Given the popularity of luxury goods in Japan, there is a disincentive for politicians to treat luxury goods in a way that would make them more expensive or less accessible.
There is some degree of economic risk. While the luxury goods market in Japan has thrived throughout much of that nation's prolonged economic slowdown, recent declines in the Japanese luxury goods market indicate that the sector's historic robustness may be under threat (Kirby, 2009; Degen, 2010). The outlook for the Japanese economy remains relatively poor for the coming years. With a low interest rate of 0.1%, there is little room for monetary expansion, so it may be years before Japan's economy picks up significantly with strong external purchases of Japanese goods (Ujikane & Otsuma, 2010). This could have an impact on luxury brand sales.
Another economic risk comes in the form of currency risk. The Japanese market has the potential to be a significant one for Coach, so the company must consider the currency impact of the yen. When the value of the yen falls against the U.S. dollar, this devalues profits that come from Japan. As such, entering this market introduces an element of financial risk to the organization, which will necessitate either currency hedging or operational hedging (i.e. sourcing goods in Japan).
There is little competitive risk in the Japanese market. In many cases, luxury brands complement each other -- Coach focuses on handbags and leather goods while other brands focus on different products. This specialization results in a low intensity of rivalry, especially when consumers are price takers. Luxury brands tend to strategize globally as well, so when one market falters they focus on other markets. At present, mainland China is the market most luxury brands are focusing on (Kirby, 2010). The behavior of luxury brands is relatively unique as well -- they will not escalate competition by lowering their prices as this would devalue their brands. As such, there is not expected to be a strong competitive response directed at Coach if it enters the Japanese market.
Japan represents only moderate operational risk. Day-to-day operations will not vary much in the Japanese market...
For example, an employee should be categorized on his or her ability to move up the corporate ladder, and the timing of such a move. If Coach wishes to enter India in 2011, then, the company would know which among the firm's managers is able to move into one of the new roles today, and which might be able to move into such roles in the future. The second policy
Coach Channel Management Analysis Coach Inc., Distribution Channel Analysis Company Description and Overview Coach Inc., (NYSE:COH) is a globe leader in fine accessories and gifts market, and one of the most profitable competitors in the leather goods and luggage manufacturing globally. Coach generated $4.76B in Revenues in their latest full fiscal year and earned a Net Income of $1.04B. Coach is a highly profitable business, earning 21.77% Net Profit Margin, 30.44% Operating Margin
While this class of Russians was known for its fascination with luxury brands, there is evidence that Russia's newer wealthy class are shifting their tastes to more independent looks (Groskop, 2008). The target market therefore is going to be part of the older demographic, for whom luxury brands are directly equated with status and style. In Russia, these will tend to be females in millionaire families, aged 35 and up.
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