1 What is the competition like in the luxury goods industry

1.   What is the competition like in the luxury goods industry? What competitive forces seem to have the greatest effect on industry attractiveness? What are the competitive weapons that rivals are using to try to outmaneuver one another in the market place? Is the pace of rivalry quickening and becoming more intense? Why or why not? Elaborate on the conclusions from your analysis.

2.   What are the defining characteristics of the luxury goods industry? What is the industry like? (Describe market size and growth rate, scope of rivalry, consumer characteristics, degree of product differentiation, etc.)

3.   How is the market for luxury handbags and leather accessories changing? What are the underlying drivers of change and how might those forces change the industry?

4.   What are the key factors that determine the success of makers of fine ladies handbags and leather accessories?

5.   What is Coach’s strategy to compete in the ladies handbag and leather accessories industry? Has the company’s competitive strategy yielded a sustainable competitive advantage? If so, has that advantage translated into superior financial and market performance? Explain.

6.   What are the strengths and weaknesses of Coach Inc? What competencies and capabilities does it have that its main rivals don’t have? What new market opportunities does Coach have? What threats do you see to the company’s future well-being? Bring conclusions to your analysis.

7.   What recommendations would you make to Lew Frankfort to improve the company’s competitive position in the industry and its financial and market performance?

Solution

1. Luxury goods are those goods whose demand increases with the increase in income and demand decreases with the decrease in income. It is also called superior good or Veblen good. The luxury goods industry is highly competitive market with differentiated firms (product differentiated by identity). Hence, it will be more of monopolistic market.

The competitive forces that seem to have worked out it the industry are price, quantity, advertisement, offers, brand loyalty, etc.

In the market place, rivals deploy innovative products, advertisements, price deduction kind of strategies to capture the market.

The rivalry indeed has become quickening and more intensive because of the role the competition playing in the market. All firms in the market are deploying different strategies to gain market share or to survive in the business.

2. Luxury goods industries are highly competitive industry with differentiated products. There are large numbers of firms. The entry and exist of firms are not restrictive. The demand for product in the industry have downward sloping curve. The rivalry among the firms is very intense and deploys different strategies (price, quantity, advertisement, etc) to capture the market or to survive in the business. Consumers in the market show some kind of inclination toward brand loyalty and quality which give rise to degree of product differentiation.

*when there is multiple questions please distribute them on different post.