Coach Executive Summary

The bargaining power of the suppliers in the luxury industry is moderate. Even though these companies have economies of scale emanating from their global operations, most of them use the focused differentiation strategy on the basis of quality. This gives their suppliers some leverage over them because finding suppliers of premium materials in the quantities which these companies procure is not easy. Noteworthy, these companies must consider the time they spend in building their relationships with their suppliers.

The bargaining power of the buyers is also moderate. Because of the high barriers to entry, there are relatively few luxury brands for the buyers to choose from. It is a logical inference that the buyers of accessible luxury products

Right now, the company applies this strategy to two income-based segments in addition to the newly targeted segment of men. Now that the traditional and haute couture competitors are intruding on the accessible luxury segment, the only way Coach can beat them without losing its luxury identity is by increasing the number of its segments through broad differentiation by increasing its number of target segments. However, this will require some cooperation from the research and development department, the marketing department, and the finance department. The marketing department can identify some gaps within the market, and also identify their demand and their collective customer lifetime value. After this, the R&D department can find ways through which to improve the company’s products in order to increase the unique selling proposition of these products to the customer. The role of the finance department would be to procure the required funding, through debt, equity, or retained

By finding new markets for its existing products, Coach can restore its revenue performance because it will have increased its market volume. The company can achieve this bit utilizing the opportunity of the emerging markets. However, Coach should not focus too much on China because it is becoming a very concentrated red ocean market because of the rapid inflow of foreign direct investment.

As mentioned prior, Coach can also pursue innovation in order to become more adaptive to the volatility of the market conditions (Cassiman & Vuegelers 73). Innovation would be of great use to Coach now that its industry is becoming saturated courtesy of the traditional and haute couture luxury fashion brands. Innovation would have enabled the company to come up with a value proposition which neutralizes the competitive advantage which emanates from the brand equity of the aforementioned brands.

Risk benefit