The Defining Characteristics and the Competition in the Luxury Goods Industry

What are the defining characteristics of the luxury goods industry in 2013? What is the industry all about today? The defining characteristics of the luxury goods industry in 2013 are products that are not essential to have, but are associated with status. Luxury goods today are considered to have a higher quality than other brands.

Luxury goods will also stand out among the other brands, because they are well-known and harder to obtain. Most companies in luxury goods use differentiation strategies. In comparison to many other industries, the luxury goods industry seems to be unique by various meanings.

All manufacturers that are engaged in the industry follow a clear brand differentiation strategy because of the fact that there are limited possibilities to differentiate the products by various features. Luxury goods were only targeted for wealthy consumers, because products signified status. The luxury good market is continuously growing because of the fact that the wealth increasing not just in the United States, but globally.

Nowadays, more and more mid-income households are attracted by the advertisements of luxury goods and therefore wish to own these products as well.

What is competition like in the luxury goods industry in 2013? What competitive forces seem to have the greatest effect on industry attractiveness? What are the competitive weapons that rivals are using to try to outmaneuver one another in the marketplace? Is the pace of rivalry quickening and becoming more intense? Why or why not? Coach’s top competitors today are Dooney and Bourke, Inc, Kate Spade LLC, and Michael Kors.

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High profit margins and the enormous potential for growth increase the attractiveness of the industry and consequently enhance the competition among the rivalries. Michael Kors bags have decreased in price and differentiated their bags from Coach.

Michael Kors is one of Coach’s biggest competitors. Michael Kors annual revenue as of June 2013 is $2.4 billion and Coach has revenue of S5.1 billion. Coach is still at the top, but Michael Kors growth is increasing at a faster rate. The reason why Michael Kors growth is increasing is because the bags have recently become a popular brand and Michael Kors has other lines of business besides bags. Below you will see a graph of Coach and Michael Kors and how they did over the past 2 yeais.