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Case Analysis -Coach

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by

Howard Chang

on 27 May 2014

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Transcript of Case Analysis -Coach

II. External Environment
B. Porter’s Five Forces Industry Environment
Introduction
WOW!
Founded in 1941, a leading U.S. designer and marketer of high-quality accessories
In 1985, the Cahns sold Coach to Sara Lee Corporation
Since 1990s, Coach credited as the affordable luxury brand
In 1999, Coach created its e-commerce at http://www.coach.com/
In 2000, Sara Lee filed to spin off Coach, Inc. to the public through an IPO
#1 position within US premium handbag market
#2 position in Japanese imported luxury market
Manufactured by independent manufacturers in China, Hong Kong, Philippines, Vietnam, South Korea, and India
COACH
For your attention and listening
Thanks
Reference
Q & A
Case Analysis - COACH, INC.
Instructor: Dr. Ann McFadyen
Member:
Ou, Ching-Pei (Jing)
Wang, Kelong (Soter)
Shen, Hua (Katrina)
Ho, Yi-Hsuan (Amber)
Chang, Chia Hao (Howard)

A. General Environment (O/T)
C. Overview of All O/T
Political / Legal :
the legal fight against trademark infringement
Economic :
unemployment rate and economic recession
Demographic :
a population of 1.3 billion people of China representing a $3.2 billion opportunity
Physical environment :
the severe winter weather, like snow storm in winter
Technology :
3D print and invest in technologies to prevent counterfeiting such as holograms, smart cards, biometric markers and inks
Environment :
Expands its global footprint we rely on our Global Operating Principles
1. Standard & Poor's NetAdvantage. (2014). Coach Inc.: Public company profile. Retrieved May 19, 2014, from Standard & Poor's NetAdvantage database.
2. COACH BAGS: MAKE IT, DON’T FAKE IT. (2011, August 31). In made in usa challenge. Retrieved from http://madeinusachallenge.com/2011/coach-make-it-dont-fake-it/
3. Sustainability Report. (2013). Coach Inc.: Company report. Retrieved from http://www.coach.com/
1
MISSION STATEMENT of Coach Inc.:
"Coach seeks to be the leading brand of quality lifestyle accessories offering classic, modern American styling."
Number of employees worldwide: 18,366
Net Sales: $5.08 billion
Net income: $1.03 billion
Direct channels (1016 stores, 89% of sales)
Indirect channels (11% of sales)
(by June, 2013)
Key Number :
Sales of Coach Inc.
4. MISSION STATEMENT. Coach Inc. Retrieved from http://www.coach.com/
5. Sustainability Report. (2013). Coach Inc.: Company report. Retrieved from http://www.coach.com/
Reference
4
5
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3
Opportunity:
1. Increasing Globalization
2. A population of 1.3 billion people of China representing about a $3.2 billion opportunity
3. Expands its global footprint we rely on our Global Operating Principles

Threat :
A. Internal Analysis - Value Chain Analysis
- Fit
- Core competence
Modular organizational structure
Allocate more resources on its expertise: marketing and designing
Ability to enhance & maintain customers’ emotional connection with its brand
Expand & select highly productive retail and factory locations
Expand partnership Simon Property Group
Coach as a brand depends on its strong name and customer service serves as a key way of strengthening the brand, so it is important to have those activities across the value chain.
- Competitive advantage
Brand Image
Affordable luxury
Product Lines & Expansion
- Business Level
- Corporate level
- Differentiation
- Licensing
B. Overview of S/W
1. Brand image
- Superior quality leather
- Unique and innovative styling
2. Excellent customer service
3. Strong distribution channels capabilities
4. Diverse product line.
1. High-cost inventory
2. Geographical concentration in particular areas
3. Factory outlet stores outperforming full price stores
4. Less number of men products
IV. SWOT
V. Evaluate Viable Strategic Alternatives
1. Take strategic acquisition

2. Combat the privacy problem is to continuously update products and product lines and to add more distinguishable features that are hard to replicate and will make consumers recognize a fake

3. Employ a few unique nonmonetary incentives to motivate individuals and teams rather than always relying on monetary incentives
Strength
Weakness
1. Brand image
- Superior quality leather
- Unique and innovative styling
2. Excellent customer service
3. Strong distribution channels capabilities
4. Diverse product line

Strength
Weakness
1. High-cost inventory
2. Geographical concentration in particular areas
3. Factory outlet stores outperforming full price stores
4. Less number of men products
1. Increasing Globalization
2. A population of 1.3 billion people of China representing about a $3.2 billion opportunity
3. Expands its global footprint we rely on our Global Operating Principles
Opportunity:

1. Counterfeit goods declines the sale of original and
high priced
2. Unemployment rate and economic recession
3. The severe winter weather, like snow storm in winter
4. Buyer propensity to substitute
5. Coach’s competitors including Michael Kors (1981),
Kate Spade (1993).
Threat
Coach Company used strong market research technique under leadership of executive creative director Reed Krakoff which was the basis development of differentiated product line. Coach decided to launch new and fresh arrival every month. Initially there were two-three new arrivals every month.
Coach entered into licensing agreement with the Movado Group in 1998 to make coach watches available in retail store and with Jimlar Corporation in following year for the manufacturing and marketing Coach branded ladies footwear. Similar to aforementioned companies, Marchon eyewear became a licensee for Coach branded eyewear and sunglasses in year 2003.
III. Internal Environment (S/W)
1. Counterfeit goods declines the sale of original and high priced
2. Unemployment rate and economic recession
3. The severe winter weather, like snow storm in winter
4. Buyer propensity to substitute
5. Coach’s competitors including Michael Kors (1981), Kate Spade (1993).
Acquire Michael Kors privately
Firm Infrastructure
Well-established distribution and channels around the world
Efficient inventory control
Human Resource Management
Technology Development
Procurement
Inbound
Logistics
Operations
Outbound
Logistics
Marketing & Sales
Service
Identify peer mentors for new hires to help in their transition to Coach and their new roles.
Establish mentoring programs to provide employees with professional development support.
Attract one of the world’s top designer, Atuart Vevers
Utilize its website to generate sales worldwide
Assure quality to their customers by maintaining and continuously investing in technology in order to innovate products and minimize defects
Regionalize the sourcing of our material production, which has reduced the transportation of materials to our manufacturing service providers. In fiscal 2013, roughly two-thirds of our finished leather was tanned in Asia compared to just over half in fiscal 2010.
Coach nevertheless maintain certain control over the supply chain process from design through manufacture, including raw material selection, ex Leather
, Fabric-Shell
Fabric-Lining
and Hardware

All of Coach products are manufactured by independent manufacturers, outsourcing in China, Hong Kong, Philippines, Vietnam, South Korea, and India.

Start shipping direct from our manufacturing service providers to in-country distribution hubs, eliminating another transportation leg

Fresh collection attracted many consumers and integration of channels of distribution used by the company such as full price store, factory outlets, internet and catalogs are the major strength of the company indicating greater sales.

Establish long-term relationships through
customer representative services and high satisfaction
with
customers.
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