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SWOT ANALYSIS OF COACH.INC

by Abhijeet S on Wednesday 24 November 2010, 1:25 PM | Category: Operations| View: 13587 views
 
 
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SWOT ANALYSIS OF COACH.INC

 

 Coach, Inc. is an American leather goods company known for ladies' and men's handbags, as well as items such as luggage, briefcases, wallets and other accessories (belts, shoes, scarves, umbrellas, sunglasses, key chains, etc.). Coach also offers watches and footwear.

Coach, Inc. is a designer, producer, and marketer of a prestige line of handbags, briefcases, luggage, and accessories. The company made its reputation selling sturdy leather purses in unchanging, traditional, classic styles, and it remains one of the best-known leather brands in the United States and has a growing reputation overseas.

In addition to its main product line, the company offers Coach brand watches, footwear, and home and office furniture through agreements with licensing partners. Nearly two-thirds of company sales are derived from direct-to-consumer channels.

These include about 190 Coach stores in the United States--of these, approximately 120 are retail stores and the remainder are factory outlets--direct mail catalogs, and an online store. There are also 175 Coach locations outside the United States, in 18 countries.

The company's indirect channels include the wholesaling of Coach brand products to approximately 1,400 department and specialty store locations in the United States. Formed in 1941, Coach was family owned and operated until 1985, when Sara Lee Corporation purchased the firm. Coach remained a subsidiary of Sara Lee until 2001, when the firm regained its independence via a spinoff.

 

SWOT ANALYSIS OF COACH.INC

 

Strengths:

  • Strong brand equity
  • Strong financial performance
  • Aspirational brands outperform the market in tough economic environment
  • Multi-channel retail network
  • Matching key luxury rivals on high quality leather and innovative styling
  • Beating competitors price by 50% or more
  • High level of customer service
  • Monthly introductions of fresh new handbag designs
  • Strategic alliances to bring Coach brand of handbags into luxury categories such as: watches, footwear, glasses, fragrances outerwear, and mens
  • Outsourcing to cut cost and maintain low price
  • Channels of retail distribution from full-priced store, factory outlet, internet and catalogs

 

Weakness:

  • High level of inventor
  • Geographic concentration
  • Products generally inaccessible to most consumer segments (BCDE)
  • Factory outlet stores outperforming full-priced store
  • Diluting brand with increased growth of factory outlet stores
  • Men's accessories only account for 2% of sales
  • Outerwear only accounting for 2% of sales
  • Luggage only accounting for 1% of sales

 

Opportunity:

  • New store openings
  • Product expansion
  • Growing demand of luxury goods in emerging global markets, such as China and India
  • Increased wealth of consumers in global markets of Asia, Middle East, Australia, and Mexico 

 

Threats:

  • Strong competition
  • Counterfeit goods
  • Slowdown in consumer spending
  • Fashion trend changes
  • French and Italian designer brands such as Gucci, Prada, Louis Vuitton, Dolce & Gabanna, and Ferragamo
  • Brand diffusion: Manufactures of the finest luxury goods launching diffusion lines to exploit middle-income consumers. For example, Dolce & Gabanna launching “D&G”, a sub brand sold at modest price points.
  • Counterfeiting of luxury merchandise, totaling $500 billion worth of goods sold in countries throughout the world in 2006.

 

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