Porter's Five Forces Analysis on Coach, Inc.

Porter's Five Forces Analysis on Coach, Inc.

Introduction:

In 1941 was when Coach was first established as a small family run leather goods manufacturing business. Coach was seen as a premium brand that had superior leather goods. In 1980 Coach opened its retail store. In 1985 when Coach was sold to Sara Lee and experienced rapid expansion the company started to include accessories, luggage, and brief cases. When Karloff joined Coach he thought that by having a luxury market he thought this would be a good source of competitive advantage in the luxury market.

Today Coach is "known for one of the leading American marketers of luxury accessories in the U.S. and international market." (Trefis Team, 2013) The products that are by Coach include purses, footwear, jewelry, travel bags, fragrance, wallets, and business cases to name the few.

In this reading information will be discussed on where Coach, Inc. needs to gain or lose access by using the Porter Five Force (Porter, 2008)Analysis. (Trefis Team, 2013) Porter Five Forces include the following forces that shape industry competition that will be discussed:

• New Entrants

• Competitive Rivalry

• Bargaining Power of Buyers

• Bargaining Power of Suppliers

• Threat of Substitute Products or Services. (Porter, 2008)

New Market Entrants

The threats of New Market Entrants were at a medium intensity. A company like Coach has a distinct advantage because of its " affordable luxury", higher prices, but most importantly the brand image that attract the medium to high class income. (Trefis Team, 2013) These consumers tend to stay with what product they know and trust. The market strategy that Coach has also helps from new entrants such as marketing for the more mature core consumers and not marketing for the young consumers. This is done deliberately to avoid losing the old consumers from the young trend. (Trefis Team, 2013)

Competitive Rivalry

As of September 13, 2013 the highest intensity that Coach had and was the most threat was the Competitive Rivalry Within The Industry and occupied 28 % of the handbag market share in the U.S. The industry players that compete with Coach are Louis Vuitton, Gucci, Longchamp, Vera Bradley, Fossil, Chanel, Guess, Marc Jacobs, Juicy Couture, etc. "The fashion companies that is the most threat to Coach, Inc. are Michael Kors, Tory Burch, and Kate Spade which had a sales growth of 64.5%, 55.1%, and 47.6% which Coach only had a 6.6% growth." (Trefis Team, 2013) Coach believes to