This paper aims to present a TOWS analysis of a notable company in the United States, the Tiffany & Co.. Tiffany & Co.
is a prominent holding company which has a number of subsidiaries. Its primary subsidiary is the Tiffany and Company which engages in designing, retailing, manufacturing, and merchandising fine jewelry. It also distributes sterling silverware, crystals, time pieces, fragrances, and accessories.Technically, the main strength of the company is its strong brand name.
In existence since the early 1800s, the company has successfully grabbed and maintained a leading position as a prime US jewelry manufacturer that has received worldwide acceptance. As noted in Blackburn, Tiffany & Co. leads the pack of jewelers in the country. This lead stems from the fact that the company capitalizes on customer satisfaction.
(Blackburn, 2004)Following their mission to become the “world’s most respected retailer”, Tiffany & Co. ensures that they uphold and maintain excellent customer service through the discerning employee recruitment and extensive trainings (Lorge, 1998). As noted by the creative director of an advertising agency specializing in marketing jewelries, the company works with the aim of getting their customers “forget the product and remember where it came from” (quoted from Blackburn, 2004). Their most notable brand is the Blue Box, which as noted by James Mansour, a branding consultant, “represents refinement, luxury, elegance, good taste, quality, and it confers status on both the person who gives it and the person who receives it” (quoted from Blackburn, 2004).
The effects of this world renowned branding is further magnified by the fact that the company has engaged in notable international expansions and widening of market base. Its operations can be divided in three segments – Europe’s, Asia-Pacific’s, and America’s. The America segment includes stores in strategic locations in Canada, South America, and the United States. They also market products through business-to-business marketing; merchandise catalog distribution through mailing lists and third parties; and marketing and distribution via the internet, particularly through the websites www.
tiffany.com and www.tiffany.ca.
(Reuters)In the Asia-Pacific region, the company generates sales through Tiffany & Co. branches and retailers in Japan, China, Korea, Hong Kong, Taiwan, Australia, Singapore, Macau and Malaysia. They operate in Japan through the Tiffany & Co. Japan, Inc.
(Tiffany-Japan) and they also generate online sales through www.tiffany.co.jp in Japan and www.
tiffany.com/au for Australia. As for Europe, the company has retail sales in stores in the United Kingdom, Germany, Italy, France, Austria, Switzerland, Belgium, Spain and Ireland. The company also has an online site at www.
tiffany.com/uk . (Reuters)Tiffany’s market base also continues to expand as it tries to target middle class buyers as well. The company is offering a wide range of low-priced items bearing its luxury name so as to establish lifelong loyalty among a wide customer base, regardless of social class and buying capabilities.
(Lorge, 1998)The problem stemming up from this wide customer base however is the fact that it presents a vague target market. Technically, there is a conflict between the elite image and the idea of appealing to customers of all social classes. The wide customer base creates an “identity” problem for the company and they are faced with the question of whether they must do away with high end customers in exchange for high volume among middle class customers. (Lagorce, 2008)The problem is further magnified as the world faces recession, particularly in of the United States.
The worldwide crisis has resulted to lay-offs, closed companies, reduced compensations, and more. With the growing number of the unemployed and in debt, potential customers are cutting down their expenses for luxury items including jewelry. In investorguide.com, it was reported that Tiffany & Co.
felt the blow of the recession through an income slid of 76%. Unfortunately, their customers are not as recession-proof as they have predicted earlier (InvestorGuide). However, the company also has more opportunities as through increased international. It can expand its reach and target places in the United Kingdom where potential customers are not quite affected by the recession.
They can also devise new marketing strategies.Following the maxi-maxi strategy, Tiffany & Co can capitalize on the popularity of their brand name and their good reputation so as to make their marketing and advertising endeavors work well. They can sell the idea that the brand stands for luxury regardless of whoever wears it. Through an effective marketing campaign, they can widen their market base more.
They can include potential customers who are not directly affected by the global recession. They use effective marketing strategies to improve and expand their distribution channels online and branch based. They can also explore other retailing distribution channels and work in partnership with other companies with good brand awareness.In the mini-max strategy, the company can minimize their dependence on affluent customers and formalize their all-encompassing target market if they devise clear marketing strategies that will appeal to all market classes.
If they are effective at marketing and they would become a hit for a target market comprised of the middle class and low class consumers, they can then balance the loss of the profit from affluent customers. They can also greatly increase their profitability as they expand their low-end market base across continents. However, this poses a high risk, especially during these recession when the middle class cling on to their minimal earnings for their basic needs.Following a maxi-mini strategy, Tiffany & Co.
can increase their earnings if they gain a wide target market despite the global recession. They can offset the loss of profit due to recession and prevent the loss of affluent customers if they could just maintain loyalty through extensive customer satisfaction. This can be done through purchase incentives, high discounts, club memberships, and other forms of loyalty reward marketing campaigns. Such campaign is highly possible if the company can effectively use their wide distribution channels.
If the company aims to minimize both the weaknesses and threats however, Tiffany & Co. can opt to just focus on their affluent brand image. This way, they will have a clear target market and reduce the risk of losing their affluent customers.SUMMARY OF THE STRATEGIESStrengthsStrong brand nameWide market baseWide distribution channelWeaknessesDependence on affluent customersVague target marketOpportunitiesNew marketing strategiesInternational expansion(SO (maxi-maxi))Popular brand name and good reputation makes marketing easierThe wide market base and wide distribution channel magnifies the profitability of international branches and retailer subsidiaries(WO (mini-maxi))Devise marketing strategies that appeals to different classes of the target marketBalance loss of profit by appealing to other customer classesExpand market base across continentsThreatsWorldwide recessionLoss of affluent customers(ST (maxi-mini))Increased earnings through wide target market can offset loss of profit due to recession and the loss of affluent customersCapitalizing on distribution channels helps the company maintain its appeal to existing customers, and expand its market base(WT (mini-mini))Maintain the affluent brand image Works CitedBlackburn, Stephanie.
“Tiffany & Company: A Case Study”. SMU Discourse. 5 May 2004. 5 May 2009.
http://smu.edu/ecenter/discourse/Blackburn.htmInvestor Guide Staff. “Tiffany & Co.
Gets a Reality Check”. InvestorGuide Website. 5 May 2009 <http://www.investorguide.
com/stock-archives.cgi?date=032309>“Key Developments in Tiffany & Co.” Reuters. 1 May 2009.
5 May 2009 <http://www.reuters.com/finance/stocks/keyDevelopments?symbol=TIF.N> Lagorce, Aude.
“Tiffany & Co. not upscale enough? Blue-box retailer’s ‘mid-range’ positioning may deter any LVMH interest”. Market Watch. 29 Feb 2008.
5 May 2009 ;http://www.marketwatch.com/news/story/tiffany–co-may-too/story.aspx?guid=%7bDD4C5EBC-448C-4A8B-B240-636B9651C9EE%7d&print=true&dist=printMidSection>Lorge, S.
“The allure of Tiffany”. International Journal of Retail & Distribution Management, 27, 456. Ebsco Database. 1998Lorge, S.
“A priceless brand”. Sales & Marketing Management, 150, pp.102-110. Ebsco Database.
1998Slattery, Laura. “Tiffany Co hoping sales will sparkle at new outlet”. Irish Times. 14 Nov 2008.
5 May 2009. <http://www.irishtimes.com/newspaper/finance/2008/1114/1226408630464.
html> “Tiffany & Co.: Company Overview.” Reuters. 1 May 2009.
5 May 2009 <http://www.reuters.com/finance/stocks/companyProfile?symbol=TIF.N&rpc=66>“Tiffany & Co.
” Wright Reports. 2008. 5 May 2009 <http://wrightreports.ecnext.
com/coms2/reportdesc_COMPANY_886547108>Weihrich, Heinz. “The TOWS Matrix —A Tool for Situational Analysis”. University of San Francisco. 5 May 2009.
<http://www.usfca.edu/fac_staff/weihrichh/docs/tows.pdf>
