Financial Analysis Case Study Assessing a Company's Future Financial Health

Financial Analysis of a Coach Inc Financial Analysis Case Study: Assessing a Company's Future Financial Health Financial analysis of a Coach Inc. Leather industry is a lucrative area of investment that entails manufacturing of products from leather. Coach Inc. is one of the many companies that work along this line of business. Coach Inc. started from manufacturing small leather goods in 1941 and expanded to produce in bulk of variety of products from leather.

Among the products it produces to date, include handbags for women, luggage and briefcases, wallets among other accessories. The company came into existence in 1941, on the 34th street of Manhattan, in New York City. It constituted a partnership called the Gail Leather Products, a family owned enterprise. At the time of start, it consisted of six leather workers who participated in the work of making wallets and billfolds by hand. In 1946, Miles and Lillian Cahn joined the company, merging it with their line that manufactured leather handbags (Lamiman, 2012).

The business grew with various investment procedures taking place until in the mid 1970s whine the name changed to Coach Products Inc., and in 1980, it changed to Coach Leatherwear Company Inc. currently, the company uses the name Coach Inc. Goals Coach product manufacturing entails handcrafting of product from the finest American and European hides and textiles. By the year 2012, the company had over 600 Coach Stores over the United States and Canada, with many others expected to launch in the subsequent years.

Among the goals that drive this remarkably successful brand of business, include its endeavor to establish exceptional brands and business exquisite in the market it operates. It also focuses on offering the entrepreneurs growth and higher income through engaging and operating businesses that promote the products of the company through selling its products (Lamiman, 2006). This means that it has the goal to create mutual relationships between the company and its first customers, who are entrepreneur retailers, in addition to the other customers, who purchase their products.

It also has the goal of reaching a larger audience of entrepreneurs; hence, the reason it invests largely in exploring its various programs of strategizing and marketing. Thus, it has various strong values that it applies as its strategy in establishing itself as a force to reckon in the business industry. The culmination of the goals of Coach Inc. is the statement that it aims to be the leading brand, producing quality accessories, which offer classic, modern American styling. Strategy Like many other successful ventures, Coach Inc.

operates on various strategies that help it to maintain the competitive advantage in the market while propagating itself to the top of the ranking charts of successful companies. Among the strategies, it lays siege on include the following. The first is that the brand is the touchstone. Here, the company presents a unique synthesis of logic that presents quality, authenticity and value, generating a distinctive American style. This gives the company the brand recognition. Second strategy that it employs is ensuring customer satisfaction.

The company states customer satisfaction as a paramount factor in achieving success (Lamiman, 2012). The company, therefore, treats the customers as guests in their home, seeking to establish a long-term relationship that draws from trust and satisfaction. This way, it wins and keeps a large customer base, ensuring success in the market. Third strategy is to operate with integrity in the market.

The company believes that devotion, honesty and fairness are crucial to their people, customers and the community concerned; thus, they seek to maintain high reputation of everything they produce in their industry. Another strategy the company envisions in its engagements is that, innovation is a driving factor of performance. The company strategy drives at establishing itself as a flexible, nimble organization that commits itself towards increasing value of the shareholders and customers.

Thus, it works towards with a lot of innovation in place to ensure it meets the goals it sets itself as a force of reckoning in the market. It applies innovation to ensure it produces quality exquisite brand of products that meet the distinctive class and style of the modern American. Innovation is the driving factor of production for the company, and it follows established programs and objectives to build its reputation of quality classic styled products. Lastly, the company employs the strategy of collaboration to establish its success (Lamiman, 2012).

The brand realizes the significance of its people and customers in their success. Thus, the company strategy entails bringing together people from dynamic cultures to establish collaborative relationships. These relationships build mutual respect, support and passion towards the brand and its products. This way, the collaborative relationships, establish strength for the company to progress forward in its business ventures, with solid unit of operation. The teams bind together to face adversities and celebrate the victories together; thus, it thrives through the strategy of collaboration to achieve success.

Market and competitive technology The working strategy of marketing for Coach Inc. entails a consistent message. The message focuses on when the Coach brand is in contact with the consumer; communication goes through physical and visual merchandising. The internal system of Coach creates the image of the company, which then the creative marketing, visual merchandising and public relations teams take over and propagates the marketing process.

Additionally, in executing its market strategy, which involves exploitation of the market to ease opportunities for investing, Coach also created a sophisticated consumer and market research team (Vaillancourt, 2010). The consumer and market research assist the company in the process of establishing the consumer attitudes. This realization helps the company to invest in its innovative skills to meet the needs of the consumers, hence success. Secondly, the assessment team reviews the trends and gauges of products.

This procedure of identifying the needs of the consumers is helpful in establishing the success factor of the product prior to when launched into the market. These precaution measures have the view of engaging the consumer to find the likelihood of the product success. Therefore, this strategic move helps the company in establishing the success of the products once released into the market. This further helps the company to project its expected revenues and earnings from the launch of product, eliminating their fears of failure.

Lastly, this procedure gives the company confidence to explore further and venture while promoting personal development character of its employees and consumers. In addition to promoting the global image of the company, Coach Inc. also establishes extensive customer database and consumer knowledge. This factor of establishing such databases gives light for the company through its innovation and manufacturing procedures to target precise products and communication to a specified member and consumer groups for particulate products.

Thus, the company maximizes on sales from across all the channels of distribution and those far from the place of manufacture (Vaillancourt, 2010). Securing maximum profits from all channels of engaging the consumer helps the company to establish strong relations information between it and the consumers. This improved power to improve the skill of brand imaging and product promotion guide the company in growing. The consumer initiatives that Coach Inc. engagement are quite several, including those advocating for direct marketing and national, regional and local advertising.

For instance, the success factor of these strategies bring in remarkable profits, for instance, in the fiscal year 2008, the company saw an increased consumer contact, a factor that contributed significantly to the increased turnover of over 26% growth, and reaching 144 million mark of consumers. Additionally, the company does not relent on the process of leveraging the expenses involved in marketing (Vaillancourt, 2010). The company leverages these expenses through refining the programs of marketing of the company, increasing the productivity of each section and optimizing the distribution of office.

For instance, in this process of revenging the strategy for marketing, in the year 2008, Coach Inc. spend a sum of 57 million dollars, which constitutes, only a small amount of the net sales of the company. The marketing activities that coach engages include the following procedures. Coach undertakes direct marketing activities that range from catalogs, brochures and email contacts. These factors target at promoting sales to the consumer in their preferred shopping venue.

Moreover, after building the brand awareness, the company uses its online platforms such as Coach Catalog and www.coach.com services to ensure effective communication vehicles. The company uses the technological advertisement to boost where the consumer access to the products of the company. Through the strategic offering platform, the company posts the recent and ultra modern factors which drive store traffic; hence, the sales the company is enjoying year in-year out (Vaillancourt, 2010).

The selection of the catalogs means that the marketing strategy focuses on selected consumers to promote consumer collaboration between the company and the promoters, supporters and consumers of the products of the company. The growing investment in online services and marketing are contributing stimulation towards the emancipation of the company from being captive of local sales into expanding internationally. The splitting of advertising procedures into those focusing on local, national and regional tradition propagates the company in making contact to its consumers.

Regulatory and operating characters The company continues to operate within the confines of its core values and strategies to ensure success while implementing its objectives. These are the regulatory internal factors, including the company culture and regulations governing the internal operations and engagements of the employees and managers. Additionally, like other trading companies, Coach is subject to the local, national and international trading regulations in all the areas where it operates.

Therefore, under the watch of the rules and regulations governing market engagements and activities, the company stays within the operating limits of the industry. The operating characters of the company include the extensive and highly competitive field. The main competitors of the company include Michael Kors Holdings Limited, Dooney and Bourke Inc., China Xiniya, Carter Inc. And bebe stores Inc. among others in the industry (Vaillancourt, 2010). Thus, with such competitive environment, the company continues to establish it operating feature involving the use of technology extensively to market.

Additionally, the company has a characteristic of branding name to renew its operating procedures, as well as, working through establishing collaborations with other companies and individuals. These operational features propagate the Coach Inc. while existing in the mostly competitive environment. Revenue outlook Recently, news from the New York Stock Exchange market hit headlines indicating that the first quarter of the year marks a drop in sales for Coach Inc.

The company further attributed this factor to the changing guard, in which Victor Luis became the new president and chief commercial officer. However, the truth in finding is the increasing competition from the other manufacturing industries in the same line of business. Nonetheless, the company still enjoys remarkable growths of revenues and expansions over the years, which remains steady (Coach, inc. 2010). The company holds both local and international segments that cover several consumers across the globe, operating in Japan and China physically, among others with which it operates online.

The valuation measures on the company provides statistics such as Market Cap in which the company rates at $14.07 billion, enterprise value of $14.05 billion and management effectiveness of 29.72% returns on assets and 47.00% return on equity (Young, 2010). The income statements indicate the revenues at $5.08 million, with the revenue price per share being $17.97. The ranging price of a share of the company is $48.89, which represents an average over the year.

The revenue margin growth over the years for instance, over the period from 2007 to 2013, the rating was as following, $2.612 million, $3.181 million, $3.230 million, $3.608 million, $4.159 million, $4.763 million to $5.08 million consecutively (Coach inc. reporting earnings, 2012). These figures indicate a growing revenue turnover for the Coach inc. The financial of the company show growing net income, which relates with the resulting revenue of the company.

Therefore, in view of the revenue outlook of Coach Inc., the company has a remarkably steady growing factor despite the challenges it faces from competition and the disappointing sales as well as currency weigh impacts on the profits. Investments supporting business unit strategy The transformation process of Coach Inc. started in 1985 when the Chans decided to sell their shares of the company to Sara Lee, who incorporated it under Hanes group. Later, in the subsequent years, it incorporated Reed Krakoff leadership, who enjoys the credit for making Coach Inc.

The successful giant it is in the market today. The company enjoys investment support from the leadership, which consist of various executive officers operating various departments of the company. Additionally, the company trades in the New York Stock Exchange market where it trades part of its shares publicly receiving investments from willing participants (Free research report on Georgia gulf corp., regions financial corp., mondelez international, inc., CSX corp. And coach, inc. 2013). However, the leading investment is from the primary shareholder, who is the owner of the company.

Thus, in performing its activities the company relies on the investments of shareholders, in addition to its own management, to support its business units. The employees also invest their hard work supporting the unit into the successful business. Future profitability and competitive performance The company has been having a trendy growth in revenue and income as the balance sheets indicate. This steady growth is from the staunch management and operating culture and policy that it engages in establishing itself as a leading business venture.

Additionally, it continues to expand accordingly as currently it operates up to over 600 stores across the globe. Additionally, the company incorporates online stores, which is boosting the growth factor of the company. Therefore, in view of the future profitability of the company, despite the woes of the currency weight, which affect the international profits, Coach Inc., still presents itself as a leader and will continue leading in profit growths in the future. The hiring of Victor Luis as the new marketing chief officer and the president is.