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The first strength of MK brand is that it is resilient and adaptable. The manager of MK knows how to rescue and optimize the brand when the quality was not very high, especially at the beginning time when the MK just established. And the management of MK has been able to increase its price constantly thus making the quality went up as well in order to making more profits. Besides, Michael Kors, a world-renowned designer, individually lead his team.
And, he is very involved with the marketing and publicity strategy since the company set up, and dominantly responsible for directing the design of all products with a unique advantage.
And, MK brand is really a potential brand with the high-quality goods and suppliers. It is the most rapidly growing luxury lifestyle brand. “According to the Altagamma Studies , from 2005 to 2010, the accessories product category was the fastest growing product category in the global luxury goods industry representing 25% of total luxury goods sales” (2013).
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Although the majority of current sales come from the North America, MK still continues to build up and expand its market and brand awareness in EU and Asia. “Michael Kors operates in the growing global luxury goods industry, which, according to the Altagamma Studies , is predicted to grow from $230.1 billion in 2010 to between $299.3 billion and $305.9 billion in 2014, representing a 7% compound annual growth rate” (2013).
According to this chart, we could figure that MK has gradually and quickly improve its value in the short time, has become the major competitors by other brands, “Five luxury brands capture 75% traditional online market share and 68% mobile market share, based on 2013 YTD traffic to 52 sites in this study.
These are Ralph Lauren, Coach, Michael Kors, Louis Vuitton and Gucci” (2013).
In addition, currently, the MK brand is known for its producing high-quality products and also reflects on its suppliers that they work with. If some people, they cannot afford a handbag such as Louis Vuitton bag or Chanel bag, Michael Kors could provide an alternative choice for them somehow, which is cheaper but still with high-quality and various fashionable style.
“Since their stock market debut in December 2011, Michael Kors shares have nearly quadrupled. Last week, the company got the Wall Street equivalent of a well-reviewed runway show. The stock was added to the S&P 500. It's hard to find anything that's going wrong at the company right now. Comparable stores sales, a key measure for retailers, increased 23% in the quarter. Same-store sales at Kors have now increased for thirty straight quarters” (Yousuf, 2013).
The last and also important one element is that MK embodies its jet set lifestyle. This brand named by Michael Kors himself, this led put himself into the public spotlight and makes him be the ambassador of MK. This situation enable him has more chances to reach the viewer as well as the celebrities. For example Kim Kardashian and Michelle Obama are known for wearing MK. If people focus on those celebrities, they would focus on the handbag they wear either, even they want to own the same items as their favorite stars.
First weakness is common and widely happens on different brands. When the economy takes a turn for the worse, customers would consider more about their necessities rather than achieving its “jet set” lifestyle, such as they would probably quit high-priced handbags, watches, shoes, etc. The whole situations are all depend on habits of customers.
Besides, since the MK brand is known for its high class jet set style, and it’s also hard to find those items in the discount store, such as Marshall’s. So when the low income people visit those stores and figure out the items also show up in the regular store, they would probably buy it with the barging price. However, those behaviors would affect people purchase those items in the regular store and dilute their impression on MK brand. And those people who pay the full price may become skeptical and find another brand.
In addition, MK brand defines its brand by creating a worldly feel to customers. But standing the global view, MK is still much more relevant in United States than anywhere else in the world. So it is defined as an American brand more instead of global brand somehow. And facing the competition around the world, open more stores outside of United States is kind of difficult.
“MK are responsible for storing data relating to our customers andemployees and rely on third parties for the operation of oure-commerce website, michaelkors.com , and for the various socialmedia tools and websites we use as part of our marketing strategy”(2013). “However Michael Kors does not control these third-partyservice providers and cannot guarantee that no electronic or physical computer break-ins and security breaches will occur in the future” (2013).
MK manager is brilliant and he knows when is the best time to enter China market, which is the biggest market around the world. In the autumn time of 2013, MK hold a big fashion show in Shanghai, China, to officially enter China market, and this show had been prepared since 2011. MK immediately takes the big market share in China and quickly increases its awareness in China. It’s really a big chance for itself, but the key point is how to control it. After this, MK could constantly expand its market to other nation which is potential in the future, such as EU.
And, MK could purchases more brands to include in its portfolio. This behavior not only increase sales and profits, but also could increase more variety in this brand in order to better sharing the whole market, like the LVMH.
MK also could move a little bit concentration on Children’s and Men’s products. Currently, its collections do not contain children and men, which might be the key for company future growth.
In addition, Mk could be more attainable to the general population, which means extend its brand that caters to a lower budget people. Such as the automobile industry, Audi is the high-end of VW; however VW still manufacture other kind of vehicle for more general people, such as Golf, Jetta. This could allow those who cannot previously afford MK to get in on the overall brand feeling.
What’s more, “US and Canada e-commerce will be in-house and operational with a new site and platform by February 2014, with Europe to follow within a 6-8 month period, and Japan and China down the road. Finally, since 40% of the e-commerce site web traffic is driven by international viewers that the company currently can't ship to, bringing e-commerce in-house and developing these capabilities creates many more opportunities for market share gains down the road” (2013).
As we mentioned before, as each coin has two sides, enter China and EU market would bring profits and awareness for MK. But chances are always accompany with risks, nowadays, the European debt crisis is a terrible threat for all the brand development, when the economy turns down, people have no more money to spending the way they used to be. MK should immediately figure out a solution that the items and products of MK are still be affordable.
As we know, Coach as the major competitor by MK, still have a big market share in USA. MK still cannot look down the Coach, which is also a big hand-bag manufacture in USA after all. Not only for Coach, MK still has to facing more international competition, “During the company's earnings call Tuesday, Michael Kors CEO John Idol said the company is also aiming to do more in Europe. He said the company views some of its top competitors to be "two or three of the very largest global Italian and French luxury goods players" (Yousuf, 2013).
SWOT Analysis of Michael Kors Company. (2016, Sep 15). Retrieved from https://studymoose.com/swot-analysis-of-michael-kors-company-essay
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