Tiffany & Co is a company with a strong brand name and famous for its luxury goods. The company was started in 1837 by Charles Lewis Tiffany and John F. Young. They opened a store in New York that was intended to sell Stationery and costume jewelry. In 1845, the store began dealing in high-quality silver pieces, which up to now remains its specialty. Later in 1853, the company was renamed to what is now Tiffany & Co.
specifically for you
for only $16.05 $11/page
Over the years, the company became strategically tied to the political leadership in the country, which contributed to its immense growth and success. After a fall in profits during the great economic depression, the new management changed tact by getting rid of goods it deemed unworthy of its reputation. They cleared goods such as diamond rings for men, leather goods, silver plate, and antiques. In turn, new products were introduced (Haines, 2010).
The products were of high quality but at a lower price. The change of tact was immensely successful, stretching to 1978 when it was sold to Avon Products Inc., a world-leading manufacturer of cosmetics. Avon later sold the company in 1984. The new management embarked on regaining the high image. The company became a public corporation in 1987. This strategy helped the new management to introduce new products, which include fragrances, silk scarves, handbags, and briefcases, among others. They also opened new stores in London, Zurich, and Munich. Tiffany & Co continues to enjoy a strong brand name and customer loyalty, which accounts for its large growth and strength even in the face of the economic downturn (Haines, 2010).
For the company to continue to enjoy growth, the management should consider certain alternatives. Tiffany & Co should review its strategies to embrace such values as operational excellence, customer intimacy, and product leadership. For operational excellence to be upheld, the company must modify to keep with the changing economic fortunes in the local and international markets. However, this must be a delicate balancing act. The jewelry market is hinged on exclusivity and luxury. While introducing affordable items to the middle-class market will increase sales, it is bound to turn away the high-end market to competitors.
The opportunities that the company can undertake to achieve operational excellence include expansion in retail outlets, increasing online sales, growing the men’s market, and introducing a new business venture. It is necessary to note that, with the changing economic climate, the traditional market will continue to shrink as the government seeks to end cuts previously enjoyed by high-income earners (Damassa, Hyder, and Wilcox 2007).
The brand of the company has placed the company above its competitors. The brand name of the company is strong in the global markets. Therefore, the management should embrace their customers. The company has introduced a new plan to open stores in the USA. According to Damassa, Hyder, and Wilcox (2007), such a plan that focuses solely on low-priced products may hurt the brand beyond repair and cripple long-term sales. The smaller store format enhances customer enhances. Damassa, Hyder, and Wilcox (2007) propose that Tiffany & Co should consider opening stores in new markets instead of focusing too much on the US and Japan markets.
On product leadership, the company continues to face competition. It is noteworthy that the brand name continues to be the most valuable asset for Tiffany & Co. To achieve growth, the company should consider ways of maintaining that brand. The company may consider hiring more famous designers and introducing more high-end products to keep up its brand name.
100% original paper
on any topic
done in as little as
Tiffany & Co may also adapt generic strategies to achieve maximum growth. These strategies include differentiation, low-cost leadership, and focusing on their cost or differentiation strategies (Pearce & Robinson 2006). With the threat of fake products and imitations, Tiffany & Co should adopt the strategy of differentiation. It must be such a recognizable brand that no imitator can pose any challenge to its brand.
In 2005, research shows that 90% of the items sold under the Tiffany & Co label on eBay were counterfeit (Damassa, Hyder and Wilcox 2007). It is prudent to boost efforts to strengthen product name and authenticity. Another generic strategy could be low-cost leadership. However, as discussed earlier, such a move should be made careful not to hurt the brand name in the long term. The company should consider opening stores that deal exclusively with affordable but high-quality items to reach the lucrative middle-class market. To avoid confusion and loss, the company may open the stores under a different name.
The company may also consider the focus strategy, which is the most suitable for Tiffany & Co. Botten and McManus (1999) assert that it is better to focus on a narrow market, serve it perfectly than to target the broad market. However, this strategy has its own disadvantages in that the company may not make enough profits in the short term, thus making it harder to survive the recession. In addition, the target audience may no longer be different from the rest of the market, especially in these hard economic times. The competition may also pose a challenge by filling the market gap that would occur if Tiffany & Co was to focus-strategies.
Tiffany & Co is a strong brand and should continue to do what it does best. Among the grand strategies that will best help Tiffany & Co achieve maximum growth include concentrated growth, market development, product development, innovation, integration, and concentric diversification. It is best if Tiffany & Co continue to do what it does best- the production of luxurious and exclusive goods.
The company should introduce more of such high-end products for both their local and international markets. Many resources should be put in to ensure that in the long term, Tiffany & Co will retain its brand name. As the US market is fast becoming saturated, the company should strategize on market development in new areas such as Switzerland, Germany, and South Africa. Integration is another essential strategy; given its advantage as a market leader, the company should consider integration, either vertically or horizontally, to help tame competition.
In conclusion, Tiffany & Co remains a well-placed company with an admirable pedigree. However, to survive the changing economic environment, the company should adopt some new strategies and value disciplines. The greatest threat facing the company is the loss of status. If the company is to introduce stores exclusively for the low-end market, then it should be extremely careful of the impact that will have on the long term sales. The most feasible step that Tiffany should consider is a focused strategy on its high-end market, which guarantees good returns in the long run.
Botten, N. & McManus, J. (1999). Competitive strategies for service organizations. West Lafayette, Ind: Ichor Business Books.
Damassa, S. Hyder, Z. Wilcox, J (2007). Strategic Report for Tiffany & Company. Web.
Haines, R. (2010). Vintage wristwatches. Iola, WI: Krause.
Pearce, J. A., & Robinson, R. B. (1997). Strategic management: Formulation, implementation, and control. Chicago: Irwin.