Growth without compromise strategy has been the Tiffany & Company culture since it was first established which contributed to its long success. However, in the recent years the company has been suffering from a declination of their sales and they are facing a dilemma between maintaining company reputation and culture with the vision of the main shareholder of the company.
Declination of sales.
The conflict between shareholders and company management decision of to which path Tiffany should take. The shareholders want Tiffany to rapidly grow and move forward in order to generate more profitable revenue by suggesting options that goes against Tiffany Growth without compromise strategy.
Tiffany is considering licensing its brand to a product that is not the company’s core competencies and opening new shops faster. The issue here is that Tiffany is going against its growth strategy this might dilute the company.
The company’s vertical integration strategy has been costing the company a lot of investment.
Separating Iridesse from Tiffany management. The problem here is that leaving an inexperienced firm running on its own may cause issues if not supervising.
Continue the opening of new stores in South East Asia’s prestigious shopping malls instead of opening in the States.
Launching new exclusives or limited editions product to boost envy of belonging and purchasing.
Creating new concept of Tiffany stores that every day people can relate to and afford to purchase quality product for a reasonable price.
(Recommend all three sets)
Tiffany management needs to be flexible and understand the concept of public company with the need of shareholders. Reevaluating the company concept and belief. As for shareholders, should also understand where the company is from and the culture. Both sides need to respect each other’s vision by taking in mind profit for both sides.
Because Trian Fund Management is the largest shareholder of the company, Tiffany should change its growth strategy in order to maximize shareholders value.
(Recommend set 1)
Revised the growth strategy to match with the company new environment in the industry.
Tiffany keep executing its growth strategy and maintaining the company belief as it has been working for many generations.
(Recommend set 1)
The company should consider outsourcing its raw material and still maintaining the control of quality.
Reselling stones that are not in the quality of Tiffany to other jewelry company to generate another source of revenue.
Tiffany could sell some of its real estate and instead rent it. The London store for example renting it out is more profitable as it generates little revenue compare to Japan.
(Recommend set 2 and 3)
Offer Iridesse management team to have training with Tiffany management in order to set a guideline of success for them to follow.
Tiffany managements needs to first of all agree on where they want the company to go and whether they are willing to modify the growth strategy or not. They will have to take into consideration the shareholders vision for the company and find strategy that will benefit both Tiffany and shareholders. (Issue 2)
I recommend that Tiffany change their growth strategy approach even though the Growth without compromise strategy worked very well for many years but time changed and Tiffany needs to change in order to survive. This will benefit both Tiffany and shareholders as by revising the strategy to a more flexible many opportunities will arise which can increase the company income. (Issue 3)
Opening more shops in South East Asia can help with increase sales as the market that has the...