Strong Brand with Relatively Few Retail Stores - Case Study Example

Running head: COMPETITIVE STRATEGIES Competitive Strategy Insert Name Institution Introduction Tiffany is a multinational jeweler that is very successful due to the strategic measures that are put in place in its operations. Most ventures collapse not necessarily due to lack of resources like funds but inefficiency in the overall organization structure of the business. Many scholars have scrutinized the various strategies that have been implemented in the arrival to the present state and level of the venture. This paper will outline the various issues that have been implemented in consideration of their efficiency in the ultimate contribution to the business. More precision will be drawn towards the strategic management strategy in the context of the market penetration, product development and market development. In conclusion, the paper will arrive at the best recommendations and discuss their impacts on the business and the level to which they should be absorbed or discarded (Cuneo, 1999). Although Tiffany Company is doing well already the trend must be maintained and continually changed to match with other alterations that have influence in the business either directly or indirectly. All the discussion will be based on the factors that contribute to success of a business, the implementation methodology and the extent to which they influence the business trend. The information will be very useful as it will identify the existing gaps concerning marketing and highlight the directions for the future research. Moreover, it will be useful to the policy formulators as well as the entire population fragmentally as the respective expectation will be well spelt out in the recommendation. SWOT analysis One of the successful models that are presently employed in Tiffany Company includes strategic management that aims at identification of the trend of the business. The strength analysis is done at the various locations to determine the capacity of the Company in the realizing of its success. The more the strengths the higher the chances that the company will succeed and therefore there is need to maximize on their extent to get as many benefits as possible. Tiffany Company has a strong direct sales strategy well outlined in four different sectors that involve multiple direct distribution channels. The many sites of the distribution of their products aids in increasing the brand salience by increasing the number of people who consider the products for purchase leading to high revenue in the company (Hessen, 1999). Tiffany Company has many directly operating stores in many strategic places that increase the level of the consumption of the product. Moreover, this would mean that the sales procedure\s are simple and therefore encourage the consumer to engage in the activities of the business. The company is well established globally as in Asia, United States and Europe there by increasing the consumer degree of coverage that increases the probability of growth of the business. The direct marketing strategy is also an asset as this incorporates the online activities like shopping and the communication services thereby broadening the business scope even further. The company is also well specialized and deals with the selected merchandise that increases the quality of the products due to concentration on an area of specialization increasing innovation and creativity. Tiffany Company also implements a very strong strategy on the differentiation of products that increases the scope of the business as it is involved in management of many products as well as reinforcement in the uniqueness and creativity leading to high demand as well as high product quality. The company has a very strong brand image as compared to other of its competitors that is associated with high quality and elegance. The brand image needs to be maintained and promoted since the environment and the situations are not in situ but rather dynamic. This should be done in close monitor to the key competitors in their order of the merit (Zimmerman, 2002). Internationalized business that is closely linked to the existence of the globalization has a direct positive impact to the company. For example in 2009, 50% of the company’s revenue came from the international retails (Cuneo, 1999). This is well complemented by the vertical integration that the company implements in an aim to reduce the number of intermediaries as well as reduction of the bargaining power by the supplier. This will in turn reduce the instances of overprices due to shortage as well as enhancement of the supply chain thereby ensuring that the products are constantly in the accessibility by the consumers so as to create a sense of reliance (Hessen, 1999). There are also negative traits that concern Tiffany Company that act in the limitation of the success of the business and they should therefore be minimized as much as possible so as to ensure that the failure chances are in the bare minimum. The company was involved in the assortment of its products to incorporate the middle class income people by subsiding of the prices. Despite the assumption that this move would lead to additional market penetration, the affluent disengaged from the products purchase as they were now common and the brand image was perceived at a lower regard. There is also a lower demand in Asia region as the residents are associated with mixture of different products more than loyalty to a brand. Despite the vertical integration that involve establishment of its own mining industry it has very low mining expertise that has led to incurrence of so many losses (Rosen, Tunick, & Samuels, 2004). Business opportunities are identified from the strengths and should be fully utilized to realize maximum success. Tiffany Company should expand the retail stores and emphasize on the smaller enterprises in the beginning as they require minimum capital. There is an annual growth of 5%, this has led to an increase in the increase in Gross Domestic products resulting to continued economic growth (Rosen, Tunick & Samuels, 2004). There is an increase in the online sales due to the increase in the number of people who use internet. Moreover, the inclusion of the men’s fragrance will increase the demand of the products due to the lack of competition. There are also ventures of new businesses as the case 2006 where Tiffany Company signed a treaty that was unite to Luxottica in order to understand the niche market (Hessen, 1999). There is a threat in the high demand of diamond that can lead to high prices by the suppliers but this can be mitigated by the vertical integration. The incidence of the counterfeit goods is likely to tarnish the brand image especially in the time of economy crises where people always go for the cheaper products. In addition, the economy of a country will be directly proportional to the company profitability (Zimmerman, 2002). PESTEL Politics involve the policies that will influence the operation of the business like the foreign trade regulation that increased the market penetration through the signing of a treaty in 1999 between United States and China reduced trade tax. Moreover, the government stability will encourage business development while the opposite will deter. The economic growth contributed by the Gross National Income that will raise the demand in jewelry. Globalization subsides the production costs as well as encourages product development. The social perspective can be explained by the occasions like weddings and engagement that will directly influence the demand of the jewel (Cuneo, 1999). Technologically the cost of production is cut down while there is a rise in the innovation and the quality level. The company must also ensure responsible mining thereby ensuring sustainable environment and present success as well. This can be enhanced by using legal permits and licenses that will ensure that there is safety in terms of health. Porter’s five forces The power of the buyer is relatively low evidenced by the fragmented market and the bargaining power of the consumers is low inhibiting the development of the product. A rise in the differentiation of the product will lead to development of the product and increase the penetration to the market. The bargaining power of the suppliers is moderate and can only be mitigated by the vertical integration. The threat of the new entrants is low due to the high capital investment that is required, the limited distribution channels as well as product differentiation when compared to Tiffany Company (Hessen, 1999). Threats of the substitute are pronounced due to low brand loyalty, substitution with cheaper goods as well as brand name tarnish by the counterfeit goods. The direct competitors are well pronounced especially De Beer the largest diamond supplier as well as Cartier the largest jewelers but a lower brand name than Tiffany (Cuneo, 1999). Recommendations Tiffany Company should increase the penetration of its markets by ensuring that it remains standardized, increase the number and the size of its size. This can be done through the gradual development of the product by collaboration with the Asian Jewelers. Moreover, Tiffany Company must ensure that the ultimate goal of the market development is achieved by focusing on its opportunities and the moves by the key competitors. This can be done by identification of the role market and continued enhancement of the brand image. It is also worth noting that strategic management is not a static issue and requires review as often as possible. References Cuneo, A. Z. (1999). Tiffany & Co., a strong brand with relatively few retail stores, this fall starts selling jewelry online. New York. New York Press. Hessen, W. (1999). “A new Tiffany diamond.” Women’s Wear Daily. Oxford: Oxford Press. Rosen, S. M., Tunick, B. J. & Samuels, R. (2004). American gem. New York: New York Press. Zimmerman, A. (2002). E-commerce Selling strategies. Oxford. Oxford Press. Read More