T2 2019 MPM703: Business Analysis and Strategy Report on Tiffany & Co.

This report provides a comprehensive business analysis of Tiffany & Co., focusing on its external environment and strategic positioning. The analysis begins with an executive summary outlining the report's objectives and key findings, followed by an introduction to the company. A PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors impacting Tiffany & Co.'s operations, with an evaluation of their influence. The report then applies Porter's Five Forces model to assess the competitive dynamics within the luxury jewelry industry, including the bargaining power of consumers and suppliers, and the threat of new entrants and substitutes. A strategy canvas is used to analyze the company's competitive profile. Critical success factors and a discussion of blue ocean strategy are included to highlight areas for strategic improvement. The conclusion summarizes the key insights and recommendations derived from the analysis, supported by a list of references. This report is a thorough examination of Tiffany & Co.'s business environment and strategic challenges.

Running Head: BUSINESS ANALYSES AND STRATEGY 0
Business Analyses and Strategy
(Student Name)

BUSINESS ANALYSES AND STRATEGY 1
Table of Contents
Executive Summary.........................................................................................................................2
Objective of Study.......................................................................................................................2
Key Findings................................................................................................................................2
Introduction......................................................................................................................................3
PESTLE Analysis............................................................................................................................4
Influences.....................................................................................................................................6
Five Forces Analysis........................................................................................................................6
Key Forces...................................................................................................................................9
Strategy Canvas...............................................................................................................................9
Critical success factors...............................................................................................................10
Blue Ocean.....................................................................................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................14

BUSINESS ANALYSES AND STRATEGY 2
Executive Summary
Macro environment is one of the essential factors that are required for the company to grow in
the competitive market. One of the leading companies Tiffany & Co. also greatly affected from
the changes that is occurred in the global market. The company expanded its business in the
global market that enhances opportunity as well as threat for the company to the certain extent
which is depends on the change in the macro environment. In order to analyze the political
environment and other environment of the global market, it represents the positive environment
for the company that supports them to grow. However, the strict regulation of government to
protect the environment enhances the overall cost of the company to the certain extent.
Moreover, while analyze the industry in the global market, the consumer has low bargaining
power and the supplier has moderate power to bargain that provide an opportunity to the
company to enhance its revenue and target its consumers more efficiently. However, in the
company faces huge competition from its competitor in the global market. Therefore, it is
required for the company to adopt attractive and innovative strategy to compete its competitor in
an effective manner which is discussed in the following report.
Objective of Study
 The objective of the study to analyze the fluctuation in the macro environment of the
global market.
 Analyzing the competitor that are involved in the industry
 Impact of fluctuation in the market on Tiffany & Co.
Key Findings
 It has been analyze d that the company face challenges in the international market due to
the reason of strict rules been adopted by the government of the global market to protect
the environment.
 The main consumers of the company are premium consumers and the bargaining power
of consumers is low.
 It is required for the company to adopt innovative strategies in the market to compete its
competitor.

BUSINESS ANALYSES AND STRATEGY 3

BUSINESS ANALYSES AND STRATEGY 4
Introduction
In analyzing the macro environment, it is essential for the organization to identify the factors that
in turn affect a number of vital variables that influences the supply as well as demand level of the
company as well as its cost. The business environment comprise of all the factors that has an
effect on the operation of the company as well as which also include suppliers, consumer,
competitors, trends of industry, social and their economic factor (Kwak et al., 2019). The
changes occur in such factors create great impact on the overall performance and growth of the
company. One of the leading companies Tiffany & Co. also greatly affected from the changes
occurs in the external environment (Mak and Chang, 2019). Tiffany & Co. is one of the most
renowned luxury Jeweler companies over the globe. The corporation was originated in the year
1837 in the United States government, New York City by Lewis Tiffany and John Young B.
Nowadays the company has opened more than 200 stores and also covered more than 22
countries over the world. It is considered a one of the second largest luxury jewelry retailer in the
world. The Company offer large scale of fine jewelry among with the sterling silverware,
timepiece, stationery, eye ware, scarves as well as other accessories (Peltekoğlu, 2019). The net
sales of the company declined from $2.9 billion to $2.86 billion as well as $2.71 billion till the
year 2009. The company has four product segments from largest to smallest which include
wedding bands, engagement jewelry, fashion jewelry, statement jewelry as well as non-
accessories. The small category includes leather goods, timepiece fragrances, as well as crystal.
In the year 2018 the annual revenue of the company was $4169.8 million. In order to analyze the
financial position the debt to equity ratio is 0.35 which is lower than industrial average. Such
financials are accountable for the strong standard of the corporation’s recital with the growth of
25.32% stock value. The business devotes 7% of its earning in the product upkeep as it is
truthfully its utmost resources. It carries 180 years rich legacy as well as consumer estimate it as
erudite high quality jewel and diamond jewels market with providing outstanding consumer
facility. The business operates in in the international market therefore, the changes occur in the
marketplace affected over the presentation of the business to the certain extent (Tiffany, 2019).

BUSINESS ANALYSES AND STRATEGY 5
In the subsequent part there will be thorough examination of the peripheral environment that
affected overall the performance of the company and the way the corporation handle with such
encounter in an effective manner.
PESTLE Analysis
PESTLE is one of the framework or tool that is used by the marketer to analyze as well as
monitor the macro environmental factors that have a great impact on the company. Therefore, the
PESTLE Analysis of Tiffany & Co. is explained n below points:
Political
 Pressure from Government on Environment: With the current concern over the
ecological fortifications as well as responsible mining. Tiffany & Co. has to take in
respect the central antiquated laws to endorse the responsible mining as well as also been
vigorously stimulating the responsible mining for its minerals as well as metals.
Economic Factors
 Growth of Economy: there has been constant growth on the Gross Domestic Product in
the area of Asia Pacific in the current years. The growing prosperity in Asia hence
specifies the cumulative ultimatum for fine jewelry as well as extravagance product.
 Enhancement in the spending of consumers: as an outcome of the above-mentioned
factors, there is a great upsurge in the outlay of the consumers over luxury products such
as fine jewelry. Merrill Lynch has stated that the extravagance products marketplace has
continuously been hard with enhance in the sales as well as profits of the company even
in the time of financial crises therefore, Tiffany & Co. enjoyed such environment to raise
its fund in an operative way (Fozer et al., 2017).
Social Factor
 The longing of attractive consumer experience: Allison Samek, the CEO of luxury store
Fred Segal reviews that “Now further more than forever the extravagance customer is
considering for an experience”. Therefore, the administration at Tiffany is resolute to
enhance its outlay in a knowledge, communications of marketing, graphic retailing as

BUSINESS ANALYSES AND STRATEGY 6
well as store presentation that it deliberates are require to accomplish its long term sales,
revenue progress as well as margin growth objective by execution the delicate consumer
knowledge.
 Changes in Demographic pouring invention: the demographic changes such a
plummeting of rates in marriage in the world, rising engagement ceremonials in the
residual part of the world induces Tiffany& Co. to reflect of the substitute brook to raise
the trades. One such instance is an opportunity to target new age consumers such as
LGBT community with the increasing of same-sex marriage to influence the custom of
gifting the jewels to as a symbolic of matrimonial promise (Aithal, 2017)
Technological Factor
 The number of internet user is increasing in an effective manner in the international
market. The country is considered as the major state of internet users in the biosphere till
the year 2009. Therefore, it provides an opportunity to the Tiffany & Co. to target such
consumers in an effective manner.
 The implication of well-made website: the website supplies consumers with the
exhilarating as well as convincing the info with the performances as a substance to visit
the supplies. The CEO of the company states that “the research represent that most of the
consumers initially visit the website to study about the corporation as well as products
before visiting the provisions”.
 Investment in infrastructure of IT: new as well as recent privacy of data it could also lead
to a momentous at secret fissure of the informational system of the company that could
enhance the operational cost of the company to the certain extent, subject the
organization to claim as well as unfavorably distress it’s corporate. The enactment of new
IT (information technology) of the company or use and dependence on web based held
application with the system for the processing, storage as well as transmission of the
information that include personal data of employee, could reduce the risk of the reach as
well as also enhance the protection for the company (Oviedo-Trespalacios et al., 2019).
Legal Factor

BUSINESS ANALYSES AND STRATEGY 7
 Regulations of Foreign Trade: Asia Pacific Cooperation may deliver the motivation for
a serial of two-sided trade contracts. In the current year the country China as well as
United States contracted a PNTD (Permanent Normal Trade Relations). The reduction of
tax rate in China on diamond ingress from 17% to 4% also endorses trade in an effective
manner. It supports Tiffany & Co. to make available their product at low price to its
consumers.
Environmental Factor
In the recent years the government of all over the world has taken certain initiative and imposes
some regulations on the businesses that affected the environment. Cyanide contamination affects
the health of human beings as well as also created social issues that have raised the calls for
responsible mining operations. Therefore, Tiffany is forced to adopt sustainable business to
satisfy the government as well as consumers. It enhances cost to the company to the certain
extent (Pulido-Fernández, Cárdenas-García and Espinosa-Pulido, 2019).
Influences
The three influences that may affect the whole industry in the future are political factors, social
factor as well as economic factor that are enlightened in below points:
Political factor: The changes occur over the control of government may affect the overall
industry to the certain extent. The strict rules impose by government create challenge for the
business to operate its business more smoothly.
Economic factors: the change in the factors of economics has great influences for the future
growth of the industry. Downfall in the GDP rate may affect the industries in attracting new
investors for their business that may affect overall performance of the industry to the certain
extent.
Social factors: the change in the taste and preference of the consumers as well as their lifestyle
greatly influence the demand of the products. It creates direct impact over the future industry at
greater level due to the main reason the growth of the industry s depend over the demand of the
consumer towards particular product (Chung and Coates, 2019).

BUSINESS ANALYSES AND STRATEGY 8
Five Forces Analysis
Bargaining power of Consumers
The barging power of consumers in such industry is low due to the certain reasons:
 Scrappy market: the customers of fine jewelry are mainly disjointed across the
geographic location (such as Asia Pacific, UK, as well as US) therefore it represent that
their bargain influence is comparatively low.
 Product Diversity: the goods in the sector of fine jewelry are also extremely distinguished
such as prosperous customers follow special projects by Tiffany’s famous performers
Paloma Picasso as well as Frank Ghert, while the younger customers are attracted to
colleting the “Charmed by Tiffany” bracelet charms. Therefore, such influences result in
the incapability of the customers to adjustment to her crops o brands easily therefore it
represent that their bargain power is low (Peltekoğlu, 2019).
Therefore, it provides an opportunity to the Tiffany & Co. to enhance its overall sales in more
operative and well-organized way.
Bargaining power of Suppliers
The bargain power of suppliers is moderate due to the reason:
 Vertical Integration: the bargain influence of suppliers in the fine jewelry business is stiff
due to the main reason the prominence of diamonds as a raw material.
 Other supplier’s limitation: the sales soring with the global diamond jewelry, the
dwelling supply level may also enhance the power of suppliers towards the jewelry for
profitability by raising the prices (van den Brink, 2019).
Therefore, Tiffany & Co. has continued its own mining business to control over the cost in an
effective manner.
Threat of new entrants
The threat of new entrants is low due to the certain reasons as they are examined in below points;

BUSINESS ANALYSES AND STRATEGY 9
 Required high capital investment: to acquire high quality diamonds, the high initial start-
up cost is required that serve as the main entry barrier for the new entrants. The small
company resists entering in such market due to requirement of high investment.
 Limited Distribution Channels: a the leading companies has idea and access to
widespread dispersal frequencies that new applicants lacking connections with the
distributors of jewelry as well as stores faces limited retail or dispersal channels therefore
they are incapable to produce considerable threats.
 Product differentiation: the diversity of product plays a vital role in plummeting or
cutting off the competition in the industry. The new participants face the problems in
rival with the leading companies such as Tiffany as well as unique trademarked design
collections (de la Rocha, 2019).
Threat of Substitutes
The threat of substitutes in such industry is moderate to high due to the following reasons:
 Low brand loyalty: associated to the sturdy brand loyalty in US, the customers of
international market have a standing for fraternization as well as corresponding the
noticeable brands rather than stabbing to one, it create issue of low brand loyalty that
enhances the threat of substitute
 Counterfeit Good: the imitation design sol at a fraction of original jewelry is one of the
main substitutes in the industry of jewelry. The proliferation of counterfeit products as
well as inability to eradicate them has caused the company to lose its revenue to the
certain extent.
Therefore, Tiffany & Co. is forcedly involved in the process of innovation to compete in the
competitive market.
Rivalry among Competitor
The competition in such industry is high. In view of rising wealth as well as demand of jewelry
in the world, the larger number of companies are uniting in the marketplace as well as proposing
more selections to customers has strengthened the competition. The close rivals are Cartier,
DeBeers as well as Bvlgari that compete in the global market (Ghosal, Biswas and Prasad, 2019).

BUSINESS ANALYSES AND STRATEGY 10
Key Forces
The key three forces from the five forces models are explained in the below points:
 Competitor among the rivals is the key forces that affected overall demand of the
company to the certain extent. Te increase in the competition in the industry enhances the
chance of losing the consumers that directly created great impact over the revenue of the
company.
 The substitute of the product is also the key forces that affected over the demand and
supply of the company. The increase in the demand of imitation jewelry will decrease the
demand of Tiffany’s product that affected overall performance of the business to the
convinced extent.
 The bargain power of consumers is also the key forces from five force model that
pretentious overall performance of the company. The increase in the bargain power of
consumers forces the company to control over its cost that enhances the level of tension
among the management of the company to the certain extent.
Strategy Canvas
Price Quality Innovative Design Brand Awarness
0
1
2
3
4
5
6
7
Tiffany & Co.
Pandora
Blue Nile

BUSINESS ANALYSES AND STRATEGY 11
In order to analyze the competitor of the company Tiffany & Co., it can be concluded that the
price or products of Pandora is high as comparison with the Tiffany & Co. due to the main
reason the quality of its product is high that attract the consumers towards its product in an
effective manner. Pandora is one of the leading brands in the global market the word of the
company is derived from Spanish term. The brand creates the piece that the individual expect to
find hidden gems in the vintage shops. The design of the Pandora is inspired b he vintage
accessories pieces and made from high quality metal that enhance its overall cost. The quality of
Pandora is high as companion to the Tiffany & Co. and Blue Nile that made them competitive in
the market. The company majorly focuses over its quality of the product and tries to present its
product in an innovative manner that made the corporation more competitive in the marketplace
in an operative way. It made great satisfaction to the consumers that made them leading in the
global market. Therefore, it gives great rivalry to the business to the certain extent.
Furthermore, the price of Blue Nile is also high while comparing with Tiffany & Co. and low
while comparing with Pandora. It majorly focuses to control over its price it compromising with
the quality of product that made the business less competitive in the market. However, the low
price and strong marketing strategy attract the consumers towards its product in an effective
manner.
 Tiffany & Co. is one of the leading brands. The company faces huge competition from
Blue Nile and Pandora. It forces the company to control over its cost as well as maintain
quality in the market. The company mostly prefers to introduce innovative design in the
market to make the consumer feel unique and happy. The company also focus over its
marketing strategy however, the company face big challenge from such both companies
due to the reason of it maintain high goodwill in the market (Khanmohammadi, Zandieh
and Tayebi, 2019).
Critical success factors
The five critical key success factor of such industry are explained in the below points:
 Being consistent in managing the brand image as well as strategy is one of the essential
key factors that is required for the company to focus on.in the case the company

BUSINESS ANALYSES AND STRATEGY 12
successfully would bale to maintain its brand image in the market as well as adopted
attractive strategy will help in achieving targeted objective of the company in an effective
manner.
 The investment in the segment of retailing as well as balancing the distribution channels
is also an success factor for the companies in such industry
 Being dedicated towards the innovation a well as developing new product is one of the
paths of success to the company in an effective manner.
 Managing the gross profit of the organization
 Investing in the communication as well as other media to develop the brand awareness in
the market (Szyliowicz and Green, 2019).
Therefore such factors help the company to grow in the market in more operative and well-
organized way.
Blue Ocean
Blue ocean strategy is one of the strategies that stimulate pursuer of differentiation as well as low
cost to open up in a new market space as well as generate new mandate for that product in an
effective manner. It is around making as well as seizing the unconcealed market space, thus
making the rivalry extraneous.
Therefore, while analyzing the strategy canvas, it is required for the company to introduce digital
jeweler in the new market to compete its competitor. The competitor of the company providing
similar product to its consumers at competitive price that attract the consumers of Tiffany & Co.
a well towards that brands to the certain extent, thus it is required for the company to adopt blue
ocean strategy market to attract the consumers in an effective manner. The company can
introduce digital jewelry with precious stones and pure that will not only make the individual
beautiful but also make them feel updated towards the technology (Christodoulou and Langley,
2019).
Such strategy will help the company to maintain unique proposition that will create no space for
competition in the market due to the main reason, the rival companies are still continuing with

BUSINESS ANALYSES AND STRATEGY 13
the traditional jewelry method. Therefore, it will provide new market to the company in an
effective manner.
Furthermore, the company can add gold plated smart watches to attract men for their product. It
will enhance the market segment of the company that will support them to grow in the market
more efficiently and effectively. The company can able to target its consumers in new market
with innovative product in an effective manner. It will help the company to enjoy monopoly and
can able to enhance its market segment more efficiently and effectively.
Therefore, with the help of such strategies the company can able to create new market for its
business that will be free from any kind of competition. It will help the company to target its
consumers in more efficient manner as well as can able to enhance its profit margin in more
effective manner with an efficient way (Christodoulou and Langley, 2019).
Conclusion
It can be concluded from the above analysis that the macro environment created great impact
over the enactment and development of the company to the convinced extent. Macro
environment include the external factors such as political, economic as well as other aspects that
stimulus the business to the certain extent. The changes occur in the peripheral situation
exaggerated the industry and its business to the certain extent. Tiffany & Co. is one of the
leading companies in the global market. The company has gained its image in the jewelry
industry that made them competitive in the market. It was founded in the year 1837. The
company now operated in more than 22 countries that enhance its target segment in an effective
manner. The annual income of the company is $4169 million and it spends 7% of its earning in
the brand maintenance that made them competitive in the market. The company has expanded its
business in the international market as well. In order to analyze the external environment of
global market, the political and legal condition of the company stable. The political environment
of the country is full of certainty that attract the new investors in an effective manner. Moreover
the economic condition of the country is also very stable. The country supports the business
through cutting in the tax rate. However, the company has imposed certain rules and regulations
on the companies to protect the environment from the pollution that occur from activities of
business. It created great impact over the performance of Tiffany & Co. to the certain extent.

BUSINESS ANALYSES AND STRATEGY 14
Furthermore, while analyzing the industry of the jewelry in the international market the level of
competition in such industry is high due to the reason of high demand of jewelry attract firms to
expand its business in such industry. The bargaining power of the consumers and suppliers is low
to moderate. It depends over the situation and environment of the country to the certain extent.
The threat of new entrant is low due to the reason high investment is required in such industry
that resists the new firms to enter in such market. Therefore, it represents positive as well as
some negative vibes that enhance cost of the company to the certain extent.
The man competitor of Tiffany & Co. is Pandora as well as Blue Nile as such companies deliver
quality products in an innovative manner that satisfies the consumers efficiently. Therefore to
compete with its competitors, it is required for Tiffany & Co. to enter in the market with an
innovative strategy. The company can introduce tech jewelry to its consumers that attract them in
an effective manner. It will help in covering maximum consumers in an effective manner.

BUSINESS ANALYSES AND STRATEGY 15
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