Coach Inc.: The Great Recession

Introduction, History and Key Issues

In 2000, Coach Inc. became the first recognizable retailer in providing an accessible luxury good, namely in the women’s handbag market. Coach’s mission was to do something competitors had not yet realized was feasible: they offered a product of comparable or matched quality at a significantly lower price. Coach’s sales increased at an annual rate of 20% until the onset of a slowing economy in 2007 known as “The Great Recession” (Gamble, 2015, Page 73). Slowing sales began to take their toll; however, it was the introduction of primary competitors following a similar business strategy (Ex. Michael Kors, Versace, etc.) to the market that directly threatened Coach’s standing. In an attempt to revive business, Reed Krakoff was hired as the new

Currently, Coach faces a unique circumstance: they must learn how to differentiate themselves in a newly competitive environment where they were once the only player. Similarly, Coach faces many direct and pressing issues related to this overarching theme, the first of which is building market share in underpenetrated markets, both domestically and globally. In North America, the growing middle class and male interest in accessible luxury goods have opened up two new market segments, both of which are currently untouched by Coach. Coach must find an efficient way to exploit demand in these segments, and if they cannot, risk missing out on a major opportunity. Globally speaking, India and China have developed similarly booming middle classes who have driven great demand for Western accessible-luxury goods. Coach must find a means to expand globally through the penetration of these viable markets and to remain relevant in the accessible luxury goods industry. The pressing issue here lies in Coach’s mode of market entry and global strategy within countries where there is significant cultural,