Advertising

Tiffany & Company is currently engaging in heavily advertising their products in order to create demand and stimulate sales because of the upcoming holiday season.  During this time of year, Tiffany & Co. incurs higher marketing and advertising cost than it does during any other time of the year.  In fact, their fiscal year end is not a typical December 31 year end.  Because their sales are so high during the holiday season and the early part of the year (January, February) it has different year end than your normal calendar year end.

Operations in China...

Tiffany & Co.'s operating segments are as follows:  the Americas region (52% of fiscal 2009 sales) includes sales transacted in Tiffany & Co. stores in the United States, Canada, Mexico, and Brazil, as well as sales of Tiffany & Co. products in certain of those markets through Internet, catalog, business-to-business and wholesale operations; the Asia-Pacific regions (35% of fiscal 2009 sales) consists of sales transacted in Tiffany & Co. locations in Austrailia, China, Hong Kong, Japan, Korea, Macau, Malaysia, Singapore and Taiwan, as well as sales of Tiffany & Co. products in certain of those markets through internet, business-to-business and wholesale operations; and Europe (12% of fiscal 2009 sales) consists of sales transacted in Tiffany & Co. stores in Austria, Belgium, France, Germany, Ireland, Italy, The Netherlands, Spain, Switzerland, and the United Kingdom, as well as sales of Tiffany & Co. products in certain of those market through Internet, business-to-business and wholesale operations.

Outsourcing and Vertical Integration

Tiffany & Co. is a very unique entity, offering luxurious jewelry and items.  Therefore, it must outsource certain things by specialists, such as appraisers on gold, silver, gemstones, diamonds, etc.  It must also obtain diamond extractors in order to get the inputs needed for it's products.  This is also the case with silver, gold, and other precious metals that Tiffany uses in it's jewelry.

Tiffany & Co. has expanded into some vertical integration by opening up it's own stores to sell it's items.  However, Tiffany & Co. could expand to more retail stores if they are upscale retailers.  Tiffany & Co.'s products are too high value and luxurious to sell at typical retail stores such as Dillards, J.C. Penney, Belk, etc.  The typical shopper in the common retail stores is not one who will purchase Tiffany & Co. jewelry.  Therefore, most of Tiffany & Co.'s sales are online, or in it's specialty boutiques.

A focused differentiation strategy...

A focused strategy keyed to differentiation aims at securing a competitive advantage with a product offering carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers (as distinguished from a broad differentiation strategy aimed at many buyer groups and market segments).  Successful use of a focused differentiation strategy depends on the existence of a buyer segment that is looking for special product attributes or seller capabilities and on a firm's ability to stand apart from rivals competing in the same target market niche.

Tiffany & Co. employs successful differentiation-based focused strategies targeted at upscale buyers wanting products (high value jewelry) with world-class attributes.

Because Tiffany & Co. is known for it's reputation and strong brand name, it can charge premium prices for it's high valued jewelry to only a specific group of customers.  Only upscale buyers can purchase Tiffany & Co. jewelry because it is so expensive and is a luxury item.

Strengths and Weaknesses, Opportunities and Threats

Tiffany & Co. has a major strength of it's brand name.  It is known all over the world and has a very reputable name.  It has a reputation of being known for luxurious jewelry.  This brand name is it's biggest internal strength and creates loyal customers.

Tiffany & Co.'s major external threat is the economy.  When the economy takes a downturn, Tiffany & Co. is hit harder because it is a luxury good.  Therefore, when people have to cut their spending or their budgets, this is one of the first things that people will go without simply because they do not need it.  It is not a necessity.