Retail Industry - Research Paper Example

? Retail Table of Contents Introduction 3 History 4 Corporate Stakeholders 5 The Role of the Industry in Its Social, Economic and Political Setting 7Domestic and International Ethics 8 Ecological and Natural Resources 10 Social Issues 11 Rating of the Industry’s Overall Social Responsiveness and Its Accomplishments in Retail Segment 12 Rating of the Industry In Relation To the Saint Leo University Core Values 13 Conclusion 15 References 16 Introduction The retail industry is flourishing all across the world. It is expected that the retail industry in the United States of America will be administering the similar trend of growth in future as well. There are wider benefits, which the retail industry of America offers to the people. One of the significant benefits is evident in the form of employment opportunities (Economy Watch, 2012). There are numerous retail organizations in the United States of America. Coach, Inc tends to deal with luxury leather based goods and is situated in America. It initiated as a small leather goods company and in the present times the company is popular for its ladies handbags as well as other items such as luggage, wallets, novelty accessories and briefcase among others. The main focus of the study is to comprehend the history of the chosen retail organization i.e. Coach, Inc. The study further progresses with the identification of the corporate stakeholders and responses to their issues. It will also attempt to offer the role of the retail industry in its social, economic and political setting. The domestic and the international ethics along with the ecological as well as natural resources affecting the company will be discussed in the paper. The retail industry might confront numerous social issues which need to be paid due attention. Therefore, the paper will try to throw light upon the social issues faced by the company i.e. Coach Inc. The paper will endeavor to rate the industry’s overall social responsiveness and its accomplishments in the retail sector and will also attempt to rate the industry in terms of Saint Leo University’s core values. It will try to suggest changes that need to be made to be more in line with the core values of the Saint Leo University. History Coach Inc. was initiated in the year 1941 in the New York City. It was formed as a partnership named as Gail Manufacturing Company. Gail Manufacturing Company started as a family-owned business possessing that used to prepare small leather-based goods such as wallets as well as handbags. It was in the year 1946 when Miles Cahn as well as his spouse Lillian entered into the company. Both Miles Cahn and Lillian were the proprietors of the leather handbag producing company and they had good information regarding the leatherworks as well as business. It was by 1950s when Miles Cahn took over the business and operated it himself. During 1960s, Miles Cahn identified the different properties belonging to leather utilized for making baseball gloves. Miles Cahn recognized numerous ways of processing leather so that it can be made stronger as well as flexible. The company began preparing numerous handbags in order to complement the factory’s small margin in wallet manufacturing. The brand name given to the purse was Coach. It was during the 1960s when Miles Cahn recruited Bonnie Cashin to work for Coach. Before joining Coach, Bonnie Cashin was a renowned fashion designer. This deal proved to be the most renowned business alliances. Bonnie Cashin was there in the company from the year 1962 to 1974 and thus made alteration in the design of the bags. It was during the mid 1970s when the manufacturing of the handbags was shifted away from New York City to some other place in the United States. It was during the same period when the name of the company was changed to Coach Products, Inc. The company recorded strong business during the 1970s as well as 1980s and the company as well evidenced good demand for its products, it initiated a mail order system. Gradually, the company restricted its sales to hand-selected vendors. The name of the company was altered again in the 1980 to Coach Leatherware Company, Inc. It was during 1985 when Cahn decided to sell off the company to Sara Lee Corporation because Cahn’s children were not interested in handling the family business. New boutiques were started in Macy’s stores in two places namely New York and San Francisco. The company also decided to come up with the store in Seattle as well as Denver and it also decided to come up with similar stores in numerous other departments. It was noted that at the end of 1985 the company operated nearly 12 stores and 50 boutiques within departmental stores. Sara Lee de-associated herself from Coach by selling 19.5% of their shares at the Coach IPO in October 2000. In April 2001, she distributed the lingering shares to Sara Lee’s stockholders via an exchange offer (Texas Tech University, 2012). The distribution, quality control operations as well as product creation of Coach, Inc are spread across the United States, Japan, China, Italy, Hong Kong and South Korea. It is worthy of mentioning that Lewis Frankfort has been associated with the company for nearly 30 years. He is known to make Coach Bags affordable. By the year 2011, there have been approximately 500 stores of Coach in the United States as well as Canada. It has been expected that the number of stores would increase by end of the year 2012 (Coach, Inc, 2011). Corporate Stakeholders It is worthy of stating that the main stakeholders of Coach Inc include customers as well as investors. The customers tend to have a tremendous impact upon the way business is conducted. They are considered as one segment that can influence the sales and thus generate advertisement by means of word-of-mouth. It is by means of reaction of the customers towards the product, the company is capable of making future decisions. On the other hand, the investors are the groups who assist by committing financially to the needs of the company (Lemon & Gavin, 2005). The business of the company i.e. Coach Inc is performed by its employees, managers and officers who are supervised by the Chief Executive Officer so that the long-term value of the company can be improved. It is the responsibility of the stockholders to choose the Board of Directors in order to handle management of the company and to serve the interest of the stockholders (Coach, n.d.). Coach has a limited number of competitors. The company’s customers tend to possess a specific emotional link with the brand. Customers’ feedbacks play a vital role in the company since it assists the organization at locating the loopholes in the products and thus offer it the scope to improve the quality of the products accordingly (Texas Tech University, 2012). The designers of the company’s product are endorsed by a strong merchandising team that evaluates sales, consumer preferences as well as market trends in order to determine the business opportunities. The products of the company are produced by the independent manufacturers; however Coach, Inc tends to maintain control over the supply chain mechanism. It is to be mentioned that a few of the imported products of Coach need to face potential duties, tariffs or quotas which tend to restrain the quantity of products that the company can import to the United States. The company also is subjected to foreign government regulations as well as trade constraints along with reprisal against certain forbidden foreign practices regarding its product sourcing as well as international sales operation (Coach Inc, 2011). The Role of the Industry in Its Social, Economic and Political Setting The retail industry pays due attention towards the sales of goods as well as merchandise from any particular location for the purpose of direct utilization by the purchaser. The United States is the home for most of the biggest retailers of the world because it dominates the global retailing industry. The retail sector contributes to two-third of the US GDP and most of the retail stores of the country have made their presence in numerous other countries as well (Timberlake, 2012). It is expected that the retail sales development in United States will turn down by 3.4 percent in the year 2012 because of the persistent housing slump. According to Washington-based National Retail Federation, the total sales obtained from the retail sector are expected to be US$2.53 trillion by the end of the year 2012. It is significant for the government to assist the retail industry of the United States by minimizing the corporate tax rates from about 35 percent to nearly 25 percent which is generally enjoyed by the companies in the countries belonging to Organisation for Economic Co-operation and Development (Timberlake, 2012). It has been observed that approximately ten percent of the national labor of the United States is employed in the retail sector thereby presenting career opportunities for the young people as well as seniors. Consumer spending assists in determining the US economic growth as well as the growth rate of the retail sector (Pomoni, 2011). Hispanics are considered to be the quick-growing segment of the labor force and are significant part of the retail industry’s workforce thereby filling numerous occupations in the field (NCLR, 2012). In the United States, the labor force is growing quite slowly and is becoming elder and more assorted by its nature (Bureau of Labour Statistics, 2012). It has been noted that alterations in the regulations impact the ways in which the retail sector operates their business. According to the forecasts by PricewaterhouseCoopers (PwC), it has been observed that there is growth in the multi-culturism in America and thus by the year 2015 the US population is expected to be more diverse (PwC, 2012). Domestic and International Ethics The products of the Coach, Inc are sold to global wholesale distributors as well as authorized retailers. The company has created good relation with the particular group of distributors whose main task has been to sell the product of Coach, Inc through department stores as well as self-supporting retail locations in various countries. The company’s current network related to international distributors tend to serve numerous markets such as Saudi Arabia, France, Hong Kong, China, Bahrain, New Zealand, the United Kingdom and Vietnam (Coach, Inc., 2011). The management of Coach, Inc believes the fact that there is huge growth opportunity in numerous countries such as Western Europe, Greater China as well as other countries such as Korea, Russia, Singapore as well as Middle East markets. Although the company identifies the fact that square footage growth opportunity persists in the North American full price channel, however, it is believed that there is high opportunity in Greater China region (Coach, Inc., 2011). It has been noted that the company has implemented a code of ethics known as the Coach Global Integrity Program. The main objective of the program is to convey to the Coach officers, employees as well as directors the main principles of performing the business operations. The employees and the officers of the company are anticipated to attend the training program on business ethics that is conducted by the company (Coach, Inc., 2011). In order to meet the obligation of the company under the California Transparency in Supply Chains Act, it was noted that Coach, Inc devoted significant resources for the purpose of researching and complying with the law. Along with the employees of the company, Coach, Inc recruits independent third party auditors who on a regular basis undertake unannounced visits to the Coach manufacturing locations and thus offer Coach with complete report on the living and working context of the people associated with the company (Coach, Inc, 2012). The company plays due attention to the conduct of international business operations in a way which comply with the standards of conduct of that particular country in which it is operating. Coach Inc realizes the fact that in order to be successful in both the domestic as well and international market, it must meet the interest of the stakeholders. Ecological and Natural Resources The most significant environmental issues for the retailers are related to cost as well as availability of water, energy as well as disposal of waste. The federal policymakers are quite apprehensive regarding the impact of manmade Carbon Di-Oxide (CO2) emissions upon the global climate change. Therefore, Congress is taking several initiatives in order to reduce CO2 from the United States sources (Parfomak, 2008). Coach, Inc makes use of leather in order to prepare shoes, handbags and other leather related products. Coach handbags for women are prepared from sturdy cowhide whose quality is quite superior to the skinny leather fixed over cardboard substance that is utilized by the company to prepare other handbags. In order to operate effectively, it becomes significant for the company to meet Environmental Protection Agency (EPA) waste standards on three main grounds such as liquid, solid and air. It was in the year 1985, when the EPA developed certain standards for the purpose of monitoring pre-treatment of the liquid waste which is discharged by the tanners indirectly to publicly owned waste treatment facilities. If Coach, Inc abides by the above standards then it can keep itself away from any environmental issues and thus can attain competitive advantage. Such regulations has led to comprehensive and complex system of laws covering clean water, clean air, waste disposal and contaminated land clean-up. It assists in reducing the negative impact of the leather industry on the environment (Cengage Learning, 2012). Social Issues The demand for the luxury goods in the United States is surmounting with the pace of time. It has been anticipated that the global luxury sales growth would be 5% - 6% in the year 2012 and 2013 (The Guardian, 2011). The consumers are expected to make high end products purchase as they search for the most unique product. There will be greater demand for luxury items by high-end consumers. In order to reach new customers Coach Inc tends to survey more than sixty thousand customers in a year which is generally a customer-centric method that assist the company to respond to the challenges that it faces on a regular basis (Cornell University, 2012). A new line of handbags is manufactured by the company which has a lower-price point and tends to target “younger-in-attitude” consumers. The company is highly analytical and thus has a good knowledge regarding its customer base (Cornell University, 2012). Coach Inc is considered as the brand that has been successful at becoming the symbol of aspirations for American consumers and the consumers are ready to pay for certain indulgences if they feel that the price of the product is right (Rosenbloom, 2008). Rating of the Industry’s Overall Social Responsiveness and Its Accomplishments in Retail Segment The retail sector of the United States aims to attain Energy Star certification for nearly 75 percent of its sites by the end of the year 2015. It has been observed that the Home Depot’s in making efforts to minimize its environmental footprints intends to utilize local materials, generate control at stores as well as use native plants. Such initiatives are sampling of the environmental efforts as explained by Retail Industry Leaders Association in its first sustainability reports among few biggest retail companies in the United States. It can be stated that retail industry is generally dependent upon too many internal as well as external stakeholders such as suppliers, local governments, customers, landlords, different stores as well as social and environmental advocates. Therefore, it is quite crucial for the retailers to work in cohesion with all of the stakeholders listed above so that it can succeed in terms of business as well as sustainability. It has been observed that the retailers in the United States are working closely with the stakeholders in distinct sectors so that it can attain sustainability goals. They are further focusing more upon transparency in their operation as well as in the supply chain initiatives. The retail industry of the USA is found to be generating numerous systems so that it can develop a culture of continuous developments by driving together controls, management tools and information technology (IT) systems. The retail industry of the United States identifies sustainability as not only being one of the core values but as a significant component for the success of the retail success. The retailers in the United States are examining their direct stores, supply chain operations as well as distribution centers in order to uncover cost-savings as well as labor enhancing opportunities. The retail industry of the United States is emerging to meet the altering needs and demands of the communities. The customers are becoming greatly aware of the social as well as environmental impacts (Guevarra, 2012). It can be deciphered that the retail industry of the United States has made significant progress in terms of social responsiveness and is attempting to bring significant improvements with the pace of time. Therefore, the US retail industry can be rated as good in terms of social responsiveness and the accomplishments in the related sector. However, it can be stated that the industry needs to make attempts in order to keep growing. Rating of the Industry In Relation To the Saint Leo University Core Values The retail industry of the United States needs to be rated according to the six core values of Saint Leo University which include excellence, respect, community, personal development, integrity and responsible stewardship (Saint Leo University, 2012). It has been observed that in the United States at least one retail company among all public as well as privately-held multi-unit retail chains is awarded for the excellence of its leaders as well as retail accomplishments during the annual convention of National Retail Federations (Newegg, 2012). It can be analyzed that the retail industry is quite competitive since the companies need to locate a way to continuously capture the market share in marketplace which is continuously altering in order to meet the tastes of the people of community. It is quite crucial for the retailers of the United States to adapt because it is the most vital aspect for their success. By respecting the values of the stakeholder the retailers are capable of gaining competitive advantage. It is because of the fact that the retail industry of the United States is booming, it offers tremendous opportunities to the retailers for personal development. By means of personal development the employees are capable of serving the society in a responsible way. The retailers in the United States are expected to deliver excellence in its sector and are expected to live the company’s mission and thus maintain integrity. In this note, it can be stated that the retail industry ranks good in terms of core values. It further needs to pay due attention towards social cohesion so that the retail industry can become the best place to work in for the people (Saint Leo University, 2012). Conclusion Retail industry of the United States is flourishing quite rapidly. However, there are several internal as well as external factors that tend to impact the successful operation of the retail sectors in the United States. It is quite significant for the companies that are operating in the industry such as Coach Inc to prepare their strategies in order to fight the challenges that they face from the internal as well as external agents on a continuous basis. The strategies must be designed by paying due attention to ethical standards. The code of conduct must be such that it does not harm the operations of its stakeholders. Furthermore, in order to succeed in the particular sector, the retail industry needs to be socially responsible. These aspects can ensure a sustainable growth for the retail industry and a company operating in the industry i.e. Coach Inc in the long run. References Bureau of Labour Statistics. (2012). Overview of 2010-2020 projections. Retrieved from http://www.bls.gov/ooh/About/Projections-Overview.htm Coach, Inc. (2011). Annual report 2011. Retrieved from http://www.sec.gov/Archives/edgar/data/1116132/000114420411048771/v228306_10k.htm Cornell University. (2012). Coach, Inc.: Introducing a luxury brand to new market. Retrieved from http://www.ilr.cornell.edu/cahrs/hrSpectrum/Mar-Apr10-Coach-HR-Profile.html Cengage Learning. (2012). Leather tanning and finishing. Retrieved from http://business.highbeam.com/industry-reports/textiles/leather-tanning-finishing Coach, Inc. (2012). California transparency act. Retrieved from http://www.coach.com/online/handbags/genWCM-10551-10051-en-/Coach_US/CompanyInformation/CorporateGovernance/CANotice- Coach. (n.d.). Coach, inc. corporate governance principles. Retrieved from http://www.coach.com/doc/COACH_CorporateGovernancePrinciples.pdf Coach, Inc. (2011). About us. Retrieved from http://world.coach.com/flash.aspx#/aboutcoach/story Economy Watch. (2010). Retail industry. Retrieved from http://www.economywatch.com/business-and-economy/us-retail-industry.html Guevarra, L. (2012). Retail group's first sustainability report puts green lens on industry. Retrieved from http://www.greenbiz.com/blog/2012/01/26/retail-groups-first-sustainability-report-puts-green-lens-industry Lemon, D., & Gavin, T. (2005). Coach, Inc. Retrieved from http://ecom.umfk.maine.edu/danalemon.pdf NCLR. (2012). No bargain for low-wage workers. Retrieved from http://www.nclr.org/images/uploads/publications/Monthly_Employment_Jan2012_Retail.pdf Newegg. (2012). Award/ ranking. Retrieved from http://www.newegg.com/Info/Awards.aspx Pomoni, C. (2011). A look at economic factors that affect retail sales. Retrieved from http://www.helium.com/items/1597780-a-look-at-economic-factors-that-affect-retail-sales PwC. (2012). Retailing 2015, new frontiers. Retrieved from http://www.pwc.com/en_US/us/retail-consumer/assets/retailing_2015.pdf Parfomak, P. W. (2008). Carbon control in the U.S. electricity sector: key implementation uncertainties. Retrieved from http://www.fas.org/sgp/crs/misc/R40103.pdf Rosenbloom, S. (2008). Coach reports a profit, but is cautious on outlook. Retrieved from http://www.nytimes.com/2008/07/30/business/30retail.html?ref=coachinc Saint Leo University. (2012). Mission and values. Retrieved from http://online.saintleo.edu/about-us/mission-values.aspx Texas Tech University. (2012). Analysis of coach inc. Retrieved from http://mmoore.ba.ttu.edu/ValuationReports/Coach.pdf Timberlake, C. (2012). U.S. retail sales growth will slow to 3.4% this year, NRF says. Retrieved from http://www.bloomberg.com/news/2012-01-16/u-s-retail-sales-growth-will-slow-to-3-4-this-year-nrf-says.html The Guardian. (2011). Luxury goods market back on track. Retrieved from http://www.guardian.co.uk/business/2011/may/03/luxury-goods-market-back-on-track Read More