Tiffany & Co SWOT & PESTLE Analysis

Strength

1.Well-known brand, powerful and proprietary symbols: Tiffany & Co. carries 180 years rich legacy and consumers reckon it as sophisticated high-quality gemstone/diamond jewelry maker with excellent customer service. The company has elegant landmark stores in important cosmopolitan cities across America, Europe, Asia Pacific and Japan. Also, the Tiffany’s proprietary symbol, robin’s egg coloured the ‘Blue Box’, is highly recognized in the world of luxury. The company spends 7% of its earnings in brand maintenance as it is truly its greatest asset. A part of Tiffany’s heritage is also derived from it being environmentally responsible and using raw materials and products which are exclusively from certified sources.

2. Partnership with Celebrated Designers: Principal product category of the company is jewelry which accounted for 91% of worldwide net sales in 2017. So it is necessary to maintain its repute as a high-end jewelry maker. Hence, Tiffany invests heavily in designing of exquisite jewelry with independent ”named” designers like Elsa Peretti, Paloma Picasso, and Jean Schlumberger. Tiffany has been the sole licensee for products designed by the internationally renowned designer Elsa Peretti since 1974. Products designed by Peretti has contributed to 8%, 9% and 9% of Tiffany’s worldwide sales in 2015, 2016 and 2017 respectively

3. Strong Financial Position: The company’s strong financial position is evident from the following statistics like increased net profit margin of 12.5% which is more than industrial average; DTR (debt to equity ratio) is 0.35 is less and also lower than the industry average. These financials are responsible for the company’s bullish stock performance with a rise of 25.32% stock price vis-à-vis last year.

4. Global Reach with omni-distribution channels: Tiffany is present in 28 countries globally and operates through different channels like retail, internet, business-to-business (items particularly developed for the business markets), and wholesale distribution (merchandise sold to independent distributors for resale). The company has 315 company-operated stores along with e-commerce facilitated websites in 13 countries. Telephonic orders and catalogues also help in sales in several markets. Sales transacted through the website, phone orders and catalogs comprised of 7% of worldwide sales in 2017. The total gross retail square footage is 1,321,200 of all company-operated Tiffany’s stores as of January 2018, which is greater compared to competitors.

Weakness

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Opportunity

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Threat

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Political

Economical

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Social

1. The desire of exquisite customer experience: Allison Samek, CEO of luxury retailer Fred Segal, explains “Now more than ever, the luxury consumer is looking for an experience”. So, management at Tiffany is determined to increase its expenditure in a technology, visual merchandising, marketing communications, digital, and store presentations, which it considers are necessary to attain its longer-term sales, margin and income growth objectives by rendering exquisite customer experience.

2. Demographic changes driving innovation: Demographic changes like dropping marriage rates in the United States and Europe, growing engagement ceremonies in remaining parts of the world, etc. compels the company to think of alternate stream to grow the sales. One such example is an opportunity to target new age customers like LGBT community with rising of same-sex marriages to leverage the tradition of gifting jewelry to as a token of marital commitment.

Technological

1. Investment in IT infrastructure: New and current data privacy laws could lead to a significant data security breach of the Company's information systems could increase the Company’s operational costs, subject the Company to claims and adversely affect its business. The Company's implementation of new information technology or information systems and/ or use and reliance on web-based hosted (i.e., cloud computing) applications and systems for the storage, processing, and transmission of information, including customer and employee personal data could reduce the risk of breach and increase protection.

2. The significance of well-designed website: The website supplies a customer with exciting and compelling information and acts as a catalyst to visit stores. Tiffany’s CEO, Alessandro Bogliolo, stated: “Research indicates that many customers first visit the website to learn about our Company and products before visiting our stores.” The Company currently operates e-commerce enabled websites in 13 countries as well as informational websites in several additional countries. In 2017, Tiffany continued to enhance its website and posted a solid sales increase.

Legal

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Environmental

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