Course: General Management and Organization Behavior
Date: October 14th, 2013
TIFFANY & CO.
THE COMPANY OVERVIEW
Tiffany & Company (known colloquially as Tiffany or Tiffany's) is an American multinational and one of the world’s premier luxury jewelry and retailers. It is a public company having headquarters in New York City, NY, United States. Tiffany sells jewelry, sterling silver, crystal, stationery, fragrances, personal accessories, as well as some leather goods. The company is renowned for its luxury goods and is particularly known for its diamond jewelry. Tiffany markets itself as an arbiter of taste and style. As of the year 2012, the company had US$3.8 billion of net sales and US$416 million of net earnings; US$2.3 billion on total equity; approximately 9,800 employees and currently operates 275 stores globally (115 in the Americas, 66 in Asia-Pacific, 55 in Japan, 34 in Europe and five in the United Arab Emirates). Tiffany’s mission is to ensure the highest quality diamonds, ethical sourcing, lifetime warranty, affordable price options, and that they'll always be there for you.
TIFFANY & CO. HISTORY
In 1837 New York became the proving ground for 25-year-old Charles Lewis Tiffany and John B. Young, who opened a “stationery and fancy goods” store with a US$1,000 advance from Tiffany’s father. The young entrepreneurs were inspired by the natural world, which they interpreted in patterns of simplicity, harmony and clarity. Tiffany first achieved international recognition at the 1867 Paris World’s fair. The company was the first American company to employ the British silver standard (92% pure). Largely through the efforts of Charles Lewis Tiffany, this standard was adopted by the U.S. Government. By 1870 Tiffany & Co. had become the America's premier silversmith and purveyor of jewels and timepieces. In 1878 Tiffany acquired one of the world's largest and finest fancy yellow diamonds from the Kimberley diamond mines in South Africa. In 1886 Tiffany introduced the engagement rings as we know it today. With the death of Charles Lewis Tiffany in 1902, Louis Comfort Tiffany, the founder’s son, became Tiffany’s first art director. He created a remarkable range of designs. Throughout Tiffany’s history, the U.S. Government has called upon the company to create commemorative designs. Among them are ceremonial swords for Civil War generals and the 1885 redesign of the Great Seal of the United States, which appears on the one-dollar bill. Throughout the company’s history, Tiffany designers have drawn on the natural world for inspiration just like its creators. Nature is also the source of the precious metals and gemstones necessary for creating their designs. In 2012 Tiffany marked its 175th anniversary. To honor this milestone, the Tiffany Diamond was reset in a magnificent necklace of dazzling white diamonds, which traveled to gala celebrations around the world and it is now in its permanent place of honor on the main floor of Tiffany’s fifth avenue store. This priceless gem is symbolic of a heritage based on the highest standards of quality and design excellence, which have made Tiffany & Co. such a world-renowned jeweler.
GLOBAL MARKET ENVIRONMENT
The challenge for a luxury brand is to preserve its status by gathering exclusivity through mainly a price strategy but once the price becomes too friendly, luxury brands and lower/middle-class consumers enter in a relationship where inevitably one of them will come out hurt with a loss of integrity and weaker brand image and perception. The strategy that Tiffany’s employs to maintain its high prices and control its costs is very competitive, and it offers room for expansion and growth within the market. Tiffany has a strong cost position among its competitors. The monopoly market for diamonds forces Tiffany into long-term contracts for raw materials purchasing. But this reliance...
References: Ko, E., & Woodside, A. (2013). Luxury fashion and culture. Emerald group publishing.
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