Coach Implemented

Coach implemented its new strategy in 1996 when Coach's sales growth had declined to an all-time low. Lew Frankfort was hired as new head of the Coach department whom then hired Reed Krakoff as the new creative director. Krakoff conducted consumer research and held Focus groups to develop a new strategy for the designs of their handbags. The recurring customer feedback enabled the company to stay on top of the consumers demands and to design new collections on a monthly basis. The company also redesigned its stores and made them lighter with a more modern design. This proved to be a successful direction for Coach.

Coach's strategy is to match key luxury rivals such as Louis Vitton, Gucci, Fendi and Prada on quality and styling while beating them on price. Coach is focused on offering luxury products which attract both the high end customers as well as middle class customers. Their strength definitely lies in the lower cost of their luxury products as well as their frequent introduction of new designs. "By 2006, Coach had become the best-selling brand of ladies luxury handbags and leather accessories in the U.S and had a 25% market share. It also became the second best-selling product in this category in Japan with an 8% market share." Their stock price has increased by 1400% since their IPO in 2000.

Coach's weaknesses are that their outlet stores are outperforming their regular stores, which could lead to a dilution of the brand. Another weakness lies in the fact that the sales numbers for their men's wear, outerwear and luggage lines are only 1-2% of their total sales which is a very uneven distribution and should be increased. In addition to that, their competitors are posing a threat to their sales by creating lower-cost lines which are affordable to Coach's current target consumers.

The future growth strategy for the company is to expand its presence in America and Asia and increasing sales to existing customers. Coach also wants to increase their retail Coach is also looking to expand further into other luxury categories such as watches, knitwear and shoes.

Overall, the company has had a stellar financial performance during the last decade with steep increases in sales, stock prices and growth. The best way for Coach to go, is to continue with their current strategy of producing luxury goods at a lower cost. They should increase their sales for their weaker lines to gain a bigger market share and also focus heavily on store growth with a set amount of new store openings each year.