Coach Five Forces

External Environment
Five Forces Analysis – Luxury accessories
Force

Threat level (high or low)
The Threat of Substitutes

High

Substitutes include:
Counterfeiters, Not using luxury accesories
High
Power of Buyers

High

Many buyers relative to rivals?
Yes -> Low

Need the item?
No -> High

Have all the information?
Yes ->High

Lots of substitutes?
Yes ->High

Product performance is critical?
Yes ->High

Product differentiation is possible?
Yes->Low

The Threat of Entrants

High, but not as high

Capital Requirements
Yes -> Low

Product differentiation is possible?
Yes ->High

Access to distribution channels?
Yes ->High

Government regulations
Yes -> Low

Buyer switching costs?
No -> High

Profitable?
Yes ->High

Economies of scale?
Yes -> Low

Power of Suppliers

Low

Many suppliers relative to rivals?
Yes -> Low

Important component
No->Low

Suppliers switched easily?
Yes -> Low

Differentiation possible
Yes ->High

Short supply?
No->Low

Vertical integration possible:

Backward
No -> High

Forward
No->Low

Intensity of rivalry

Low

Industry growth?
Yes->Low

Differentiation possible
Yes -> Low

Buyer switching costs?
No -> High

Exit barriers?
No->Low

Conclusion (overall)

Moderate risk

Based on Porter’s Five Forces Analysis, Coach Inc. biggest hurdle will be the Threat of Substitutes. The Threat of Entrants is high, but it’s a more moderate risk than the substitutes, largely due to counterfeit products, as well as other big brand name competitors like Michael Kors and DKNY.

External Environment
Five Forces Analysis – Luxury accessories
\
Force

Threat level (high or low)
The Threat of Substitutes

High
Power of Buyers

High
The Threat of Entrants

High, but not as high
Power of Suppliers

Low
Intensity of rivalry

Low
Conclusion (overall)

Moderate risk

Based on Porter’s Five Forces Analysis, Coach Inc. biggest hurdle will be the Threat of Substitutes. The Threat of Entrants is high, but it’s a more moderate risk