Coach Inc. Case Analysis Six years after deciding to become an independent public company in late 2000, Coach Inc.'s net sales had increased to a compound annual rate of 26 percent and the stock price had increased by 1,400 percent due to a strategy based on a concept called accessible luxury. Coach created the accessible luxury category in women's leather handbags and accessories by differentiating on price but competing on style, quality and customer service. The accessible luxury strategy reflects a strategy of concentration (or market niche) based on low costs. Coach focuses on a narrow buyer segment and outperforms its competitors by having lower costs than its competitors and thus being able to serve niche members at a lower price. Management believed that new products should be based on market research rather than designers' instinct. Coach used in-depth consumer surveys and focus groups to gain market insight and ultimately a competitive advantage over the competition. Coach handbags priced at $200 to $500 appealed to both middle-class consumers who could now afford a taste of luxury, as well as affluent consumers with the means to regularly spend $2,000 on a handbag. In addition to the strategies above, Coach Inc. has also adopted an aggressive growth tactic by expanding its stores in the United States and Japan. In early 2007, management planned to add 5 outlet stores and 30 full-price stores, specifically in the United States, as well as at least 10 stores in Japan per year. In doing so, Coach hopes to leverage their market potential. Coach has also entered into licensing agreements with Jimlar Corporation, Movado Group and Marchon Eyewear in an effort to expand their network of...... middle of paper.... ..o-Assets |22.9% | 27.0% ||Times '' Interest Earned |36.3 |23.4 |Figure 8: SWOT AnalysisStrengths: -Market research-Core skills in: women's clothing, customer service, onboarding-Strong financial position-Brand strong - Creativity and innovation - Global geographic coverage - Alliances, joint ventures, licensing Weaknesses - narrow product range (men) - e-commerce - intellectual property Opportunities - openings to gain market share from competitors - serving additional customer groups or market segments - online rival companies acquiring sales Threats - economics - loss of sales to substitute products (counterfeiting) - bargaining power of customers or suppliers