Luxury Goods Industry Case Study

Q3. Like stated above, the competitive forces that were evident in the luxury goods industry are the competitiveness of rivals such as Gucci, Prada, Ferragamo and Dolce and Gabbana, to mention a few, the aggressiveness of substitutes to luxury goods who were catering to the many other customers who did not have enough income to purchase the high priced luxury goods, the threats of new entrants into the luxury goods market, not forgetting the bargaining power of both buyers and suppliers in the luxury goods industry.

In the mid-1990’s consumer preferences began to change and veered strongly towards Coach’s rivals within the luxury goods industry such as Dolce and Gabbana, Versace, Ferragamo, Gucci and Prada among others. These well-known and loved Italian and French

Although there were emerging markets for luxury goods across the globe, majority of income earners could not afford the premium price tags of these luxury goods. In view of this, substitutes seemed to be the bet for most people. Since luxury goods are not necessities but rather possessions meant to indulge the desires and internal need for prestige of buyers, many people who could not afford the premium prices deemed it better opting for substitutes. In addition to the buyer preference of the majority, substitutes were in abundance and readily available to all for all categories of luxury

Although it shows that there is much profitability and market share, it also shows that entry barriers are very high and difficult to penetrate making the luxury goods industry quite unattractive to enter.
Q4.Competitive weapons of