Coach incorporated a differentiation focus strategy to make luxury goods (luxury handbags) industry more attractive for itself. Coach entered into agreements with other companies providing rights to them to manufacture and market Coach Brand products. Royalties from such integration helped Coach to boost up their sale by 4 to 5 % in year 2006. The vital part of their business strategy was a business model focusing on frequent launch of their new product which in turn attracted their best customers to visit the stores frequently. This business model was accountable for enormous rise in numbers of handbag sales from 2002 to 2006. “Seventy percent of Coach’s 2006 sales came from products introduced within the fiscal year”(p.106). Coach was specialised for the service to their customer which involved replacement or refurbishment of the handbags without considering the age of the bag. On the other side major competitors weren’t able to cope up with Coach’s service criteria. Promotions through catalogs was their virtuous way of marketing contributed to build brand awareness and also promoted store traffic. The idea of generating revenue from factory stores fortunately became a success business model for Coach. “Coach’s factory stores had outperformed full-price stores in terms of comparable store sales growth during 2005 and 2006, with comparable factory store sales increasing by 31.9 percent during 2006 and comparable full-price store sales increasing by 12.3 percent during the year”(p.109). Overall, Coach was able to differentiate their business expertise from all other competitors in the market with two major business concepts which included “frequent launch concept” and “generating revenue through factory stores”.
Resources and capabilities ( key factor for success in the industry) Resources and capabilities include firm’s financial, physical, human, and organisational assets used by them for...