Case Study Walt Disney

Morgan Stokes

Coach Inc. Case Study #4

1. The key defining characteristics of the luxury goods industry are market size and growth rate, number of rivals, scope of competitive rivalry, number of buyers, degree of product differentiation, and product innovation. The luxury goods market comprises products targeted towards the world well-to-do consumers. The items include designer apparel, transportation like cars and motor homes, jewelry, high-end electronics and personal care products. The products are not necessities although fine food like caviar and beverages like wine and cognac are luxury goods. The luxury goods industry is global in scope. In 2005, Italy (27%), Replica Armani Swiss France (22%), Switzerland (19%), US (14%) controlled a combined 82% of the worldwide luxury goods industry sales. In 2006, the industry was expected to grow by 7%. Much of this growth can be attributed to increasing income and wealth in developing European countries, China, and changes in consumer buying habits. Additionally, the entry of big box stores into the distribution chain has opened the market to middle-income consumers, who earn substantially less than the $300,000 household income.

2. There is major competitive rivalry between other rival sellers with the same products. Society has a major role in what luxury goods are purchased. There are threats of substitutes by way of knock offs. There is bargaining power of buyers as well as sellers meaning that luxury goods competitors have the opportunity gain access to certain materials. There is also a threat of new entrants such as new luxury goods that are profitable for a period of time. The competitive forces that have the greatest effect on industry attractiveness are rivalry and bargaining power of suppliers and buyers. Rivalry has a major attractiveness because the competition has the opportunity gain competitive advantage over their competitors. The bargaining of suppliers and buyers has a major attractiveness because...