Business Portfolio Assessment – “Coach”
The company ‘Coach’ founded in 1941 as a family-run workshop is claimed to be original keeper of American heritage of fine leather goods and custom fabrics. It is a producer and marketer of accessories and gifts for women and men from wallets, gloves, scarves, handbags, outerwear, eyewear, and perfume. There are many new things like footwear and watches and office furniture and so on. (Coach.com, 2011a) the company has a global presence and Coach continues to expand into many countries in keeping with its mission to build a global brand and has values that is to be followed in all locations and its own principles that is termed ‘The Global Business Integrity Program.’ (Coach.com, 2011b) While like all other business units, Coach also seems to suffer from the problem of recession but seems to expand still into Europe. Coach is now in Paris, the fashion centre of Europe. (Menkes, 2010) Thus while on the one hand, there is expansion, there seems to be some unsureness and jittery feeling of market loss the way these companies are getting aggressive to simple challenges.
There is the scare of counterfeit goods, which is catching on and making companies like ‘Coach’ offensive. No doubt counterfeits eat into the profits of the company and the high price sector of its goods is likely to attract counterfeiters. So in spite of having a great global brand and the principles that is termed ‘The Global Business Integrity Program’, Coach it seems is trigger happy when it comes to a sale or resale of its products on e-bay. The news item that is being examined is illustrative of the aggressiveness of the company in the market. Reported from Seattle, the incident relates to one Gina Kim who purchased a handbag for $428 using the employee discount at a Coach Inc. store in San Francisco. It was for some time in unused condition. It was put up for sale at eBay. There was immediate legal action from the company which sent a “cease and desist” letter from the company’s attorney who had also accused her of “selling counterfeit goods in violation of state and federal law.” (the Associated Press, 2011) There was also a mention of a penalty that may range to 2 million and she was required to admit wrongdoing, and pay Coach $300. (the Associated Press, 2011)
The removal of the Ebay Ad and the legal notice made Kim sue the Coach inc for Consumer Protection Act violations, defamation and question on the issues legitimate objective, cracking down on the massive U.S. market for counterfeit goods and if Coach and other companies are taking advantage of law. It is foolish according to the attorney of Kim for Coach to threaten its customers with $2 million lawsuits and before antagonizing customers the company must do a minimal investigation and it is not known how many customers got scared and paid off Coach. Kim, had worked for the Coach in 2004, filed suit saying among other major charges that the company wanted to suppress online sale of used items to pay high prices to the company for a Coach handbag. There is a problem for all companies which grapple with counterfeiting and it is often seen on Craigslist and eBay. Along with Kim one more eBay seller, James Caffarella of Littleton, Mass was also sued when he tried to sell legitimate silver golf-ball Tiffany key chain using a stock photograph. He too received a cease-and-desist letter, but withdrew when it found his sale genuine. (the Associated Press, 2011)
In analysis what can this amount to? Is Coach missing the big picture and nit picking on individuals while larger interest suffers elsewhere? Coach is not bothered about the settling fee or wrong doing but as perhaps is claimed by Kim, does it want all people to buy only the product from its store at its price and then never to sell or exchange the product thus decimating the seconds market? Or is it an overzealous act by attorney who examines every auction and sale and sends notice to all persons who display the company product? May be that is the answer, but the suit can have long reaching consequences in trade mark, consumer rights and many other aspects of the law. It can also signal that Coach is afraid that its market may be assailed dirt’s by resellers and then by lesser brands. So while the coach is going places on one hand, it is not so sure of its market hold.
Coach.com. (2011a) “Company Profile” Retrieved 21 February 2011 from http://www.coach.com/online/handbags/genWCM-10551-10051-en-/Coach_US/CompanyInformation/InvestorRelations/CompanyProfile
Coach.com. (2011b) “Global Business Integrity Program” Retrieved 21 February 2011 from http://www.coach.com/online/handbags/genWCM-10551-10051-en-/Coach_US/CompanyInformation/InvestorRelations/GlobalBusinessIntegrityProgram
Menkes, Suzy. (2010) “Coach Gallops Into Europe” New York Times,
Retrieved 21 February 2011 from http://www.nytimes.com/2010/11/02/fashion/02iht-fcoach.html?_r=1&ref=coachinc
The Associated Press. (2011) “Coach says it’s not overzealous in sales crackdown” Business
Week, Retrieved 21 February 2011 from http://bx.businessweek.com/coach-inc/view?url=http%3A%2F%2Fc.moreover.com%2Fclick%2Fhere.pl%3Fr4038503545%26f%3D9791
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