Key success factors for makers of ladies’ handbags and leather accessories.
The company needs to consider the needs of this particular market segment.
Women are people who are known to be sensitive about the quality of products they purchase. Therefore the first success factor concerns quality products. Maintaining the required quality standards is critical towards increasing the market base. The customer’s satisfaction index would also matter in the success of the company. If customers are achieving satisfaction in handbags and other accessories they would demonstrate loyalty and help the company achieve its marketing and sales targets.
Product innovation has been a very critical factor driving success in Coach. This is because as consumers express their reluctance to purchase innovation finds its way through and most of them get into buying.
The choice of brand is another key success factor in the industry. Consumers are quite often sensitive to specific brands of handbags like the new tote style that has become the best seller in the market. Brands contribute significantly towards attaining the desired market goals in the industry. Brand awareness is a matter that is given the necessary attention in the company. This applies even to the new markets hence helping to promote sales the manifest success in the industry.
The merchandising strategies also play an important role in determining success in the market. This has to do with product density in certain areas in the market.
The distribution channels of the company. This ensures the availability of products according to consumer demands. With distribution channels that are efficient and satisfy the customer needs, success becomes so easy to achieve in this industry.
The competitive strategy of Coach inc. has mainly focused on the product. All the efforts have centered on improving the product to make it more attractive and feminine hence suiting the target market. With the strategy, there has been notable evolution of lifestyle platforms that has changed attitudes towards handbags. This has favored Coach Inc and has made it maintain its leadership role in the industry.
More customers are looking and buying the company’s products more than the competitors. This has so far increased the market share for the products and is enabling the company to expand with more stores in North America and others outside as indicated in its prospects. Indeed, this strategy has managed to yield a sustainable competitive advantage for the company and this has been evidenced by the performance the company has achieved in the last four years. Firstly Coach inc. continues to be a leader in the production of leather handbags and other related accessories in North America.
There is also an expansion that has seen improvements in countries such as Japan. In the North American market, the company continues to perform well with total revenues going up by 18%. In a full year, the company has witnessed 20% growth and a 22% increase in the sales that were achieved by all its stores. Handbags and women have continued to drive the business and consumers have expressed changed preferences. Furthermore, customers have responded well to the product innovations that have taken place in the competitive strategy. There has been specifically strong performance in the over $400 handbags in the market. It is indeed such offerings that have inspired customers into spending in the past.
Coach Inc has enormous resources that keep it ahead of the competitors. These include the financial resources that have been achieved so far due to increased sales from the stores in North America and the overall revenue collection. These resources have seen the acquisition of more stores in the market and even the expansion strategies in Japan that have indicated hope for future improvement and strong performance. The financial resources the company has cannot be compared with that of the competitors and this is a major competence that will keep the company at its current position.
The expertise that Coach Inc has is also making it more competitive than the other competitors. This expertise has been able to come up with product innovations that have driven the company into its current position in the industry. The main weakness for Coach Inc concerns the lack of well-trained and competent staff to work in all the stores. This has given some competitors an advantage over the company. The company is therefore forced to invest much in training for better and more competitive teams to work in the stores.
The company has opportunities to expand its market share to countries like China. Japan has demonstrated some growth and this is an encouragement for more activities and investments in the market. More products for ladies would emerge for instance fragrances and are likely to increase the competitive advantage. The main threat comes from the inflationary pressures. This is likely to interfere with customer spending and consequently affect sales volumes. Unfriendly tax environments with markets such as China are also a threat to the performance of the company.
References
Grant, R.M. (2005), “Contemporary Strategy Analysis”, Blackwell Publishing Ltd., Oxford (U.K.).
Michael Porter (1980) Competitive Strategy Free Press, New York.