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:

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

Dai, W. (2017, August). The relationship among customers’ social engagement in Facebook, brand equity, customer satisfaction, and their intention to purchase Tiffany jewelry. The Graduate School of Bangkok University. Retrieved from http://dspace.bu.ac.th/bitstream/123456789/2598/1/wei.dai.pdf

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

Danziger, P. N. (2017, July 3). Tiffany and three common mistakes marketers make with millennials. Forbes. Retrieved from https://www.forbes.com/sites/pamdanziger/2017/07/03/tiffany-three-mistakes-marketers-make-with-millennials/#18ea73a954af

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

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

Leonhardt, M. (2018, August 7). Millennials spend an average of $3,000 on an engagement ring – here’s how to get the most for your money. CNBC. Retrieved from https://www.cnbc.com/2018/08/07/millennials-spend-3000-dollars-on-a-engagement-ring.html

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

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.

Yarnell, A. (2004, February 2). The many facets of man-made diamonds. Chemical and Engineering News. Vol. 82, Issue 5, pp 26-31. Retrieved from http://www.kestenbaum.com/Articles/Man-Made%20Diamonds.pdf