Case Study Of Coach Inc.: Is Its Advantage In Luxury Handbags

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Coach Inc.: Is Its Advantage in Luxury Handbags Sustainable? Competitive Strategy COHORT A , GROUP 7 QUESTION 1 Characteristics of the luxury goods industry Under this section, we deliberate on the common characteristics underpinning the luxury goods industry. These characteristics have been categorised into three subheadings. They are as follows; market segment & size, Market Players and Counterfeiting, which is a common characteristic of the market. Market Segment & size One characteristic according to the case was that the luxury industry targets a market segment of high income earners who do not compromise on style, uniqueness and quality. The case described high income earners as those with income levels ranging from $300,000 and above. This market segment can be found in developed countries such as Europe and United State, which by estimation worth over $105 billion in 2005 and was expected to grow at 7% to reach $112 billion in the following year. However, firms in the luxury goods market are spreading their tentacles to other countries from emerging markets such as India and China. They are able to capture this market using the affordable luxury goods strategy. For example while D&G dresses might sell at price points between $1000 to $1500, similar appearing dresses under the firm’s affordable luxury brands were priced at $400 - $600. This strategy works well in the emerging market because majority of the population are middle income earners. Even though the

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