CASE STUDY 2 1

Topics: Brand, Branding, Marketing Pages: 12 (1664 words) Published: May 29, 2015
Tiffany and Co Case study

Case Agenda

Is blue box packing a great strategy?
Given that spending in the luxury retail market has demonstrated resilience during and post recessionary times, how can Tiffany continue to grow? Will it be able to maintain a prominent brand in future?

Company History
Timeline
1837: Founded in New York by Charles Lewis Tiffany and John F. Young: The Blue Box introduced 1910-1940’s: 57th street and Fifth Avenue Flagship store
2000: Tiffany and Co. foundation established
They sell jewelry, timepieces, silverware etc using their key stores in high profile locations. 90% of their revenue is from jewelry. Out of 90%, 57% revenue is generated from their affordable line collection.

PORTER’S V FORCES

Competitive Rivalry
a) Market is fragmented with Tiffany having the second largest market share after Signet b) People can go to other retailers such as Cartier, Signet or Blue Nile c) Even the chain stores, like Costco is posing huge competition not because of cheap cost and good quality but also good return policy. Customers can get bigger carat diamonds of next to similar quality at half a price; the only difference is the brand and bi big blue box packaging.

Supplier Power
a) Few diamond suppliers in the world, so they have power to dictate prices. b) Moreover they do diamond cutting and polishing on their own

Buyer Power
a) Buyers have high disposable income
b) They feel connected with the brand
c) Able to choose from retailers and easily switch, so emphasis on experience

Threat of Substitutes
a) When buying engagement rings, there are few substitutes
b) When buying other designer pieces and accessories then wide range of options and retailers.

Barriers to Entry
a) High cost of capital to start a luxury jewelry business
b) Consumers likely to shop from a brand that they know

Analysis of external factors

Political: Government plays a key role in mining practices, so there is an ease in getting raw material at cheap prices.

Economic Factors:
a) Asian markets are growing extensively especially China. It is the fastest growing and second largest luxury market in the world. b) America is the largest diamond market followed by China.

Social factors:
a) Spending on luxury goods has increased
b) Brands are more important to customers than products.

Technology:
All jewelry designers use Computer Aided Design

Analysis of Internal factors: Resources

Intangibles:
Brand name and image i.e. high quality, sophisticated, classic Moreover their CSR activities add to their image.

Human Capital:
a) Sales training
b) Design team, which includes leading designers Elsa Peretti, Frank Gehry and Paloma Picasso.

Tangibles:
a) Inventory
b) Real Estate
c) Prestigious store locations
d) Metal and gemstone mines.

Core Competencies and Competitive Advantage
Core Competencies
a) Design and innovation
b) Marketing and excellence
c) Brand development
d) Customer service
e) Quality and craftsmanship
f) Distribution

Competitive Advantage
a) Product differentiation
b) Brand loyalty
c) Online retail presence

SWOT ANAYLYSIS OF TIFFANY
Strengths

Majority in-house production
(60% production and 70% diamonds sourced directly from mines) Strong brand in the highly fragmented market
(2.1% market in the real jewelry market and ranks 2nd in market share) Strong direct selling channels
(21.7 M catalogues in the US in 2006 and 0.7M sales via telephone, internet or US mail) Broad offerings
(About 3,500 products-jewelry, timepieces, sterling silverware, china, crystal, fragrances, stationary, precious and semi-precious stones, titanium etc.) CSR initiatives
(Bristol Bay Protection Pledge to preserve salmon fishery and surrounding wilderness and uses 100% recyclable paper and blue bag etc) Weaknesses

No Promotion model
(Average engagement price range $10,000 three times the market average,...
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