INTRODUCTION
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, among these, approximately 120 are retail stores and the remainder are factory outlets,
However, a few quarters of lousy product offerings or poor quality products can drive down the brand equity that Coach has created and alternative brands could benefit which would cause problems for the company.
The second substitute product that could cause a problem for Coach is counterfeit products. Coach works very hard to minimize the amount of counterfeits in the market place by prosecuting individuals that make the products and they also provide an online form so customers can report counterfeits if they are found. These products are usually of poor quality and are manufactured in a way that violates decent labour standards such as child labour. Coach is very adamant about stopping counterfeiting because they can reduce sales and brand equity that in turn are detrimental to the company.
4. Threat of Buyers
The effect of Coach’s customers bargaining power on the company is relatively low. Their price sensitivity is low due to the fact that their customers buy specifically their products because of the brand image that Coach possesses, the quality of the products and the popular styling of the products. This has been proven to be true in the past because of Coach’s ability to increase sales and customer base while raising prices at the same time; something that hardly any of their competitors have been able to accomplish. Coach’s customers also have a low relative bargaining power because they