Tiffany Case Study

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A.Current Performance:
Currently, Tiffany’s competitors’ aggressiveness in the industry is taking a toll on Tiffany’s stock price. From a high of $41.38 per share in January 2003, Tiffany’s stock price went down to $23.06 per share as of March 2003. The decline was due to many factors such as competition, economic recession, and SAR epidemic. Working capital and the corresponding current ratio were $612,978,000 and 2.8:1 at January 31, 2003, compared to $667,647,000 and 3.0:1 on January 31, 2002. Tiffany suffered a loss in 2001 due to economic conditions, especially post- September 11 results. B.Strategic Posture:

From the beginning, it was clear that Charles Tiffany’s vision of establishing the grandest preeminent house of design and the world’s premier jewelry house, his vision has held true even over a century later. Mission: Tiffany is a retailer, designer, manufacturer, and distributor of luxury fine jewelry. It is known for its quality, craftsmanship, value, price, and brand. Its quality is nearly perfect, with minimal flaws. Their objective to provide strong and superior quality, craftsmanship, and value attributes to customers. Strategy is to place investment in Aber Resources that would help Tiffany secure a portion of its future diamond needs, giving it control over some of the resources. While tapping into potential markets might have been a big step, building brand image and brand recognition were very important when dealing with international markets. One of the much appreciated policies of the company is that customer who purchase from online are able to return at the real stores. II. CORPORATE GOVERNANCE

A. Board of Directors

1. Currently, there are nine Board of Directors at Tiffany & Co. a.Three internal members – (1) Michael J. Kowalski (Chairman of the Board of Director and CEO), (2) William R. Chaney, and James E. Quinn. b.Six external members – Rose Marie Bravo, Gary E. Costley, Abby F. Fohnstamm, Charles K. Marquis, J. Thomas Presby, & William A. Shutzer. 2. According to Tiffany official website on 03/06/08, these Board of Directors holds from 0 – 214,000 share of stocks. These stocks are publicly traded. Price range for 2007 are as follows: •Option Executive: $2.11 - $31.98

Buy: $38-06 - $38-08
Sell: $40 - $50.48
3.Many of these board members are also Board of Directors at others big companies as well. They have years of work experience serving at various positions prior to being elected as Board of Directors at Tiffany. Two out of nine board members have international experience. 4.A few on board since 1980, many became a member in the 1990’s. 5.Eight out of nine of these board members also participate in Committee Composition such as, Audit, Compensation, Stock Option, Nominating & Governance, and Dividend.

B.Top Management

1. The group of people that constitutes top management are Chief Executive Officer (CEO), Chief Operating Officer (COO) or president, Chief Financial Officer (CFO), executive vice president, and vice presidents of divisions and functional area. 2.Two of the board members are part of Tiffany’s top management team, since 1992 until now. Both are highly experienced in management field prior to joining Tiffany. 3.Both Kowalski (CEO & Chairman of the Board of Directors) and Quinn (President, & Board member) were promoted as top management externally. Kowalski joined Tiffany in 1992 as an Executive VP. 4.Since these two top management holds very high position at Tiffany, both are responsible for the current situation. III. External Environment: Opportunities and Threats

A.Societal Environment

a. The U.S. economy turning into a recession means less spending on luxury items, which are Tiffany’s main products. (T) b. Increases in foreign economies allow expansion of Tiffany’s products. (O)

a. The use of the internet to market and sale products. (O) b....
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