Analysis of Accessories & Gifts Manufacturing Industry Coach, Inc Research Paper

Analysis of Accessories & Gifts Manufacturing Industry Coach, Inc - Research Paper Example Established companies in the industry thus have a distinctive advantage over the newly emerging companies. Initially the new companies have to snatch consumers from the pool of consumers in the giant companies. In an industry where brand name is significant snatching consumers from other companies is not an easy task for the new entrants. Lack of financial resources, experiences and market information worsen the disadvantageous market position of such new entrants. Financial Strength Lead Leverage of Suppliers In 2012 Coach Inc. spent approximately 89.2 million dollars for refining the marketing programs & enhancing the consumer communications, aiming at increasing the productivity of its market channels & optimizing the product distribution (Coach, 2012). Furthermore established companies invest largely on innovation and continuous product improvement. Thus the level of newness is accelerated, product offering in retail showrooms is elevating and the in-store experience of consumers is enhanced. Improving the quality of products and services leverage the company’s leadership position in the market (27). Emerging companies have to compete with such giant companies who annually invest large sums on marketing and product development strategies. Leverage Ratio (LR) of a company is given by the following equation. In December 2012 LR of Coach Inc. amounted 0.57. Only one other company in the industry had recorded a better financial stability than Coach Inc. It also ranked number 22 among the S&P 500 companies list according to the LR. Financial strength of the company and the sustainability of its market development are evident in the improving trend of LR annually (CSIMarket, 2012). Figure 1 depicts the improvement of Leverage Ratio of Coach Inc. during the three quarters of year 2012. Figure 1: Quarterly Leverage Ratio of Coach Inc. in 2012 Source: CSIMarket, 2012 Marketing Strategy Lead Leverage of Suppliers Marketing strategies adopted by a specific comp any can create market leverage. Example: market expansion of Coach Inc. in various geographic locations, invading the niche and newly emerging markets in the world. Coach Inc. Annual report (2012) states that company aims to open 500 retail stores in America including 30 stores in Canada in 2013. Accordingly the company expects to open 10 new retail stores and 18 factory outlets in the coming year. By increasing the number of retail outlets and manufacturing plants, the availability of a given company’s products is increased compared to the availability of the products of other companies. Thus the market power of said company is also increased. Market Information Lead Leverage of Suppliers Companies such as Coach Inc. have data bases developed over decades. Company has years of experiences and extensive market information relating to the consumers, partners, importers, distributors and competitors. Example: Coach Inc. collects data on consumer’s demographic characters and their preferences. Marketers and financial experts of Coach Inc. continuously observe the business environment. They identify the trends in the macro economy and the marketing strategies of the competitors including the new entrants. Company’s annual invests for market research is approximately 2 percentage proportion of the net sales (Coach, 2012). These companies