Coach Entering Japan's Luxury Goods Market: Analysis
This paper evaluates Japan as a target market for luxury brand Coach, examining market conditions and associated risks across two parts. The first section profiles Japan's luxury goods landscape, covering consumer demand, competitive intensity, infrastructure, government environment, and potential retail locations. The second section assesses political, economic, currency, competitive, and operational risks. Despite a prolonged economic slowdown and modest recent sales declines, Japan remains the world's largest per-capita market for luxury goods, presenting a compelling opportunity with limited barriers to entry and manageable risk exposure. The paper concludes with a recommendation that Coach enter the Japanese market.
- Japan's Luxury Goods Market Overview: Demand trends, GDP, and consumer spending patterns
- Competition and Market Structure: Competitive intensity and pricing dynamics
- Infrastructure, Logistics, and Retail Locations: Supply chain, staffing, and retail site options
- Political and Regulatory Risk: Stable government and low corruption levels
- Economic and Currency Risk: Slowdown outlook and yen exposure
- Competitive and Operational Risk: Low rivalry intensity and day-to-day operations
- Recommendation: Entry recommended with limited risk concerns
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What makes this paper effective
- Organizes analysis into two clearly differentiated parts — market conditions and risk assessment — giving readers a logical, sequential framework for evaluating market entry.
- Grounds claims in concrete data points (GDP per capita, luxury goods market share percentages, interest rates) that lend credibility to the analysis.
- Addresses multiple dimensions of risk (political, economic, currency, competitive, operational) systematically, demonstrating comprehensive due diligence.
Key academic technique demonstrated
The paper applies a structured market-entry framework, separating descriptive market profiling from risk analysis. This two-part structure mirrors standard international business methodology, where opportunity assessment precedes risk evaluation before arriving at a justified recommendation — a technique common in business strategy courses.
Structure breakdown
Part I covers demand trends, competition, government environment, human resources, supply chain, infrastructure, and retail location options. Part II addresses political, economic, currency, competitive, and operational risks in turn, culminating in a brief recommendation. Citations are formatted in APA style and span trade publications, government databases, and academic working papers.
Japan's Luxury Goods Market Overview
Demand for luxury products is strong in Japan. The country is one of the world's leading markets for luxury goods, and most producers of luxury goods have enjoyed tremendous success when entering the market (Prasso & Brady, 2003). The Japanese economy is the third largest in the world, and the country enjoys a GDP per capita of $32,700, roughly on par with that of France (CIA World Factbook, 2010). Japanese consumers first became attracted to luxury brands during the 1980s and have maintained demand for luxury brand products even through the country's prolonged recession. The Japanese market is of critical importance to most luxury brand producers, representing between 20–36% of total revenue for major luxury brand firms, and the country consumes as much as 41% of the world's luxury goods (JETRO, 2010).
Growth in Japan, however, has been declining in recent years. A survey of the global luxury market in 2008 saw spending in Japan decline 7%, one of the few regions to see such a decline, although this decline is attributed mainly to the high level of Japanese spending on luxury goods — they remain the world's biggest market for luxury brands and the highest per-capita spenders. Japanese consumers have maintained their focus on conspicuous consumption in the pursuit of social esteem (Degen, 2009). The market is expected to remain strong, even if sales continue to slump, and some in the industry believe Japan may see a surprise rebound (Kirby, 2010).
Works Cited
Prasso, S. & Brady, D. (2003). Can the high end hold its own? Business Week. Retrieved November 2, 2010 from
CIA World Factbook: Japan. (2010). Retrieved November 2, 2010 from https://www.cia.gov/library/publications/the-world-factbook/geos/ja.html
Japan Today. (2008). Japan ranked 18th in int'l survey on gov't corruption. Japan Today. Retrieved November 2, 2010 from
JETRO. (2010). Japan is the world's most concentrated source of revenue for luxury brands. Japan External Trade Organization. Retrieved November 2, 2010 from http://www.jetro.org/content/361
Degen, R. (2009). The success of luxury brands in Japan and their uncertain future. IPL Working Paper. Retrieved November 2, 2010 from
Kirby, N. (2010). Luxury brand's growth miracle. Articles Alive. Retrieved November 2, 2010 from
Ujikane, K. & Otsuma, M. (2010). Japan policy tinkering leaves huge risk to growth. Bloomberg. Retrieved November 2, 2010 from http://www.bloomberg.com/news/2010-08-30/japan-policy-tinkering-leaves-economic-outlook-with-huge-downside-risks-.html
Sanchanta, M. (2010). Fierce pricing: A luxury store turn-off. Wall Street Journal. Retrieved November 2, 2010 from http://blogs.wsj.com/japanrealtime/2010/09/08/fierce-pricing-a-luxury-store-turn-off/
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