Stratagic Management K32: Coach Inc - a Leather Goods Company

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Case #4: Coach Inc. in 2012: Its strategy in the “Accessible” Luxury Goods Market

Presented to:

Sir Alfred Cabuang

In Partial Fulfillment of the Requirements for

STRATEGIC MANAGEMENT K32

Term 1 AY 2015 - 2016

Submitted by:

Aboy, Adrianne Janine

San Juan, Czarina Bianca

Background:

        Coach, Inc. is an upscale American leather goods company known for women’s and men’s handbags, luggage, briefcases and other accessories.

The company’s strategy  to increase global distribution and improve same-store sales productivity focused on 5 key initiatives:

• Build market share in North America (open 15 new full price &25 factory outlets)
• Build market share in Japan (open 15 new locations)
• Raise brand awareness and build market share in unpderpenetrated markets such as in Europe, South America and Asia
• Increase sales of products targeted toward men.
• Raise brand awareness and build market share through coach.com, global e-commerce sites and social networking initiatives

It was founded in 1941 in New York by Miles Cahn, a leather artisan. Over the next 30 to 40 years, Coach was able to grow at a steady rate by setting prices 50% lower than the others, adding new models and establishing accounts with retailers such as Bloomingdales and Saks Fifth Avenue. In 1985, Coach was sold to Sara Lee with intact operations and with the decline 10 years later, Sara Lee, in 1996, made Lew Frankfort head of the handbag division. He then hired Reed Krakoff who conducted focus group discussions and surveys on the preference of consumers for the designing of the handbags. The plan also included the redesign of the company’s flagship stores to complement Coach’s new designs.

        From 2001-2011, Coach has generated activities to result to taking control over the brand in Asian markets and it also accelerated its European expansion with the help of its European joint venture partner in 2011. It is evident that continuous innovation and affordable pricing are what sets this apart from other luxury goods. In addition to that, Coach’s financial results and stock price proved to be stellar. $555 million annual sales in 1999 to over $4.2 billion in 2012. Today, Coach has distribution, product development and quality control operations in the US, France, Italy, Japan, Hong Kong, China and South Korea.