s handbags at the same level they are to make it possible to produce more male accessories, female accessories and also any other market they would need more money to develop.

Luggage Bags and other Misc. items

Luggage bags and other Misc. items are in the dog quadrant of the BCG matrix. These are things that Coach has a low market share and a low market growth. As you can see in the table other items are not doing very well but coach will try to promote their other items to have more of a variety. Coach has been trying to promote and make these items become more popular but did not work out. Having categories such as handbags and women’s accessories makes having failing categories like this not work out. The dog quadrant needs more attention on strategic opportunities to make a company successful in that area. That is why there is always room to make positive adjustments to this area. Strategies such as improving their ecommerce sales and forward integration will help this area.

Decision Stage

After evaluation of the SWOT Matrix, SPACE Matrix, and BCG coming up with a list of strategies that Coach could use. When looking at each matrix one could tell what areas of the company need reevaluation. Picking two strategies to make sure they are the best ones to help gain a better competitive advantage over Coaches competitors. The two best strategies they could use are horizontal integration and acquisitions/merger. Coach needs to expand their products to the ecommerce market by adding additional online options and making sure people can have access to their quality product from anywhere. Strategy two would be expanding or merging with another top end luxury company that has experience in other areas Coach can improve in.

The strategy we chose is to expand and merger with another top luxury company by horizontally integrating. This is going to help develop and improve many areas of coach. By merging with another company Coach will absorb all of their strategies and ways they were successful to make both sides successful. This move will cover key weaknesses that Coach is suffering from right now.

As you can see in the SWOT Matrix in the weaknesses and threats there is multiple things that can be improved. Little selection for men has been a large problem for coach and is not showing signs of getting better looking at the product sales. The online store for Coach is very uncompetitive this makes it harder for people to see what they want even if they plan to buy in person. When merging with another company you have to look for areas you are already weak in to make sure the merger is a fit. If the company has a market for their men’s clothing it could really help to make coaches product development and brand loyalty would increase to make the weakness and revenues go up. When merging with another company you are also not competing with them anymore so you can drop prices. Dropping prices will help to generate more business because competitors are now competing with your price. With Coaches very weak online market a merger with a company could also help to make that better. Any merger Coach wants to do would have to be with someone who has a strong online presence. This could also help to lower prices and enter markets they are not currently in. Coach men’s accessories would get better and also their revenues would go up with a better way for consumers to access their special products that stores may not be able to keep in stock. Today’s society is internet based and focusing more on ecommerce sales would really jolt Coaches reputation. In store sales are getting to become outdated because people are always on the move online innovation is very important is Coach wants people to see more of their products.

QSPM

	Strategy 1- Focus on online market			Strategy 2- Expand company operations/Acquisitions
Key internal Factors	Weight	AS	TAS	Weight	AS	TAS
Strengths
Strong management team	.15	4	.6	.15	3	.45
Larger range of luxury goods	.05	2	.3	.05	2	.1
Brand Name recognition	.05	2	.3	.05	1	.05
Strong advertising	.1	3	.3	.1	2	.2
Weaknesses
Higher prices then competition	.1	2	.2	.1	1	.1
Little selection for men	.25	3	.75	.25	4	1
Expand to other countries	.25	3	.75	.25	2	.5
Promotion of new products	.05	2	.1	.05	1	.05
	1.00			1.00
Key External Factors
Opportunities
Expand globally	.2	2	.4	.2	1	.2
New Product innovation	.25	3	.75	.25	2	.5
Lower price opportunities	.05	1	.05	.05	2	.1
Increase online sales	.1	3	.3	.1	1	.1
Threats
Strong Competition	.1	1	.1	.1	2	.2
Counterfeit Products	.2	2	.4	.2	3	.6
Bad Economy	.05	1	.05	.05	1	.05
Fashion Trends Changing	.05	1	.05	.05	1	.05
TOTAL SUM	1.00		5.4		1.00	4.1

https://retail-index.emarketer.com/company/data/5374f24d4d4afd2bb4446607/5374f31e4d4afd2bb444c1f2/lfy/false/coach-by-product-category