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What kind of management strategies did Coach Inc
Coach, Inc. (Coach) is a designer and marketer of handbags and accessories. The Company offers luxury lifestyle accessories to the customers and provides consumers with fresh and relevant products. Coach's handbags and accessories use a range of quality fabrics and materials. Coach's primary product offerings include handbags, women's and men's accessories, footwear, outerwear, business cases, sunwear, watches, travel bags, jewelry and fragrance. It operates in two business segments: DirecttoConsumer and Indirect. Handbag sales accounted for approximately 64% of net sales during the fiscal year ended June 30, 2007 (fiscal 2007). Accessories sales accounted for 28% of net sales during fiscal 2007.
Business and Management Review
The company has been creating high quality leather goods for over half a century. Over the years the company has added to its product line but has never strayed from its original strategy of creating outstanding leather products for the consumer.
3) Does the business have favorable long term prospects,[url=http://nikefree.mobilejeti.com]nike free tilbud[/url]?
The luxury goods market is favorable longterm as people will continually be looking to purchase status related products. However, the company could potentially see some business cycle related issues whenever consumer discretionary spending drops. That said, it could be also expected that the higher end of consumers may not be as adversely affected by swings in the business cycle leading the effect on Coach to be negligible.
Coach Inc.: Is Its Advantage in Luxury Handbags Sustainable? Founded in 1941 by Miles Cahn, a leather artisan, who began producing women's handbags; simple in style and resilient to wear and tear.
Even after 40 years of business, coach was able to grow at a steady rate by setting prices about 50% lower than most luxurious handbags, adding new models and establishing accounts with retailers such as Bloomingdale's and Saks Fifth Avenue.
After 44 years of family management, Coach was then sold to Sara Lee, a diversified food and consumer goods producer (acquisition strategy).
Sara Lee left Coach's strategy and operations intact but by 1990's the company performance began to decline as consumer shifted preference to a more stylish French and Italian handbags such as Gucci, Prada, Louis Vuitton, etc.
In 1996, there was a change in the management having Reed Krakoff as the new creative director, an ex Tommy Hilfiger designer. He believed that new products should be based on market research rather than on designer's instincts about what would sell.
Coach then conducted excessive research and held focus groups to ask customers about styling, comfort, and functionality preferences. They found that customers look for edgier styling, softer leathers, and leathertrimmed fabric handbags. These prototypes were tested in selected coach stores for 6 months before announcing the launch. This process allowed coach to launch a new collection every month instead of "2 per year" launch prior to Krakoff's arrival, making it adopting an offensive strategy to improve its market standing or result in a competitive edge fairly quickly.