Is the Tiffany Diamond Really Forever?

Introduction/About the Author

Ashley Brady is a student at the University of Alaska Fairbanks and in her final semester of the Master’s in Business Administration program. As a part of her Organizational Theories for Managers class, she was tasked with critically assessing a multinational corporation. Tiffany & Co. was chosen as Ashley had prior work experience in retail and thought looking into the high-end retailer would be intriguing. Throughout her research she found multiple contradicting analysis on what the future of this organization may look like. All the research has led to this final analysis to answer, “Is the Tiffany Diamond Really Forever?”

ORGANIZATIONAL DESCRIPTION

History of Tiffany & Co.

Many people worldwide know of the company Tiffany & Co, commonly simply called Tiffany. The company has been around for 182 years through ups and downs, and all while wearing many faces. Tiffany originally marketed itself as selling “fancy goods” which mainly consisted of costume jewelry. A few years after inception the co-founders, Charles Lewis Tiffany and John F. Young, were successful enough that they altered their inventory to only include fine jewelry and other knick-knacks (Derdak & Grant, 1996). The company aired on the side of lavish for many years and commissioned ludicrous pieces for high-end clients to include a gold chamber pot for actress and singer, Lillian Russell (Wilson, 2009).

Over the years Tiffany & Co. struggled with its identity. Many companies have purchased Tiffany and revamped the company’s style and clientele. Through it all, the company has held onto its mantra of luxury and is often synonymous with little blue boxes full of upscale gifts (Derdak & Grant, 1996). Tiffany strives to uphold its persona as the definition of style and conveyor of priceless gems.

Company Mission and Strategies

The Company’s key strategic priorities are to:

Amplify an evolved brand message.
Renew the Company’s product offerings and enhance in-store presentations.
Deliver an exciting omnichannel customer experience.
Strengthen the Company’s competitive position and lead in key markets.
Cultivate a more efficient operating model.
Inspire an aligned and agile organization to win.
By pursuing these key strategic priorities, management is committed to the following long-term financial objectives:
To achieve sustainable sales growth.
To increase retail productivity and profitability.
To achieve improved operating margins, through both improved gross margin and efficient expense management.
To improve inventory and other asset productivity and cash flow.
To maintain a capital structure that provides financial strength and the ability to invest in strategic initiatives, while also allowing for the return of excess capital to shareholders through dividends and share repurchases.
(Tiffany Investor, 2019)

Tiffany & Co. believes in the inclusion of women and members of the LGBT community within their organization. They have made press releases and public shows of support for these demographics (Tiffany Sustainability, 2019; UN Global Compact, n.d.).

Tiffany is making a large push for the viability of their products. The sustainability portion of their website state it is their “moral duty to sustain the natural environment.” Videos can be viewed of the CEO announcing the commitment of the company to protecting the environment and encouraging other companies to take the same pledges (Tiffany Sustainability, 2019).

Internationality

Tiffany & Co. source approximately 55 percent of their silver from recycled sources with the remaining 45 percent purchased from the Bingham Canyon Mine in Utah, United States (US). Gold was sourced from the same mine in Utah at approximately 18 percent, with seven percent from a refinery in Canada, and the remaining 75 percent from recycled sources. Platinum is sourced at approximately 72 percent from Montana, US and the remaining 28 percent from a refinery of recycled material in the US (Tiffany Sustainability, 2019).

Most rough diamonds are sourced from known mines in Botswana, Canada, Namibia, Russia, and South Africa. Tiffany manufactures approximately 60 percent of the jewelry they sell at their processing facilities located in New York, US, Belgium, Botswana, Mauritius, Vietnam, and Cambodia with direct jewelry manufacturing locations in the US and the Dominican Republic (Tiffany Sustainability, 2019).

The following chart shows the countries in which Tiffany operate their 315 store locations:

Australia	Hong Kong	Russia
Austria	Ireland	Singapore
Belgium	Italy	Spain
Brazil	Japan	Switzerland
Canada	Korea	Taiwan
Chile	Macau	Thailand
China	Malaysia	United Arab Emirates
Czech Republic	Mexico	United Kingdom
France	Netherlands	United States
Germany	New Zealand

Stakeholders

Tiffany & Co embraced a relationship with stakeholders to work with various organizations with often contradicting objectives. The company believes that these working relationships will benefit the longevity of the organization as well as create positive influences over the jewelry industry (Tiffany Sustainability, 2019). The greatest relationship lies within the coalition of companies that have opted to source only socially responsible products. Tiffany is at the forefront of a global Standard for Responsible Mining. This release was a big win for stakeholders that were adversely affected by the mining industry, organized labor, nonprofits, and impacted communities and businesses (Koritzke, 2018).

Organizational Structure

Tiffany & Co. does not have a full organizational chart released to the public. The only listed employees and organizational structure online was executive management and board members only (see Appendix A). Tiffany is a complex organization internally as internationality of retailers create fragmented departments (Theodoridis, 2009) due to cultural differences and varying consumer needs (Schwandt, 2009).

Horizontal Differentiation: Tiffany & Co. has seemingly high horizontal differentiation. Though the organization has in upper management seven subunits, the lower tiers employ the remainder of the 13,000 employees in various departments. In searching for employment with the company, the applicant has the option of selecting between 24 different categories (Tiffany Careers, n.d.).

Vertical Differentiation: Tiffany & Co. has seemingly high vertical differentiation. While a comprehensive organizational chart is not available to the public, retail organizations tend to have many levels of hierarchy with many employees as middle management (Theodoridis, 2009). The author’s experience within the retail world has shown that within the sales department, the organization typically has at least four layers of middle management between the sales employee and the executive management (see Appendix B).

Symmetric: The prior justifications would place Tiffany & Co. in the upper-right quadrant of the differentiation figure (see Appendix C). As a symmetric organization, there are many specialties within the company as well as multiple reporting levels. Retailers, including Tiffany, need to have multiple departments working simultaneously in order to remain cohesive in their business. It could be argued that based on reports about the company through online forums, some departments within Tiffany could resemble more of a flat organization with low vertical differentiation. However, most online company reviews and public consensus show that most of the operations within Tiffany have many layers in the hierarchy.

Matrix: Due to the great scale of Tiffany & Co. across international borders, the company is a matrix configuration. The company has many individualized compartments that are specialized in specific products and regions (Schwandt, 2009). Companies that utilize matrix structures are often the most complex due to their dependency on other departments as well as reporting often is expected to several departments as opposed to just one (Schwandt, 2009).

Environment, strategy type, and organizational goals: Tiffany & Co.’s strategic priorities and financial objectives are conducive with a “locally stormy” environment. They identify the need to strengthen the company’s position and evolve their brand. They do not seem panicked in their position but aware that a change is necessary to meet their financial objectives. The company is currently analyzing their position within the industry and taking steps to ensure they can be sustainable into the future (Tiffany Investor, 2018; Tiffany Sustainability, 2019).

This research shows that Tiffany & Co. tend to have both Type 3 and Type 4 characteristics of environmental and organizational complexity (see Appendix D). The company is more effective than it is efficient. The industry, to include Tiffany, is locally stormy and the company is at the forefront of innovation and analyzes the upcoming challenges and adjusts strategy accordingly. Knowing that the company is back and forth between the two types affirms that the organizational complexity can be defined as symmetric with some flat departments. Additionally, Tiffany could be considered a mechanistic organization as their structure is centralized, specialized, formalized, and has a strict hierarchy of authority (Daft, 2016). Though due to the split complexity-personality, some aspects of the company are organic as they are primarily horizontal in their communication and utilize a matrix configuration.

Organizational Culture Tiffany & Co. has a strict code of conduct for directors, the Chief Executive Officer (CEO), Chief Financial Officer (CFO), and all other corporate officers. This code is laid out to ensure that the company remains ethical through the top of their organizational model. The top executives should be the model for the rest of the organization in that they are honest, have no interest in competing organizations, do not accept personal compensation or bribes, compliant with all rules and regulations of the company and of the government, and keep confidentiality of the company, to name a few (Tiffany Corporate Governance, 2018).

Tiffany lists their cultural values as:

1. Honor the Customer
·We build quality relationships by putting the needs of those we serve at the heart of every decision we make and action we take.
2. Think Boldly
·We combine creativity and intuition with data and analysis to accomplish the extraordinary.
3. Lead with Passion
·We are visibly proud of what we bring to the world and approach every day with infectious energy, curiosity and optimism.
4. Do the Right Thing
·We act with integrity no matter what the circumstances and take ownership of our actions.
5. Be Brilliant Together
·We find productive ways to harness our diverse talents and believe that alone we are smart but together we are amazing.
(Tiffany Careers, n.d.)

Organizational Environment

The main product peddled by Tiffany is the diamond. The diamond has been mined for many years and it is estimated that 1.2 billion carats are in the worldwide reserves. These diamonds are used for jewelry and industrial material. About 50 percent of the minded diamonds are not gemstone quality and routed for industrial purposes (Laporte, n.d.). With synthetic diamond manufacturing on the rise, the demand for real diamonds have decreased in recent years (Laporte, n.d.; Yarnell, 2004).

Tiffany & Co. faces competition on all the products they sell. Some competitors are specialized to a specific product while others sell a variety of products like the company. The main competition usually arises for engagement jewelry and diamonds. To separate Tiffany from the competition, the company focuses greatly on the quality of their products (Tiffany Investor, 2018). Some of the main retail competition is Blue Nile, De Beers, Cartier, Swarovski, Zales, and Pandora (Owler, 2019). Within the stock market, some of the main competitors for Tiffany & Co. (TIF) include Fossil Group (FOSL), Signet Jewelers (SIG), Movado Group (MOV), Birks Group (BGI), and Charles & Colvard Ltd. (CTHR) (NASDAQ, 2019).

To keep up with the competitiveness of the retail markets, Tiffany has tried to direct potential customers to their online platforms. While the website is beautiful in its design, the retailer falls a bit short in its social media sites. The modern customer can buy product whenever and wherever due to mobile Internet. To enrapture these clients, Tiffany needs to create unique products and features that stand out above the other retailers. Technology based analytics should also be used to evaluate successes and failures within their platform (Brynjolfsson, Hu, & Rahman, 2013).

Tiffany & Co. survives in a simple, unstable environment. This type of environment creates uncertainty for mangers when change does occur in the organization. Elements within the business are hard to predict such as social trends and interests (Daft, 2016).

Complexity:Tiffany is entirely reliant upon mining and the regulations that surround them (Tiffany Investor, 2018). While these regulations are not easy to predict, they are not usually rapid nor are they world-wide. Tiffany would be able to continue business should they find themselves with an unexpected regulation due to their many sources for gems and metals.

Import and export regulations and tariffs can take their toll on the organization as well. The current tariff war between the US and China has increased a ten percent levy on luxury goods such as sterling silver tableware and rough diamonds (Bates, 2018). At this time, these items and others on the tariff list do not directly impact Tiffany & Co., though there is the possibility as many items are sourced outside of the US (Tiffany Sustainability, 2019). Due to this instability of importation, Tiffany has chosen to procure many of their metals and paper products from recycled sources (Tiffany Sustainability, 2019).

Unpredictability: Due to the various countries the company sources from, manufactures in, and sells in, there are multiple operations that need to be juggled simultaneously. Similarly, the company must choose what types of material they use in manufacturing of goods that are sustainable into the future (Tiffany Sustainability, 2019). Due to this instability of material sourcing, Tiffany has chosen to procure many of their metals and paper products from recycled sources (Tiffany Sustainability, 2019). As previously stated, Tiffany has put on many faces over the years and has adapted to the ever-changing environment. It is hard to predict what the new trends or interests are going to be in the future. The global attitude towards the jewelry industry and other luxury goods has changed over time and the company has tried to keep up in a timely and efficient manner (Tiffany Investor, 2018). The expanding use of social media and the speed at which information is available to consumers is rapidly expanding. Shopping patterns could change, and companies need to be on the forefront of their public relations else the company could be adversely affected. Many Tiffany’s sales are still in the brick-and-mortar store and strides are being made to expand their online presence to adapt to this unpredictable market (Tiffany Investor, 2018).

PROBLEM STATEMENT & CRITICAL EVALUATION

Tiffany & Co. is in the elaboration stage of the organizational life-cycle and has been for quite some time. Every few years Tiffany has found themselves in crisis and have a need for revitalization. In January 2017, the CEO of Tiffany, Frederic Cumenal, was replaced due to poor financial results. The prior CEO, Michael Kowalski, came back to the company on an interim basis (Wahba, 2017) until Alessandro Bogliolo assumed the position in October 2017. Three CEO’s in one year is comparative to an alarm going off that the company is in crisis.

In the Golden Age for Tiffany & Co., extravagant pieces were manufactured for top dollar for customers to show off the cash they had to burn (Wilson, 2009). Currently, if someone had the desire, they could purchase a watering can for $35,000 on the website (Tiffany & Co., 2019). But even the most popular engagement rings tend to be out of the price range for most middle-class Americans. The average engagement ring purchase in America is approximately $3,000 (Leonhardt, 2018). The popular Tiffany Setting starts pricing over $10,000 per ring (Tiffany & Co., 2019).

The age of the brick-and-mortar store seems to be a dying industry (Brynjolfsson, Hu, & Rahman, 2013). The environment in which Tiffany has survived in for 180 years seems to be moving online and the company is going to need to adapt. This move to the e-commerce front also poses an element of the unknown as cyber security becomes a more apparent threat (Tiffany Investor, 2018).

The demand for luxury items seems to have a bleak outlook. Economic downturn in China and the US and the unpredictability of the futures of the UK and France can adversely affect the luxury retailer. Luxury brands have seen sales drop over the past several years and the retailers are scrambling to get the edge up on the economy and the environment. The upcoming generations may have different ideas as to what qualifies as a luxury item and what is worth their money (Danziger, 2018). The company often seems dated to younger generations that are looking for a more modern design (Hellman, 2015).

Historically, luxury brands such as Tiffany have appealed to customers as an elite product and promoted a culture of “exclusion.” With social media platforms, luxury retailers must “befriend” this new generation of customers and show interests in social trends (Fromm, 2018). These interactions with consumers become paramount as 97 percent of those born between the early 1980’s and early 2000’s, commonly referred to as millennials, own a computer and 94 percent own a mobile device (Smith, 2011). This inclusiveness strays from the typical marketing style luxury brands have utilized in the past. This generation response positively to rewards, coupons, and freebies from retailers (Ng & McGinnis Johnson, 2015) and too much exclusivity from a brand will make them unpopular in the inevitably dominating e-commerce platform.

A strengths, weaknesses, opportunities, and threat (SWOT) analysis of Tiffany & Co. can affirm that this changing mindset in the millennial generation is a threat to the company (see Appendix E). Millennials have specific types of marketing they prefer and put value on the review of an organization by a peer (Smith, 2011). Retailers have ramped up their marketing in the e-commerce realm and Tiffany is no exception. Tiffany will just need to make strategic moves in their marketing and online interactions to remain a desired brand to millennials.

RECOMMENDATIONS, IMPLICATIONS, & MANAGERIAL APPLICATION

Despite the ups and downs of the Chinese economy (Winkler, 2018), the rest of the Asia-Pacific region seems to have a steady upward economic trends, specifically in India and Philippines (Fensom, 2016). Growth throughout the region is projected to increase to 5.3 percent as exports continue (World Bank Group, 2018). With the wealth being generated and the capitalistic mindset, it is estimated that two-thirds of world’s middle class will reside in this area by the year 2030 (Hellman, 2015). As of 2018, Tiffany & Co. operated 87 stores in the Asia-Pacific region which generated 26 percent of world sales (Tiffany Investor, 2018). With these projections in upward growth, Tiffany would do well to expand their reach in this market.
- The millennials in the Asia-Pacific market are not unlike the millennials in the North American market. They respond positively to interactions on social media platforms and e-commerce marketing (Yang, et. al., 2003). Since a greater concentration of Tiffany’s target market is projected to reside in the Asia-Pacific market, an expanded presence in that market would be a beneficial move for Tiffany.
In this digital age, the connection to a customer base can typically be established on social media. The interaction of a vendor and the potential customer through social media platforms can be imperative to the successful recruitment of that customer. Young, potential customers wish to see more than just imagery on Tiffany’s social media page (Dai, 2017). These successful digital encounters often lead the young person into the store only to be let down with an old-style of shopping (Danziger, 2017). Tiffany & Co. has survived nearly two centuries and they need to continue to evolve with the times to appeal to the younger generations.
- The target demographic are women and men aged 35 and older that have the finances and style to purchase Tiffany products. Millennials are reported to be more likely to buy into the traditional engagement ring than previous generations. This generation is also one of the largest with approximately 80 million. The oldest of this generation are approaching their mid-30’s with the youngest in their early 20’s (Danziger, 2017). This large demographic will soon be the main consumers of Tiffany & Co. so efforts in consumer appeal need to be made to target this age groups (Tiffany Press, 2017).
- Tiffany should further expand their product lines to include pieces that are affordable to the younger millennial shopper. The brand cannot afford to seclude such a large segment of their target market. While the company should hold true to their roots, the brand must reach out to all users on the e-commerce platforms to make them feel included in the community (Fromm, 2018). Many young millennials do not have finances to purchase typical Tiffany products. Getting the consumer to purchase earlier in life with positive interactions will increase the likelihood of new purchases from the same consumers later in life (Smith, 2011).
Tiffany & Co. should continue to source their materials from recycled sources and disclose the origins of their gems. This aligns with the green movements of modern social trends. It shows consumers that they are not just another corporation that is out for your money and do not care about the world they impact. Tiffany wishes to remain a status symbol for the elite and is making efforts with young generations by having modern stars don their goods on the red carpet. This is a smart tactic as many of the generation can view the retailer as dated (Hellman, 2015).
- Tiffany should keep up with the social trends their demographic is interested in. The company should “befriend” their consumers and have a large presence in the social media world. While millennials are currently concerned with green movements it is smart that Tiffany is vocal about their sustainability. As the trends shift in unpredictable ways, the company needs to keep up and shift their priorities as well.
- Currently, Tiffany does not source any synthetic diamonds (Tiffany Investor, 2017). Synthetic diamonds in the market is nothing new (Yarnell, 2004). Though the technology to perfect a synthetic diamond is on the rise. The De Beers Group is the leading company in diamond procurement and is fighting desperately against the market of man-made diamonds (Onstad & Lewis, 2018). The more realistic the diamonds become in combination with the trend to source gems with little environmental impact, the more the millennial consumer will desire them. The influx of diamonds in the market will cut into the prices of real diamonds and threaten the gem that Tiffany’s has come to rely on.

CONCLUSION

Tiffany & Co. has gone through many organizational changes in the past. The upcoming crisis with the newest generation can be handled with ease. Managers should not only expand their offerings on their website but advertise and increase interactions on social media platforms. The expense of having a modern marketing team would be insignificant in the long run if the company fails to remain relevant with the millennials. Tiffany has done little to expand their product line to include cheaper items as they are afraid of losing their appeal as a brand for the elite (Wilson, 2009). A sub-brand could be developed to incorporate that market and secure consumers in the future. The Asia-Pacific market has the potential to be the company’s main consumer so extra marketing and social interactions efforts should be made in this region. Tiffany would be unwise to ignore the economic forecast for the region and end up with too little, too late.

As stated, the company has been in many hands over its 180-year lifespan and the upcoming changes should be implemented with little resistance. The company can remain relevant and appeal to the millennials and really make the Tiffany Diamond last forever.

References

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Appendices

Appendix A

Executive Management Organizational Chart of Tiffany & Co.

Appendix B

Example of Lower-Tier Sales Employees in Typical Retail Organizations

Appendix C

Tiffany & Co. Placement Within the Differentiation Figure

Appendix D

Organizational and Environmental Characteristics Chart

	Type 1	Type 2	Type 3	Type 4
Organization Complexity	Blob	Tall	Flat	Symmetric
Configuration	Simple	Functional	Divisional	Matrix
Environment	Calm	Varied	Locally stormy	Turbulent
Strategy Types	Reactor	Defender	Prospector	Analyzer with innovation
Organization Goals	Neither	Efficiency	Effectiveness	Efficiency and Effectiveness

Appendix E

SWOT Analysis of Tiffany & Co.

Organizational Complexity Analysis of Tiffany & Co.

1: How complex is your organization internally?

Organizational Complexity: Tiffany & Co. does not have a full organizational chart released to the public. The company employs over 13,000 employees (Owler, 2019) with 315 retail locations throughout 29 countries (Tiffany Investor, 2019). Additionally, Tiffany manufactures approximately 60 percent of their own goods at 11 locations (Tiffany Sustainability, 2019).

Tiffany & Co. Retail Locations (Americas)
Tiffany & Co. Retail Locations (Europe/West Asia)
Tiffany & Co. Retail Locations (Asia Pacific)

The only listed employees and organizational structure online was executive management and board members only.

Tiffany & Co. is a complex organization internally as internationality of retailers create fragmented departments (Theodoridis, 2009) due to cultural differences and varying consumer needs (Schwandt, 2009).

Horizontal Differentiation: Tiffany & Co. has seemingly high horizontal differentiation. Though the organization has in upper management seven subunits, the lower tiers employ the remainder of the 13,000 employees in various departments. In searching for employment with the company, the applicant has the option of selecting between 24 different categories (Tiffany Careers, n.d.).

Vertical Differentiation: Tiffany & Co. has seemingly high vertical differentiation. While a comprehensive organizational chart is not available to the public, retail organizations tend to have many levels of hierarchy with many employees as middle management (Theodoridis, 2009). Personal experience within the retail world has shown that within just the sales department the organization typically has at least four layers of middle management between the sales employee and the executive management.

Example of lower tier sales employees in typical retail organizations

#2: Locate your organization on the figure, what is the complexity?

Symmetric: The prior justifications would place Tiffany & Co. in the upper-right quadrant of the differentiation figure. As a symmetric organization, there are many specialties within the company as well as multiple reporting levels. Retailers, including Tiffany, need to have multiple departments working simultaneously in order to remain cohesive in their business. I would argue that based on my findings some departments within Tiffany could resemble more of a flat organization with low vertical differentiation. However, online company reviews and public consensus show that most of the operations within Tiffany have many layers in the hierarchy.

#3: Does your organization’s complexity fit its structural configuration?

	Type 1	Type 2	Type 3	Type 4
Organizational complexity	Blob	Tall	Flat	Symmetric
Configuration	Simple	Functional	Divisional	Matrix
Environment	Calm	Varied	Locally stormy	Turbulent
Strategy types	Reactor	Defender	Prospector	Analyzer with innovation
Organizational goals	Neither	Efficiency	Effectiveness	Efficiency and Effectiveness

Previous research has shown that Tiffany & Co. tend to have both Type 3 and Type 4 characteristics of environmental complexity. The company is more effective than it is efficient. The industry to include Tiffany is locally stormy and the company is at the forefront of innovation and analyzes the upcoming challenges and adjusts strategy accordingly. Knowing that the company is back and forth between the two types affirms that the organizational complexity can be defined as symmetric with some flat departments.

Matrix: Due to the great scale of Tiffany & Co. across international borders, the company is a matrix configuration. The company has many individualized compartments that are specialized in specific products and regions (Schwandt, 2009). Companies that utilize matrix structures are often the most complex due to their dependency on other departments as well as reporting often is expected to several departments as opposed to just one (Schwandt, 2009).

#4: Is there “fit” across the organization’s components?

There is not currently a fit across all the components. The company does not appear to have a standardization to fit within one type. Many times, the company could be argued into Type 3 or Type 4 depending upon the angle the investigator is taking.

What do we know now about how our organization aligns across these categories?

Tiffany & Co. is constantly trying to remain its position as a top luxury retailer. The company is aware that resources may be dwindling and therefore pushes its sustainability agenda (Tiffany Sustainability, 2019). The advancement of e-commerce has been rocky for all retailers and Tiffany attempts to keep up with the unfamiliar terrain (Tiffany Investor, 2018). The organizational model of retailers is traditionally divisional (Theodoridis, 2009) though a matrix configuration would likely survive better in technologically advancing market (Schwandt, 2009).

What would make them more effective?

The greatest challenge that seems to face Tiffany is the unpredictability of the upcoming technological advances. The advances in technology have made the upcoming generations more aware than their predecessors of alternatives and sustainability. This has made the company innovate and become effective in surviving with this generation, but it remains to be seen if their efforts are at all efficient in maintaining their status as one of the top luxury retailers as they try to appeal to the new market.

Should your organization change its structure based on its complexity? Based on the limited amount of information that is publicly available on the Tiffany & Co. organizational structure, it is difficult to really analyze if changes need to be made at this time. The sectors of the organization that are still in the divisional mindset would do well to move towards a matrix configuration as it seems that the organization would like to see itself all within the Type 4 category. The company appears to, for the time being, to be successfully maneuvering through the storminess of their environment. Though complacency in the organizational structure could be the demise of the 180-year-old company.

References

Owler, Inc. (2019). Tiffany’s competitors, revenue, number of employees, funding and acquisitions. Owler, Inc. Retrieved from https://www.owler.com/company/tiffany

Tiffany Careers. (n.d.) Tiffany & Co. Careers. Retrieved from https://www.tiffanycareers.com/

Tiffany Investor. (2019). Tiffany & Co. Investor. Retrieved from https://investor.tiffany.com

Tiffany Sustainability. (2019). Tiffany & Co. Sustainability. Retrieved from https://www.tiffany.com/sustainability

Environmental Analysis of Tiffany & Co.

How turbulent is your company’s environment and how well do you believe that they adapt to it?

Tiffany & Co.’s 180 year track record can be a sure indicator that they adapt well to the environment in which they survive. The company has had many looks over the years and different owners have changed the style and the clientele. The never-changing feature of the company is its desire to be a name of luxury, the definition of style, and a conveyor of priceless gems (Derdak & Grant, 1996). The retail world is highly turbulent and it is difficult to predict where trends are going to lead this industry (Tiffany Investor, 2018).

Environmental Factors that Impact Tiffany & Co.

TASK ENVIRONMENT

Industry
- Competitors
  - While many sources contend who the main competition is for Tiffany, most agree that the main competitors are Blue Nile, De Beers, Cartier, Swarovski, Zales, and Pandora (Owler, 2019).
- Industry Size
  - The main product of Tiffany is the diamond. The diamond has been mined for many years and it is estimated that 1.2 billion carats are in the worldwide reserves. These diamonds are used for jewelry and industrial material. About 50 percent of the minded diamonds are not gemstone quality and routed for industrial purposes (Laporte, n.d.). With synthetic diamond manufacturing on the rise, the demand for real diamonds have decreased in recent years (Laporte, n.d.; Yarnell, 2004).
- Competitiveness
  - To keep up with the competitiveness of the retail markets, Tiffany has tried to direct potential customers to their online platforms. While the website is beautiful in its design, the retailer falls a bit short in its social media sites. The modern customer can buy product whenever and wherever due to mobile Internet. To enrapture these clients, Tiffany needs to create unique products and features that stand out above the other retailers. Technology based analytics should also be used to evaluate successes and failures within their platform (Brynjolfsson, Hu, & Rahman, 2013).
- Related Industries
  - While jewelry is still the most associated item for sale in the Tiffany catalog, other products such as watches, fragrances, home products and accessories, and stationary are available for purchase (Hellman, 2015). This product mix puts Tiffany in direct competition with a wide array of retailers. Since Tiffany focuses on the niche of fine jewelry, their other product lines only account for less than ten percent of the worldwide net sales (Tiffany Investor, 2018).
Raw Materials
- Suppliers
  - To become transparent and sustainable, Tiffany reports they are sourcing their gems and metals from known, ethical mines. Most of the diamonds are mined from Botswana, Canada, Namibia, Russia, and South Africa (Tiffany Sustainability, 2019).
- Manufacturers
  - Tiffany has facilities for design and manufacturing. Approximately 60 percent of the jewelry sold are manufactured directly in a Tiffany facility. Diamond sourcing and processing locations are in New York, Belgium, Botswana, Mauritius, Vietnam, and Cambodia. Direct jewelry manufacturing locations are in New York, Kentucky, Rhode Island, and the Dominican Republic (Tiffany Sustainability, 2019).
- Real Estate
  - In 2018, Tiffany operated 124 stores in the Americas, 87 stores in the Asia-Pacific, 54 stores in Japan, 46 stores in Europe, and four stores in developing markets. This equates to an approximate 1,311,00 gross square feet (Tiffany Investor, 2019). Evaluation of current and planned real estate developments are currently being analyzed as a part of the Financial Accounting Standards Board’s (FASB) Accounting Standards Update (ASU) as of the end of fiscal year 2017 (Tiffany Investor, 2018).
- Services
  - Tiffany & Co. is not a service-based company but a product-based company. Services associated with the company include Tiffany Select Financing and customer service within the store. With credit approval, customers can finance their purchases which is contrary to the opening in 1837 when the store would only take cash or check (Tiffany & Co. History, n.d.). Customer service in the store to give a customer the Tiffany Experience is of the utmost importance to the company (Tiffany Sustainability, 2019).
Market
- Customers
  - Most net sales are made in the Americas followed by Asia-Pacific, Japan, and Europe (Tiffany Investor, 2018). The target market is upper-class and upper middle-class individuals. The brand targets those that value exclusivity, sophistication, elegance, and style. Because many people do value those things and cannot afford the typical luxury price of Tiffany products, the company does offer some lines of more reasonably priced products but are reluctant to offer too much at these lower prices. They would like to maintain their exclusive clientele and too much saturation into the market would take away from this persona (Bhasin, 2018; Hellman, 2015).
- Clients
  - The clientele has been strength throughout the years for the company. The company became a symbol for the rich and famous through successful marketing campaigns (Kaur, 2016). Tiffany diamonds have been donned and highlighted by various stars including Audrey Hepburn and Madonna. Current stars are still seen wearing Tiffany diamonds and giving Tiffany products as gifts (Tiffany & Co., 2019).
- Potential Users
  - To attract customers that wish their jewelry to be unique, Tiffany has started a “build-your-own” program for engagement rings. The company has also contracted with Luxottica Group to produce sunglasses with prescription lenses. In a controversial move, Tiffany dissolved their partnership with the Swatch Group and is set on making their own line of luxury watches (Hellman, 2015). All these efforts help to diversify the Tiffany product portfolio and have the potential to gain more users of their brand (Zacks Equity Research, 2018).
  - Potential locations for new stores and markets are constantly evaluated. Tiffany considers the local economy and characteristics of markets before choosing to join (Tiffany Investor, 2018). As previously stated, Tiffany does not want to be overly aggressive in expanding its customer base to still maintain the persona of a brand of the elite and the exclusive (Bhasin, 2018; Hellman, 2015).
Human Resources
- Labor market
  - Tiffany & Co. employs approximately 13,100 people according to latest SEC filing (Owler, 2019). In order to retain employees, Tiffany has expanded their leave policy, offered additional trainings, and been an advocate for women in the workplace as well as a supporter to the LGBT community (Tiffany Sustainability, 2019).
- Employment Agencies
  - Tiffany & Co. does not appear to have any contracts with third party employment agencies. Jobs are posted on the Tiffany website as well as on third-party job sites such as Indeed.com. All applicants are directed through the Tiffany website. (Tiffany Careers, n.d.).
- Universities
  - Tiffany & Co. does not appear to have any exclusivity to any college or university. The company does offer internships to college students with the opportunity to continue with the company if the candidate is a right fit (Tiffany Careers, n.d.).
- Unions
  - There does not appear to be any unions for Tiffany & Co. workers specifically. Tiffany is an Equal Opportunity Employer (EOE) and does not discriminate against those that are a part of a union (Tiffany Careers, n.d.).
International
- Competition from Foreign Firms
  - Competition in the global market is like the competition within the American market. Many competitors compete through price points while others compete with customer service and reputation (Tiffany Investor, 2018).
- Entry Into Overseas Markets
  - Tiffany & Co.’s first international store was in 1850 in Paris. The store was set up for the international customer or the Americans traveling or living abroad (Alexander & Doherty, 2017). Tiffany now has stores in the following countries:

Australia	Hong Kong	Russia
Austria	Ireland	Singapore
Belgium	Italy	Spain
Brazil	Japan	Switzerland
Canada	Korea	Taiwan
Chile	Macau	Thailand
China	Malaysia	United Arab Emirates
Czech Republic	Mexico	United Kingdom
France	Netherlands	United States
Germany	New Zealand

In 2017, more than 50 percent of the worldwide sales were in countries outside of the home-field, the United States (Tiffany Investor, 2019).
- Foreign Customs
  - Tiffany & Co. is sensitive to worldwide cultural differences. Stores and advertisements are evaluated and produced in a way that will be effective in the market in which they are intended (Tiffany Investor, 2018).
- Regulations
  - The United Kingdom’s (UK) impending break from the European Union (EU) still looms over many retailers with locations within the UK. Costs associated with new or additional tariffs could be disruptive to the Tiffany stores (Tiffany Investor, 2018). Any type of civil unrest within a country and anti-US government could have a significant impact on Tiffany’s ability to do business in foreign countries.
- Exchange Rate
  - A recent decline in price per Tiffany share is in part a result from a strong US dollar, a threat most US based companies face that do business overseas (Hellman, 2015; Tiffany Investor, 2018). In companies with weakening currencies, Tiffany may have to increase the prices of goods to keep their profit margins up. This would not be looked upon favorably in those affected countries. Traveling tourists to the US may not spend their money with the company as the exchanged rate to the US dollar is weakened due to the strong dollar (Tiffany Investor, 2018). There is also always the potential for the mis-handling of foreign governments’ currency management practices (Tiffany Investor, 2018).
GENERAL ENVIRONMENT
Government
- City, state, and Federal Laws
  - Tiffany & Co. is bound by all cities, states, federal, and foreign laws in which they operate or do business.
- Regulations
  - Tiffany is at the mercy of the regulations regarding import and export licensing in the multiple countries they do business in. As all of the diamonds the US company purchases are sourced from foreign companies, any restriction to these imports could adversely affect the company (Tiffany Investor, 2018).
  - Tiffany & Co. must follow the regulations of financial reporting as mandated by the SEC. This includes figures in relation to the sale of consumer products (Tiffany Investor, 2018).
  - The Dodd-Frank Act was signed into law in 2010 by former US President, Barak Obama (History.com, 2018). Section 1502 of the Act speaks of conflict-free, responsible supply chains for companies. Tiffany strongly supports this promotion as they source their gems and metals from known, ethical sources (Tiffany Press, 2017).
- Taxes
  - The company is highly impacted by the 2017 Tax Act that was implemented by the US President, Donald Trump. Overall, the effective income tax rate increased 17.2 percent from tax year 2016 to 2017. However, the federal corporate income tax rate went from 35.0 percent to 21.0 percent effective January 1, 2018. There are many other provisions that the 2017 Tax Act that are beneficial to a company like Tiffany & Co. (Tiffany Investor, 2018).
  - The company is also subjective to the foreign, state, and local taxes in which they operate their business (Tiffany Investor, 2018).
  - Investment spending is planned to increase to limit pre-tax earnings growth and sustain net earnings over the long-term (Tiffany Investor, 2018).
Sociocultural
- Age
  - The target demographic are women and men aged 35 and older that have the finances and style to purchase Tiffany products. The upcoming generation of millennials is catching the attention of the company. This generation is reported to be more likely to buy into the traditional engagement ring than previous generations. This generation is also one of the largest with approximately 80 million. The oldest of this generation are approaching their 40’s with the youngest in their early 20’s (Danziger, 2017). This large demographic will soon be the main consumers of Tiffany & Co. so efforts in advertising have been made to target these age groups (Tiffany Press, 2017).
- Values and Beliefs
  - Tiffany & Co. believes in the inclusion of women and members of the LGBT community within their organization. They have made press releases and public shows of support for these demographics (Tiffany Sustainability, 2019; UN Global Compact, n.d.).
  - Tiffany is making a large push for the environment. The sustainability portion of their website state it is their “moral duty to sustain the natural environment.” Videos can be viewed of the CEO announcing the commitment of the company to protecting the environment and encouraging other companies to take the same pledges (Tiffany Sustainability, 2019).
- Education
  - Tiffany & Co.’s current educational push is for the focused efforts of natural resource management. Tiffany stopped the sale of newly sourced coral since they could not find any way to harvest coral without dramatically affecting the environment in which it thrives. The company established the Tiffany & Co. Foundation in 2000 to focus on and achieve its philanthropic endeavors (Tiffany Foundation, 2019).
- Religion
  - Religion does not seem to be a factor for the operations or marketing for Tiffany & Co.
  - Some religious symbols are available for purchase but they do not appear to be a factor in the way the business is operated (Tiffany & Co., n.d.)
- Work Ethic
  - Tiffany & Co. has a strict code of conduct for directors, the Chief Executive Officer (CEO), Chief Financial Officer (CFO), and all other corporate officers. This code is laid out to ensure that the company remains ethical through the top of their organizational model. The top executives should be the model for the rest of the organization in that they are honest, have no interest in competing organizations, do not accept personal compensation or bribes, compliant with all rules and regulations of the company and of the government, and keep confidentiality of the company, to name a few (Tiffany Corporate Governance, 2018).
- Consumer and Green Movements
  - Tiffany wishes to reduce its impact on the Earth to sustain its future resources. The website leading into the sustainability reports reads, “At Tiffany & Co., we believe it is our moral duty to sustain the natural environment. As a result, we are committed to not only minimizing our impacts as a business but also using our voice and actions to positively affect communities and protect the planet.” Examples to support their statement include 99 percent of their catalogues and gift boxes were sustainably sourced, 98 percent of materials were traceable, and more than 20 percent of the stores converted to LED lighting. Tiffany sets an internal goal to achieve zero emissions by the year 2050 (Tiffany Sustainability, 2019).
Economic Conditions
- Recession
  - Tiffany & Co. sells an array of products, and all of their products are typically seen as optional purchases. During economic downturn, companies like Tiffany suffer greatly. During the US recession in 2008, Tiffany reported their sales were drastically reduced and targeted sales objectives were far missed (Carney, 2009).
  - The Chinese market accounts for approximately 33 percent of luxury spending. China’s slowdown in spending in 2009 and again in 2016 due to recession is highly impactful to Tiffany & Co. (Hellman, 2015; Winkler, 2018). The US trade wars starting in 2018 with China are not improving sales for the company in the Asian-Pacific market nor in the American market with Chinese tourists (Fickenscher, 2018).
- Unemployment Rate
  - The low unemployment rate in the US is beneficial to Tiffany & Co. The more people in the workforce, the more people can spend on luxury items. An increase in the wage base in the US also bodes well for the company (Chin, 2018). The company also provides many additional jobs through the fourth quarter of their fiscal year which help to employ many people through the holidays (Tiffany Careers, n.d.).
- Inflation Rate
  - Consumer prices are rose 2.9 percent in 2017 and such a steep incline can be poor for the market (Chin, 2018). While minimum wage may raise and paychecks can get bigger, the cost of goods will also increase. In any country Tiffany does business, the rapid inflation rate can be detrimental to the business. Inflation can affect the cost of labor, goods, raw materials, and freight, to name a few. Business, including those with luxury goods, must increase prices throughout time to compete in the inflated market (Neate, 2018).
- Growth
  - Tiffany plans to increase spending in technology, marketing, communications, and store presentations to achieve growth objectives. Implementation of new processes and systems to keep up with the changing market should help the company achieve sustainable sales growth. Responsible management of inventories should also lead to growth in sales (Tiffany Investor, 2018).
Technology
- Techniques of Productions
  - Currently, Tiffany only procures diamonds that are sourced in traditional mines as opposed to synthetic sourcing (Tiffany Investor, 2018). The advancement of quality and demand for ethically man-made diamonds may change things for the company. A supplier of Tiffany, the De Beers Group, has begun purchasing synthetic diamonds to keep the demand at bay (Onstad & Lewis, 2018).
- Computers and Information Technology
  - Tiffany made their first technological advance with the implementation of the point of sale system for in-store productivity tracking and inventory tracking (Hellman, 2015). The information technology (IT) systems remain a concern for Tiffany for the threat of breaches in company and customer information. The company contracts with third-party vendors to monitor these systems thus the ultimate control of data security remains out of Tiffany’s hands (Tiffany Investor, 2018).
- E-Commerce
  - Tiffany’s website operates in 13 countries. The website sales remain only seven percent of the worldwide net sales. The company is reluctant to push too much product onto the Internet as maintenance and promotion of the brand is pivotal to brand imagery. Failure to maintain luxury and elite status may tarnish the Tiffany image (Tiffany Investor, 2018).
Financial Resources
- Stock markets
  - In 1987, Tiffany & Co.’s initial public offering (IPO) occurred at a price of $23.00 per share (approximately $1.92 when adjusted). Tiffany’s stock is currently sold in the New York Stock Exchange (NYSE) as TIF. The price per share is currently $88.08 with a 52-week high being $141.64 and a 52-week low at $73.04 (Tiffany Investor, 2019).
  - Tiffany remains consistent in paying a quarterly dividend on common stock at a rate of $0.55 per share (Tiffany Investor, 2019).
- Banks
  - The Bank of New York Mellon holds long-term notes for Tiffany, is an agent for the Tiffany Select Financing credit program, provides banking services, and is the trustee for Tiffany’s pension plans. Fees paid to this bank amounted to approximately $700,000 in the year 2015 (Tiffany Investor, 2018).
  - In 2014, Tiffany borrowed a total of $750 million as long-term loans. The notes payable mature in 2019 and 2020 where payments will begin to be made against the principle balance with interest (Tiffany Investor, 2018).
- Private Investors
  - Currently, Tiffany does not have any private investors outside of common stock shareholders (Tiffany Investor, 2018).

#2: Is the organization internationally diversified? Yes

If yes, where are they currently (regional or by country, could be broken down by product distribution or brick and mortar locations, etc…)?

The majority of rough diamonds are sourced from known mines in Botswana, Canada, Namibia, Russia, and South Africa. Tiffany manufactures approximately 60 percent of the jewelry they sell at their processing facilities located in New York, US, Belgium, Botswana, Mauritius, Vietnam, and Cambodia with direct jewelry manufacturing locations in the US and the Dominican Republic (Tiffany Sustainability, 2019).

The following chart shows the countries in which Tiffany operates their 315 store locations:

Australia	Hong Kong	Russia
Austria	Ireland	Singapore
Belgium	Italy	Spain
Brazil	Japan	Switzerland
Canada	Korea	Taiwan
Chile	Macau	Thailand
China	Malaysia	United Arab Emirates
Czech Republic	Mexico	United Kingdom
France	Netherlands	United States
Germany	New Zealand

Who are their major competitors?

Tiffany & Co. faces competition on all of the products they sell. Some competitors are specialized to a specific product while others sell a variety of products similar to the company. The main competition usually arises for engagement jewelry and diamonds. To separate Tiffany from the competition, the company focuses greatly on the quality of their products (Tiffany Investor, 2018). Some of the main retail competition is Blue Nile, De Beers, Cartier, Swarovski, Zales, and Pandora (Owler, 2019). Within the stock market, some of the main competitors for Tiffany & Co. (TIF) include Fossil Group (FOSL), Signet Jewelers (SIG), Movado Group (MOV), Birks Group (BGI), and Charles & Colvard Ltd. (CTHR) (NASDAQ, 2019).

What markets should they expand to?

Despite the ups and downs of the Chinese economy (Winkler, 2018), the rest of the Asia-Pacific region seems to have a steady upward economic trends, specifically in India and Philippines (Fensom, 2016). Growth throughout the region is projected to increase to 5.3 percent as exports continue (World Bank Group, 2018). With the wealth being generated and the capitalistic mindset, it is estimated that two-thirds of world’s middle class will reside in this area by the year 2030 (Hellman, 2015). As of 2018, Tiffany & Co. operated 87 stores in the Asia-Pacific region which generated 26 percent of world sales (Tiffany Investor, 2018). With these projections in upward growth, Tiffany would do well to expand their reach in this market.

#3: How complex and unpredictable is the organization’s environment? Which environment does your organization exist in?

Complexity

Tiffany is entirely reliant upon mining and the regulations that surround them (Tiffany Investor, 2018). While these regulations are not easy to predict, they are not usually rapid nor are they world-wide. Tiffany would be able to continue business should they find themselves with an unexpected regulation due to their many sources for gems and metals.

Unpredictability

Due to the various countries the company sources from, manufactures in, and sells in, there are multiple operations that need to be juggled simultaneously. Similarly, the company must choose what types of material they use in manufacturing of goods that are sustainable into the future (Tiffany Sustainability, 2019). Due to this instability of material sourcing, Tiffany has chosen to procure many of their metals and paper products from recycled sources (Tiffany Sustainability, 2019).

Tiffany has put on many faces over the years and has adapted to the ever changing environment. It is hard to predict what the new trends or interests are going to be in the future. The global attitude towards the jewelry industry and other luxury goods has changed over time and the company has tried to keep up in a timely and efficient manner (Tiffany Investor, 2018). The expanding use of social media and the speed at which information is available to consumers is rapidly expanding. Shopping patterns could change and companies need to be on the forefront of their public relations else the company could be adversely affected. The majority of Tiffany’s sales are still in the brick-and-mortar store and strides are being made to expand their online presence to adapt to this unpredictable market (Tiffany Investor, 2018).

#4: Does your organization’s strategies and goals fit their environment?

The Company’s key strategic priorities are to:
Amplify an evolved brand message.
Renew the Company’s product offerings and enhance in-store presentations.
Deliver an exciting omnichannel customer experience.
Strengthen the Company’s competitive position and lead in key markets.
Cultivate a more efficient operating model.
Inspire an aligned and agile organization to win.

By pursuing these key strategic priorities, management is committed to the following long-term financial objectives:

To achieve sustainable sales growth.
To increase retail productivity and profitability.
To achieve improved operating margins, through both improved gross margin and efficient expense management.
To improve inventory and other asset productivity and cash flow.
To maintain a capital structure that provides financial strength and the ability to invest in strategic initiatives, while also allowing for the return of excess capital to shareholders through dividends and share repurchases.
(Tiffany Investor, 2019)

	Type 1	Type 2	Type 3	Type 4
Environment	Calm	Varied	*Locally stormy*	Turbulent
Strategy types	Reactor	Defender	Prospector	*Analyzer with innovation*
Organizational goals	Neither	Efficiency	Effectiveness	*Efficiency and Effectiveness*

Tiffany & Co.’s strategic priorities and financial objectives are conducive with a “locally stormy” environment. They identify the need to strengthen the company’s position and evolve their brand. They do not seem panicked in their position but aware that a change is necessary to meet their financial objectives. The company is currently analyzing there position within the industry and taking steps to ensure they can be sustainable into the future (Tiffany Investor, 2018; Tiffany Sustainability, 2019).

#5: Did your organization align across environment, strategy type, and organizational goals?

Tiffany & Co.’s strategic goals show accurately the type of environment in which they exists, though they could be more specific in how they are going to achieve their desired positioning within that environment.

Where do you think the organization should go now?

Tiffany & Co. should continue to source their materials from recycled sources and disclose the origins of their gems. This aligns with the green movements in the social trends of the day. It shows consumers that they are not just another corporation that is out for your money and do not care about the world they impact. Tiffany wishes to remain a status symbol for the elite and is making efforts with younger generations by having modern stars don their goods on the red carpet. This is a smart tactic as many of the generation can view the retailer as dated (Hellman, 2015).

Do you predict changes in their environment?

The age of the brick-and-mortar store seems to be a dying industry (Brynjolfsson, Hu, & Rahman, 2013). The environment in which Tiffany & Co. has survived in for 180 years seems to be moving online and the company is going to need to adapt. This move to the e-commerce front also poses an element of the unknown as cyber security becomes a more apparent threat (Tiffany Investor, 2018).

The demand for luxury items seems to have a bleak outlook. Economic downturn in China and the US and the unpredictability of the futures of the UK and France can adversely affect the luxury retailer. Luxury brands have seen sales drop over the past several years and the retailers are scrambling to get the edge up on the economy and the environment. The upcoming generations may have different ideas as to what qualifies as a luxury item and what is worth their money as they havee so much information at their fingertips (Danziger, 2018).

References

Alexander, N., and Doherty, A. M. (2017). Tiffany & Co.: a nineteenth century American retailer in Paris and London. LSE Business Review. Vol. 91, Issue 2, pp. 301-328. Retrieved from https://www.cambridge.org/core/journals/business-history-review/article/origins-of-american-international-retailing-tiffany-of-new-york-in-london-and-paris-18371914/97B935B9810CBD153D93A6CE08D69AAB

Bhasin, H. (2018, June 18). Marketing mix of Tiffany & Company. Marketing91. Retrieved from https://www.marketing91.com/marketing-mix-of-tiffany-company/

Carney, J. (2009, January 14). Tiffany’s (TIF) admits: the recession ate us for breakfast. Business Insider. Retrieved from https://www.businessinsider.com/2009/1/tiffanys-tif-admits-the-recession-ate-us-for-breakfast

Chin, K. (2018, August 28). Tiffany profit and sales rise above expectations. Market Watch. Retrieved from https://www.marketwatch.com/story/tiffany-profit-and-sales-rise-above-expectations-2018-08-28

Daft, R. L. (2016). Organization theory & design (12th ed.). New York: Cengage Learning. Pp 150, (1).

Derdak, T. & Grant, T. (1996). International directory of company histories. Vol. 14. St. James Press. Retrieved from http://www.fundinguniverse.com/company-histories/tiffany-co-history/

Fensom, A. (2016, August 22). Asia’s emerging markets: from bust to boom? The Diplomat. Retrieved from https://thediplomat.com/2016/08/asias-emerging-markets-from-bust-to-boom/

Fickenscher, L. (2018, November 28). Tiffany sales fall short as Chinese tourists slow spending. New York Post. Retrieved from https://nypost.com/2018/11/28/tiffany-sales-fall-short-as-chinese-tourists-slow-spending/

Hellman, J. (2015, October 5) Tiffany: a short SWOT analysis. Value Line. Retrieved from http://www.valueline.com/Stocks/Highlights/Tiffany__A_Short_SWOT_Analysis.aspx#.XF9OX1VKhhE

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Kaur, J. (2016). Allure of the abroad: Tiffany & Co., its cultural influence, and consumers. Media and Culture Journal. Vol. 19, Issue 5. Retrieved from http://journal.media-culture.org.au/index.php/mcjournal/article/view/1153

Laporte, J. (n.d.). Diamond industry – statistics & facts. Statista: The Statistics Portal. Retrieved from https://www.statista.com/topics/1704/diamond-industry/

Onstad, E. and Lewis, B. (2018, December 20). Lab-grown diamond prices slide as De Beers fights back. Business News. Retrieved from https://www.reuters.com/article/us-diamonds-debeers-synthetic-analysis/lab-grown-diamond-prices-slide-as-de-beers-fights-back-idUSKCN1OK0MQ

Owler, Inc. (2019). Tiffany’s competitors, revenue, number of employees, funding and acquisitions. Owler, Inc. Retrieved from https://www.owler.com/company/tiffany

NASDAQ. (2019, February 13). Tiffany & Co. competitors. Retrieved from https://www.nasdaq.com/symbol/tif/competitors

Neate, R. (2018, December 10). Inflation bites wealthy Britons as price rises hit luxury goods. The Guardian. Retrieved from https://www.theguardian.com/news/2018/dec/10/inflation-bites-wealthy-britons-as-price-rises-hit-luxury-goods

Tiffany & Co. (n.d.) Website. Retrieved from https://www.tiffany.com/

Tiffany & Co. (2019). The Tiffany story. Retrieved from https://www.tiffany.com/WorldOfTiffany/TiffanyStory/Legacy/

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Tiffany Careers. (n.d.) Tiffany & Co. Careers. Retrieved from https://www.tiffanycareers.com/

Tiffany Corporate Governance. (2018). Code of conduct. Retrieved from https://investor.tiffany.com/corporate-governance

Tiffany Foundation. (2019). About the foundation. The Tiffany & Co. Foundation. Retrieved from http://www.tiffanyandcofoundation.org/pdf/About%20The%20Tiffany%20&%20Co.%20Foundation.pdf

Tiffany Investor. (2019). Tiffany & Co. Investor. Retrieved from https://investor.tiffany.com

Tiffany Press. (2017, February 9). Tiffany & Co statement supporting diligence and transparency in addressing conflict minerals. Tiffany & Co. For the Press. Retrieved from http://press.tiffany.com/News/NewsItem.aspx?id=302

Tiffany Sustainability. (2019). Tiffany & Co. Sustainability. Retrieved from https://www.tiffany.com/sustainability

UN Global Compact. (n.d.). Communication on progress. Retrieved from https://www.unglobalcompact.org/participation/report/cop/create-and-submit/active/421931.

Winkler, E. (2018, November 28). Tiffany’s fortunes are married to China. The Wall Street Journal. Retrieved from https://www.wsj.com/articles/tiffanys-fortunes-are-married-to-china-1543429483

World Bank Group. (2018, January 9). Global economic prospects: East Asia and the Pacific. Retrieved from http://www.worldbank.org/en/region/eap/brief/global-economic-prospects-east-asia-pacific

Zacks Equity Research. (2018, June 18). 3 reasons why you should snap up Tiffany (TIF) right now. NASDAQ. Retrieved from https://www.nasdaq.com/article/3-reasons-why-you-should-snap-up-tiffany-tif-right-now-cm979182

SWOT Analysis of Tiffany & Co.

Strengths

History/Branding – Tiffany & Co. (Tiffany’s) have a rich history and are a well-known brand. The little blue box with a white bow, dubbed the Tiffany Box, is synonymous with luxury. The box was initially a marketing campaign for the international retailer to standardize the experience a customer had in the store (Kaur, 2016). Apart from the luxury items Tiffany’s is known for, the retailer has been influential in the design of United States (U.S.) currency, the Congressional Medal of Honor, and sporting trophies (Tiffany & Co., 2019). Tiffany & Co. made a name for itself internationally when they broadened their market and took the company overseas in 1850. This was nearly half a century before F.W. Woolworth and Gordon Selfridge, the pioneers of American retail (Alexander & Doherty, 2017). Tiffany’s still is at the forefront of international sales and was named the top American luxury brand for Chinese consumers in 2015 (Daily, 2015).

Clientele – Tiffany & Co. has historically been in the spotlight on the Silver Screen and on the Red Carpet. A successful marketing campaign made the Tiffany’s diamonds a status symbol for the rich and beautiful (Kaur, 2016). The campaign personified in the 1961 film Breakfast at Tiffany’s starring Audrey Hepburn, again in Madonna’s 1985 music video, Material Girl, and again in 1998 series Sex and the City’s Carrie Bradshaw, played by Sarah Jessica Parker (Kaur, 2016). This idea is still current (Hellman, 2015) and celebrities of today including Anne Hathaway, Angelina Jolie, and Kate Winslet still don Tiffany’s diamonds (Tiffany & Co., 2019).

Product Quality/Design – Tiffany’s has always made it a point to carry the best products with the most beautiful designs. The art of the Tiffany’s pieces is inspired by the natural world and the materials are sourced from ethically responsible mines (Tiffany & Co., 2019). Tiffany’s boasts that they reject 99.96 percent of the diamonds to ensure only the best are used in their designs. This selectivity along with high-demand, skilled designers ensures to each customer they are purchasing a unique and high-quality piece (Tiffany & Co., 2019).

Weaknesses

Expensive – In the Golden Age for Tiffany & Co., extravagant pieces were manufactured for top dollar for customers to show off the cash they had to burn (Wilson, 2009). Even still, if someone had the desire, they could purchase a watering can for $35,000 on the website (Tiffany & Co., 2019). But even the most popular engagement rings tend to be out of the price range for most middle-class Americans. The average engagement ring purchase in America is approximately $3,000 (Leonhardt, 2018). The popular Tiffany Setting starts pricing over $10,000 per ring (Tiffany & Co., 2019). The company often seems dated to younger generations that are looking for a more modern design (Hellman, 2015).

Seasonal – As most retailers, fourth quarter sales are the top money-maker and Tiffany’s needs to have a strong holiday to make numbers (Hellman, 2015). Quarterly dividends are important to investors and detriments in the top quarter can have adverse effects on any retail industry. Tiffany’s, like all retailers, must rely on the end-of-year sales which can account for more than 30 percent of annual sales (Hellman, 2015), to carry them into a new year.

Opportunities

Asia-Pacific Market – As of 2017, Tiffany & Co. has 87 stores in the Asia-Pacific region. That is approximately 28 percent of their brick and mortar stores. While there has been economic turndown in China, the remaining part of the Asia-Pacific seems to be on an economic up-turn (Fensom, 2016). It is estimated that in the next decade, upwards of two-thirds of the world’s middle class will live in the Asia-Pacific region (Hellman, 2015). This concentration of Tiffany’s target market could be an easy way for the company to capitalize on this newfound wealth.

Sustainability – Everywhere you look on the Tiffany & Co. website there are links and references to their current sustainability project. In an industry that is highly reliant upon mining and sourcing from the planet, Tiffany’s has gone out of their way to be environmentally responsible so their business can be sustainable in the future (Tiffany & Co., 2019). Tiffany’s expects suppliers to be environmentally responsible as well and they must be compliant else Tiffany’s will discontinue business (Via & Perego, 2018). This motion can help Tiffany & Co. thrive through future generations and preserve their limited resources.

Threats

Counterfeit – In 2010, Tiffany & Co. attempted to sue eBay for the advertisement and sale of counterfeit products. The judge ruled in favor of eBay stating that the auction-based site did not set out to deceive and it was only fraudulent vendors using the site (Stempel, 2010). In 2017, Tiffany’s was successful in suing Costco for $19.4 million for selling fraudulent Tiffany products (Stempel, 2017). The allure of the high-end Tiffany products keeps counterfeiters in business and Tiffany’s in competition with its fake self.

Man-made Diamonds – Synthetic diamonds in the market is nothing new (Yarnell, 2004). Though the technology to perfect a synthetic diamond is on the rise. The De Beers Group is leading company in diamond procurement and is fighting desperately against the market of man-made diamonds (Onstad & Lewis, 2018). The influx of diamonds in the market will cut into the prices of real diamonds and threaten the gem that Tiffany’s has come to rely on.

Changing Mindset – In this digital age, the connection to a customer base can typically be established on social media. The interaction of a vendor and the potential customer through social media platforms can be imperative to the successful recruitment of that customer. Young, potential customers wish to see more than just imagery on Tiffany’s social media page (Dai, 2017). These successful digital encounters often lead the young person into the store only to be let down with an old-style of shopping (Danziger, 2017). Tiffany & Co. has survived nearly two centuries and they need to continue to evolve with the times to stay in business.

References:

Daily, J. (2015, February 17). Tiffany & Co. is now the no. 1 American luxury brand for Chinese shoppers. Business Insider. Retrieved from https://www.businessinsider.com/tiffany-and-co-is-now-the-number-one-american-luxury-brand-for-chinese-shoppers-2015-2

Fensom, A. (2016, August 22). Asia’s emerging markets: from bust to boom? The Diplomat. Retrieved from https://thediplomat.com/2016/08/asias-emerging-markets-from-bust-to-boom/

Hellman, J. (2015, October 5) Tiffany: a short SWOT analysis. Value Line. Retrieved from http://www.valueline.com/Stocks/Highlights/Tiffany__A_Short_SWOT_Analysis.aspx#.XF9OX1VKhhE

Hughes, M. U., Bendoni, W. K., & Pehlivan, E. (2016). Storygiving as a co-creation tool for luxury brands in the age of the internet: a love story by Tiffany and thousands of lovers. Journal of Product & Brand Management. Vol. 25, Issue 4, pp. 357-364. Retrieved from https://www.emeraldinsight.com/doi/abs/10.1108/JPBM-09-2015-0970

Stempel, J. (2010, September 13). eBay defeats Tiffany in counterfeit jewelry suit. Technology News. Retrieved from https://www.reuters.com/article/us-ebay-tiffany-idUSTRE68C4PQ20100913

Stempel, J. (2017, August 14). Costco owes Tiffany $19.4 million for fake Tiffany rings: U.S. judge. Business News. Retrieved from https://www.reuters.com/article/us-costco-wholesale-tiffany-idUSKCN1AU29U

Tiffany & Co. (2019). The Tiffany story. Retrieved from https://www.tiffany.com/WorldOfTiffany/TiffanyStory/Legacy/

Tiffany & Co. (2019). Sustainability. Retrieved from https://www.tiffany.com/sustainability

Via, N. D. and Perego, P. (2018, January 16). Determinates of conflict minerals disclosure under the Dodd-Frank Act. Business Strategy and the Environment. Vol. 27, pp 773-788. Retrieved from https://onlinelibrary.wiley.com/doi/epdf/10.1002/bse.2030

Wilson, C. (2009, July). If bling had a hall of fame. The New York Times. Retrieved from https://www.nytimes.com/2009/07/30/fashion/30CRITIC.html.

Evaluation of Tiffany & Co.: Efficiency and Effectiveness

“For more than 180 years, Tiffany & Co. has been synonymous with luxury and style. Few American companies have such an illustrious history. It begins with a founder’s vision of beauty that was brought to life through unassailable standards of excellence. As awards and accolades accrued, Mr. Tiffany led his company’s growth from a New York City legend to a jeweler of international renown.”

(Tiffany & Co., 2019)

Image Retrieved from https://niceice.com/tiffany-co-confident-new-hires-will-revive-lagging-business/

Many people worldwide know the company Tiffany & Co. The company’s has been around for 182 years through all of its ups and downs and while wearing many faces. The company originally marketed itself as selling “fancy goods” which mainly consisted of costume jewelry. A few years after inception the co-founders, Charles Lewis Tiffany and John F. Young were successful enough that they altered their inventory to only include fine jewelry and other knick-knacks (Derdak & Grant, 1996). The company aired on the side of lavish for many years and commissioned ludicrous pieces for high-end clients to include a gold chamber pot for actress and singer, Lillian Russell (Wilson, 2009).

Over the years Tiffany & Co. struggled with its identity. Many companies have purchased Tiffany and tried revamping the company’s style and clientele. Through it all, the company has help onto its mantra of luxury (Derdak & Grant, 1996). Tiffany is often synonymous with little blue boxes full of upscale gifts. The company strives to uphold its view as the definition of style and conveyor of priceless gems.

Effectiveness is the degree to which an organization achieves its goals whereas efficiency is the amount of resources used to achieve an organization’s goal based on the materials, costs, and employees necessary to a given level of output (Daft, 2013). The Tiffany website states:

“At Tiffany & Co., we believe it is out moral duty to sustain the natural environment. As a result, we are committed to not only minimizing our impact as a business but also using our voice and action to positively affect communities and protect the planet.”

(Tiffany & Co., 2019)

Tiffany & Co. has made phenomenal strides to make their company sustainable as the global economy grasps onto the remaining natural resources. Being a company that sources most of their goods directly from the Earth through mining, they are at the mercy of these mines producing enough to keep them in business.

The company also strives to be inclusive in their employee base and are often seen at the forefront of women’s rights and LGBT inclusion. In 2017, the company endorsed the UN Women’s Empowerment Principles in an act of promoting inclusion and fairness in the workplace (UN Global Compact, n.d.).

Based on these findings, Tiffany & Co. could be considered at a five in both their effectiveness and efficiency. Due to their inclusion efforts, approximately 60 percent of the management roles are held by women (Tiffany & Co., 2019). This is staggering compared to the measly 24 percent representation of women in management among the Fortune 500 companies (GTIL, 2018).

Tiffany & Co. is focused heavily on their sustainability and making many efforts within the environment, they are also succeeding on the books and in the market. With positive earnings per share and increasing free cash flow, the company’s outlook is positive for the time being in this highly volatile market (Aaron, 2018).

While these ratings in efficiency and effectiveness may be generous, the portrayal of the company through online platforms support that Tiffany & Co. would agree and place themselves high in both scorecards. The goal of Tiffany has certainly changed over the years and previous versions of itself may have fallen short in efficiency but the effectiveness in branding and perseverance of Tiffany & Co. is unique.

Tiffany & Co. placed within the Efficiency and Effectiveness Scale.

References:

Aaron, M. L. (2018). Tiffany reports fiscal 2017 results. Tiffany & Co. News Release. Retrieved from https://investor.tiffany.com/news-releases/news-release-details/tiffany-reports-fiscal-2017-results.

Daft, R. L. (2013). Organizational theory & design. Cengage Learning. Twelfth Edition, pg. 637.

Derdak, T. & Grant, T. (1996). International directory of company histories. Vol. 14. St. James Press. Retrieved from http://www.fundinguniverse.com/company-histories/tiffany-co-history/.

Grant Thornton International Ltd. (GTIL). (2018). Women in business 2018. International Business Report. March 2018. Retrieved from https://www.grantthornton.global/en/insights/articles/women-in-business-2018-report-page/.

Tiffany & Co. (2019). For the Press. Retrieved from http://press.tiffany.com/AboutTiffany.aspx.

UN Global Compact. (n.d.). Communication on progress. Retrieved from https://www.unglobalcompact.org/participation/report/cop/create-and-submit/active/421931.

Wilson, C. (2009). If bling had a hall of fame. The New York Times. July 2009. Retrieved from https://www.nytimes.com/2009/07/30/fashion/30CRITIC.html.

Dream Job #2

Employee Advocates: Investment in Human Capital (EAIHC) was purchased by Human Supporters, a Canadian based IT company. Human Supporters wanted to keep EAIHC’s organizational design while incorporating IT support for customers and developing business in both the Canadian and U.S. markets. The revised organizational design is below.

My Dream Job

Employee Advocates: Investment in Human Capital (EAIHC)

This company is a third-party HR partner that helps companies with their human capital. Services include hiring and maintaining effective employees with implemented HR strategies.

Operative Goals:

Continuing employee education as new rules, regulations, and training methods regarding HR are being updated and changing.
1. There are constantly updates and new theories about effective HR management. The employees at EAIHC will dedicate no less than two hours each work week to research into an HR related topic.
  1. Staff will report the topic they researched each week a staff meeting.
Analyze business operations routinely and implement corrections needed.
1. The COO and Administrative Manager will work together to perform weekly internal audits of operations and controls. Any category finding a deficiency will be addressed and corrected.
  1. Categories with repeated deficiencies will be evaluated and additional training will be implemented for staff or new procedures will be implemented to correct the problem.
Defining clear roles for employees.
1. EAIHC believes in cross-training employees for a broad understanding of the organization. However, clear expectations for each role will be defined and adhered to. The CEO, COO, and Administrative Manager will work together to define these roles and give each employee a realistic job preview.
Increase clientele by five percent each year.
1. The Marketing Specialist will develop strategies for recruitment of clientele. Many current clients will be encouraged to recommend EAIHC’s services to other companies for additional benefits to their own HR strategies.
Maintain internal investment in human capital.
1. The CEO, COO, Administrative Manager, and Internal HR will work to practice what the company preaches, so to speak. While the staff is highly trained in HR strategies, internal HR may fall short of expectation. EAIHC believes the best form of advertising is internal success.
  1. Retention and organizational culture within the staff are very important to the top management team.

Organizational Structure:

When hiring EAIHC, the client will be assigned to a team equipped with personnel ready to help improve human capital. The teams are headed by an HR Specialist that will work with the client and the CEO of the organization to come up with the best strategies and implementation. For reference, an organizational structure chart is below.