Porter Five free essay sample

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 â€Å"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. We will write a custom essay sample on Porter Five or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page (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 â€Å" 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. â€Å"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 increase competition is to have a transformation strategy that evolve a global lifestyle brand anchored in accessories but will not see a change until at least two quarters. Another strategy will to increase in private labeling. (Trefis Team, 2013) Buyer Power Coach intensity for Buyer Power was at a medium intensity for the month of September 2013 and sold through both direct-to-consumer channel and wholesale channel. This reports that Coach is very limited since â€Å"the wholesale customers accounts for only 10% of the total sales. † (Trefis Team, 2013) Looking at the bargaining power of end-customers will most likely stay moderate due to its high quality products and brand image. Some of the competitors have not been able to increase sales and customer base while raising prices at the same time is an advantage that Coach also have with the bargaining power. (Trefis Team, 2013) Supplier Power Bargaining Power of Supplier for Coach was at a low intensity for the month of September 2013 due to not manufacturing its own products. â€Å"Coach relies on several countries for manufacturing to name a few are China, Vietnam, India, Philippines, Thailand, Italy and the United States. † (Trefis Team, 2013) Coach has and advantage to have the bargaining power to negotiate prices since the suppliers like to have contracts with Coach and if one wants to increase price Coach can go to another supplier. (Trefis Team, 2013) Product Development The threat of product development and the threat of substitute products are at low-medium intensity. The two types of substitute that could be a threat are alternative brands and counterfeits. (Trefis Team, 2013) The key factor of driving consumers to alternative brands is if and when Coach would have a quarter of poor quality of product that Coach offers. The counterfeit product would be a threat to Coach in the market place that produces the product and the quality is very poor which could happen in an emerging country like China. (Trefis Team, 2013) Coach, Inc. Analysis using Porter Five Forces