Jewelry Industry Case Study

771 Words 4 Pages
Technology Developments (Threat)

The largest change for the jewelry industry in general is the increase in cell phone usage that made watches obsolete due to many people relying on their phones to check time (IBIS World 14). However the demand for analog watches has slowly started to increase again as fashion pieces (IBIS World 14).

Political/Regulatory Trends (Threat)

While there aren’t many political or regulatory trends, there are two smaller potential threats. One is the increase in labor wages within the US and the other is the increase in counterfeits that may damage brand value through the offering of less expensive counterfeits. Labor costs may change with potential increases in minimum wages across the US. Generally these
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to maintain high brand loyalty and thus encourages consumers to purchase despite the elevated price points. This strength in particular allows Tiffany & Co. to take advantage of the demographic shifts in Hispanic population, Baby Boomers and East Asia. Through their international brand, Tiffany & Co. can become the premier destination for jewelry purchases. An example of this is the increase in Asia Pacific and Japan revenue that has grown by 16.6% from FY2013 to FY2015 (Marketline 18). This is due to their strategy of expanding selective global presence specifically in Asia discussed in the Management’s Discussion & Analysis part of the annual report (Tiffany & Co. 38). This has meant that the majority of store expansions for Tiffany & Co. have taken place in the Asia Pacific region (Tiffany & Co. 16).

In addition to this their strong brand also allows them to capture the women that are still getting married despite the cultural trend towards marriage later in life or none at all. This is important as engagement and wedding related sales make up 29.3% of Tiffany & Co.’s revenue (Marketline 18). Through their strong brand they are most likely to capture more of the population that is not following this trend. This is reflected especially in their target segments towards young women in East Asia, which is detailed further in the market segments part of this
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is their overall decline in profitability. This is reflected in their financial statements in the decline in operating profit and net profit despite a 6.2% increase in revenues (Marketline 22). This is deeply discussed in the annual report and the strategy Tiffany & Co. has put forth has been to improve asset productivity and better manage cash flows (Tiffany & Co. 39). Part of this strategy is to realize better operating margins through stronger controls of selling, general and administrative costs. This is weakness is most likely impacted by the external economic trend of rising world gold prices, which has impacted profit margins negatively (IBIS World 5). However as mentioned earlier, this weakness is mitigated by the decline in popularity for gold jewelry as

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