Essay About Michael Kors And Value Of The Coach Brand

Coach Financial Reporting
Coach Inc. implements two main strategies to develop its business and expand its market globally. The first strategy is to retain the value of the Coach brand. As a company in the luxury goods industry, Coach Inc. is facing a huge competition and the rapid changing fashion trends. So, Coach Inc.’s tactic is to build its brand image as an affordable luxury brand in the mind of the target market. In the luxury goods industry, the quality products always are associated with the extremely high prices. According to the price tag of Coach’s product, the brand image in the minds of its customers is premium goods with affordable price. This strategy positively affects the company’s results of operation and promotes its sales. However, Michael Kors applies a different strategy to retain its premium luxury image in the mind of its customers. Michael Kors offers two primary collections, the Michael Kors luxury collection and the Michael Michael Kors accessible luxury collection. The target markets of these two collections are different. The Michael Kors luxury collection is carried in many retail stores and in the finest luxury department stores in the world. The Michael Michael Kors collection has a strong focus on the accessible luxury goods and is carried in all of lifestyle stores and leading department stores throughout the world. This strategy targets a broader customer base.            Another strategy of Coach Inc. is the global expansion of its business. Coach Inc. is highly successful in the international expansion strategy. Coach Inc. enters into the foreign market by establishing joint ventures and distributors relationship. Then, Coach Inc. acquires its partner’s shares to take over the control of its brand. In 2001, Coach Japan was formed as a joint venture with Sumitomo Corporation. Four years later, Coach Inc. purchased Sumitomo’s 50% interests in Coach Japan. Then, Coach Japan became the wholly owned subsidiary of Coach Inc. And, at that moment, Coach Inc. has successfully entered into the Japan market and took its own portion of market share. In fiscal 2011, the company implemented this strategy again in order to expand its business in Europe. To occupy the market share of Asia market, Coach Inc. acquired the domestic retail businesses from its distributors in Hong Kong, Macau, Mainland China, Singapore, Taiwan, Malaysia, and South Korea. The results of the global expansion strategy were turned out to be excellent. Coach’s network of international distributors is located in 45 countries. In fiscal 2015, the annual report shows that about 39% of total net sales are from the international market. Michael Kors has the same target as Coach Inc.’s, which is to expand the global market. However, Michael Kors took the different method to achieve this target. Unlike Coach Inc.’s acquisition, Michael Kors increases its international retail store base and wholesale doors in the select regions, such as Europe and Japan, to expand its global market share in the luxury good industry.  In the fiscal 2014, Michael Kors’ global basis business contributed about 21.5% of total revenue to the company. This global performance was not as good as Coach. Inc.’s.