Bu426 Notre Dame Vera Bradley Case Study

CASE 6

BU 426

Notre Dame College

March 3rd, 2019

Summary

Vera Bradley has created colorful and patterned handbags, luggage’s and accessories for woman. This company started off of an idea of wanting to create a stand for business woman. Woman should not have to carry around the old boring and plain luggage or handbags. They should be able to go to work or travel in style to make their outfits pop.

The brand became popular and quickly grew in the market. They created a great strategy by differentiating themselves from other handbag companies. There colorful and unique patterns is what caught the attention of many valuable customers and made them different from other brands. Vera Bradley has proven they continued to wow their customers by coming out with different patterns relating to the new seasons. They were never afraid of stepping outside of the box and going crazy with the colors.

Although they did suffer with the economic decline, there are certain actions that had to been taken for them to continue to stay on top of their game. With every brand or company comes strengths and weaknesses. As everyone knows, Vera Bradley has proven their strengths are their unique designs as well as their patterns. Their weaknesses are just those other high-end brands competing right beside them. But, at the end of the day what Vera Bradley has against all the other brands is that they are not the normal luggage or handbags, so it attracts a completely knew crowd. Those women or men who always want those fun and outgoing handbags and even new customers wanting to step outside of their comfort zone.

Overall, for the fact that Vera Bradley was a come up from a talk between two friends at an airport, it has definitely shown what it is worth and that it has become very popular.

Questions 1-6:

1. Vera Bradley has a well-defined strategy, looking at their situational analysis it is easy to understand that they have a differentiation strategy, as a company and looking at their product they want to be different from their competitors such as Michael Kors, Coach, etc., they want to make quality line, with better quality products, the strategy is characterized by better product under the quality aspect, but the company has lesser number of selections and products keeping high standards of quality.

2. Vera Bradley has a core competencies not distinctive competencies and unique compare to other design companies. Their core competencies are in selling, merchandising, and designing. They never bother are never afraid about the aggressive new designs and colors by their competitors because their patterns are unique and different. These also include the unique ability to quickly come out with colorful bags, change lines according to change of season. Ability to change lines of fabrics very quickly and to be able to turn out new patterns, customers, and designs.

3. Vera Bradley has a lag of financial growth with economic decline, and they can’t pull through more customers. Even though their brand image over high-quality material, they need to find the balance to cut costs and maintain their quality.

Strengths:

• Development of E-business
• Large product variety
• Large following of female customers
• Unique patterns
• Financially, they have no long-term debt, very liquid
• Brand recognition

Weakness:

• Fabrication of items in China
• Distribution channel need to look at
• Poorly defined strategy

Opportunities:

• Providing new product lines, “power” bags for powerful business women
• E-commerce
• People are traveling more
• Go global

Threats:

• Cost of fabrication
• Unconventional style industry
• Customer certainty and spending
• Knock-offs
• Their line is dictated to vacation, beach. Not to women trying to elevate themselves to the upper level
• They are not quite as strong as their competitors from a name standpoint
• Their financials are starting to get weaker

4. The three fiscal years 2011, 2012, and 2013 show an increase for what concerns Vera Bradley’s net revenues. However, they began decreasing in the following years 2013, 2014 and 2015. Personally, I believe that since the competition with successful brands such as Kate Spade, Michael Kors and Coach has grown in the last few years, Vera Bradley has experienced some issues in increasing their revenues. As shown, as revenues fell, net income has gone down in the years 2013-2015 compared to where it was in 2011, 2012 and 2013. Vera Bradley’s recent years financial statements seem to show that 2013 was their most successful year, experiencing a downhill in the years right after it. In the foreseeable future, I consider there will be a rise in demand for more prestigious brands, Vera Bradley should focus on improving their luggage manufactory instead of their purse line because Michael Kors and Coach seem to be dominating that specific market.