Great companies thrive due to a fully formed strategy. The hallmark of the Tiffany& Co. strategy is that of Focused Differentiation. It is a strategy that focuses on a particular niche target market, in this case, the wealth of society. It is the uniqueness of the product that keeps customers coming back. This specialness can originate out of superior customer service, stunning product features, and attributes, or outstanding reputation, tradition, and longevity in the niche market.
Tiffany & Co.’s strategy reaches only to a select group of wealthy and affluent consumers who appreciate high quality. The little Blue Box is a token every customer after making a purchase. This token is Tiffany & Co.’s pledge to continue to satisfy customers who are inclined to the finer things in life: High Society so to speak. These customers will disregard the low-cost substitute products for the unique look and feel of the real deal.
The Strategy that is most responsible for Tiffany & Co. is the focused differentiation strategy. Tiffany & Co. uses the strategy to establish itself as one of the prominent jeweler retailers in the world. Founded in New York City in 1837, Tiffany & Co.’s reputation in the marketplace is solid with stores in Europe as well as the Asia-Specific region. Since its reputation for selling fine jewelry, the retailer’s reach has resulted in sales totaling up to $3 billion. In its 175 years of existence, it has made a tremendous on the jewelry industry worldwide.
The purpose of Tiffany & Co.’s strategy is to maintain a superior brand. Without this determination, the retailer will lose its unique niche market to other competitors.
Therefore, it must continue to present to the customer with nothing less the most superior diamonds, a perfect 4C selection.
In order to uphold the status, power, and perfection that its customers expect Tiffany & Co. must not waiver in its determination, regardless of the state of the economy or of rivals offering genuine substitutes at a lower cost. Tiffany’s brand and tradition speak for itself. And a great organization stands its ground.
To stay on top of the mountain, an organization must build upon what has gotten it to the top. Any deviation from a winner strategy will mean the loss of identity as well as customers to the charms of a competitor with similar taste.
The mountaintop is there for Tiffany & Co. as long as it stays loyal to the brand is established in the 1800s. Great organizations go under because they are intimidated by a change in the marketplaces. The lower cost, stop training employees and shut down stores. However, Tiffany & Co. wasn’t destroyed to abandon ship during the recession of 2008. Instead, it of lowering its prices it raised them, offering its customers an opportunity to identify with affluence even it bad economic time. The risk was worth it. Their strategy sustained them.
Going Forward: SWOT Analysis for Tiffany & Co.
Tiffany & Co. unique strategy gives them the ability to seize market opportunities and nullify many external threats. The sign of a great organization is its ability to remain king of the mountain by taking advantage of opportunities for growth and expansion while also building up a strong competitive defense against rivals.
Entering into New geographic markets
Tiffany & Co. popularity and potential for wide world reach will in able it to take advantage of new geographic markets. It already has stores in both China and Europe. It’s a commitment to superior style and quality has made the difference in sales growth and prestige.
Committing to an Ever-Expanding product line
Tiffany & Co. will have to continue to expand their product line as the opportunities arise. The Jewelry giant has always possessed an attractive product line, including “key chains, eyewear, leather goods, scarves, tableware, vases and a selection of other items. Tiffany & Co. continue growth in revenue will allow it to select other unique products as well as partner with other unique companies that sell prestigious items.
Taking Advantage When Trade Barrier Falls
Tiffany & Co.’s will also be able to enter into other lucrative foreign markets as its expanding, worldwide influence continues to grow. As the trade barriers fall among foreign markets such as Cuba, the organization will be able to introduce its brand to the affluent within these markets. Tiffany & Co.’s popularity and longevity in the jewelry industry will trigger trust and partnership in business with new retailers in other countries.
Increasing intensity of competition among industry rival
Because of Tiffany’s & Co. unique strategy, it will be hard for rivals to duplicate what it is doing in the marketplace. The unwillingness to let the customer down and then refusing to go with jewelry products that do not meet the highest quality will keep rivals at bay. Although non-traditional retailers or one-stop-shop stores might at times have a slight impact on the sales growth and profits of Tiffany & Co., these stores will not be able to attract the consumers that prefer quality and brand over price.
The occurrence of Adverse economic conditions
Tiffany & Co. know how to waiver adverse economic conditions. It came out a winner last time. Therefore experience counts. By expanding its product lines and raising its prices to keep up with the rising prices of gold and other precious metals, the company knows how to rebound from bad economic times.
A shift in buying needs and taste away from industry’s product
Expanding its product line was the key to meeting the shifting needs of customers. Tiffany & Co. has a large array of new products and accessories to accommodate its jewelry collections. This is the way to go as trends come and go according to consumers’ needs and desires. Furthermore, in order to reach a broader market, Tiffany &Co, has even invested in some lower cost products without jeopardizing its name brand products.
The strength of Financial Performance
The financial performance of Tiffany & Co. is the hallmark of success. An indication of this is determined by the company’s EBIT margins. The statics show tremendous growth from 2006 to 2011. In 2006, Tiffany’s overall annual revenue was $1, 560.9, but in 2011, Tiffany & Co. revenue was up 18% or $1 764.2.
The statistics show a dip in financial revenue in 2009 and 2010, but a rebound in financial profits in 2011. Obviously, Tiffany’s success doing the recession of 2008 and its gradual recovery proves that it has a winning strategy for sustainability doing rough times.
Competitive Strength for Longevity in the Industry
Because of its ability to bounce back from an adverse condition and its ability to adapt to changing trends, the Tiffany & Co.’s is well suited to defend its position in the industry. Its reputation and image in the marketplace speak for itself. With a strong rating, superior product, quality performance, and strategy, which cater to the affluent, Tiffany & Co. will have the necessary resources to continue to uphold its market share.
Resolving Current Issues: Matching the March of the Competition
Although Tiffany & Co. has been successful in adverse economic condition due to its outstanding strategy, it must address issues that might become a problem in the near future.
Tiffany & Co. doesn’t have to change its method of operation, which has been a model of success since its inception, but it must strive to maintain its dominance in the marketplace. It must be aware of the Blue Nile Inc. strategy, an industrial giant which dominates the internet in Jewelry sales and accessories. As consumers become more inclined to shop online, even for top of the line Jewelry, traditional brick and mortar retailers may begin to suffer. In order words, Tiffany & Co. must increase its presence on the web.
Investing in websites that promote that will promote Tiffany & Co’s brand will have the potential to reach a wider market. This shouldn’t be entirely difficult since the Tiffany & Co.’s image is a well- known entity among the affluent of the world. Tiffany & Co. must cling to this new mission and match the march of the competition in the area of cyberspace. With the strength of its resources, superior commitment and track record of success Tiffany & Co. must adapt its strategy to building its brand on the World Wild Web.
Recommendations for Future Development
The economy always operates on an air of uncertainty. The unexpected can happen without warning. The next wild world disaster of a financial crash can send the economy into a whirlwind. In this case, retailers must be prepared to thrive in such trying times.
When interruptions in the economy occur, retailers and organization must have a plan B. The greatest preparation is to not go at it alone.
To prepare for an ever-changing economy, Tiffany & Co. must continue to, not only increase its product line but also engage in stronger partnering for the future. Strong partnerships with the right companies will further strengthen company’s ability to invest in new geographic areas and reach new customers. In addition, Tiffany & Co. must adapt to the Millenium generation, including their taste, culture, and ideas.