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Handbag Industry Essay

1021 Words5 Pages

Article : Coach Earnings Fall on Weak North American Sales

Coach is one of America’s leading retailer of luxurious handbags, fragrances and fashion accessories which are offered to both women and men. Despite being an internationally well-known brand with an influence on the prices of their products, Coach Inc still falls under the monopolistic competition of market structures as there are many competitors within the handbag industry. Moreover, the competition within the handbag industry is non-price competition. It is based solely on quality, design, branding and service etc. Coach relies on premium leather which is of great quality and ultimately, consumers are willing to pay a high and premium price in search of products made out of the best and finest materials. …show more content…

Even though Coach utilizes the finest quality leather to produce their products, the addition of high priced handbags is to undo the damaging losses in earnings and shares and was not directly meant to satisfy consumers’ wants of lowest priced products. However, both consumers and producers objective are met in the context of technology innovation. Being an established global brand, technological change is very strong in demand. A good example is the utilisation of Coach’s website to initiate worldwide sales. Web development is a difficult task when it comes to considering elements such as language, culture and product lines while maintaining a website that is sophisticated. Furthermore, Coach needs a strong technology to establish quality control of its products. By investing in research and development to minimise defects and create new products, not only does Coach assure the best of qualities to their customers, they also justify their high premium prices based on knockoffs which is a major problem faced by all firms producing luxury

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