The Tiffany Company Challeneges Analysis

The case study on Tiffany offers very important information on different strategies of the organization. Through the organizational strategies, other entities can learn since Tiffany is a leading company in its sector. In achieving its objectives, the company maintains an ethical business and it strives for sustainable development. The company uses a divisional structure in managing the businesses of the organization that has also been successful so far. It has led to increase in profits of the company; thereby, such a profit hike optimized their operations and competitiveness of the company. The increased competitiveness of the company has led to the growth of market share of the company. However, the company faces different challenges such as decline in its market share in Asia (Strickland & Morgan). This paper will extensively analyze the Tiffany case study and identify the important information, problems the business encounters and the solutions to these issues.


The organization from its inception has been specializing in the sale of distinctive and luxurious jewelry. For this case, the company targets at the upper class consumers. The company has been doing well from its opening until the global recession. Due to the financial crisis, consumers seek to secure their money. Additionally, more Internet retailers cause much competition to the business, for example, the Blue Nile. However, the company utilizes the organizational strategies to enhance its further development. To improve the profits of the company, the organization uses four important strategies that are very crucial. Firstly, the company complies with high standards of social and environmental responsibility. Secondly, they use pricing strategy that greatly contributes to the company profits. Additionally, there are other strategies that influence their growth including concentration on customer service, diversification, and differentiation. These strategies have been of great benefit to the company and entrepreneurs and businesses can gain a lot from this case (Wilcox, Damassa, & Hyder).

While mining for their raw materials, the company complies with the standards of social and environmental responsibility. It is always the company responsibility to maintain the healthy environment as it is or improve and at the same time consider the setting around them. Tiffany Company has been on the forefront in exercising environmental responsibility. It ensures its processes or operations do not hurt the community around them. They do this by ensuring their operations are ethical and friendly to the nature. Due to this, they have gained respect in the community and earned customer loyalty which has been crucial in achieving the company success. Increase in customer loyalty offers the company an increase in sales and results in superior financial performance. Additionally, the company exercises diversification of their operations. Since the company targets the affluent customers, they have made a step in taking their operations to other parts of the world away from New York City where labor is too expensive. In expanding the business to other regions of the world, they target more consumers increasing sales of the organization. Diversification of the business operations also greatly contributes in diversification of the company risks. It also increases the competitiveness of the company since it expands its market share. This has greatly helped the company in achieving its goals and objectives of being the best in the business of jewels (Strickland & Morgan).

Moreover, differentiation has also contributed to the growth of the company. Much of the company profits come from the organization product line. As part of their strategy, they expand their product line adding new items to the inventory in a way that does not diminish their brand name. Differentiation of the products makes them more attractive to the consumers increasing the number of sales of their products. Although they expand on their product line, they do this selectively ensuring they do not interfere with the preference of the consumers and buying patterns. In expanding the product line, they also give their consumers an alternative. This allows the company to remain relevant in the market and stay competitive. Through the differentiation, the company also diversifies its risks and increases the profits of the company. In maintaining the competitive advantage, the company also acquires other companies and improves on their operations. For example, the acquisition of luxury handbag and footwear line has helped in expansion of their offerings. This increases the target audience of the consumers. There are various reasons why the company focuses on expansion of the product line. Most importantly, concentrating on jewelry is risky to the business operations. Firstly, in the recent past, there has been an increase in competition from other businesses such as Blue Nile retailers. Due to the competition for clients, the sale of the company may reduce influencing the profits of the business. Differentiation, therefore, keeps the organization relevant in the industry. From this information, other companies can gain a lot by practicing the same approaches (Strickland & Morgan).

Furthermore, pricing strategy plays an important role in improvement of the organization. The company prices its products according to its target market. In pricing the products, the company puts into consideration the preferences of the consumers. This kind of pricing achieves various goals. First, it helps to develop business in line with the strategy. Secondly and most importantly, it helps in satisfaction of the consumers: when the buyers are happy, the organization is in a better position of increasing sales and making more profits. In pricing the products, they clearly pronounce their focus or target market that helps in identifying their customers. Additionally, it helps in increasing competition in the industry. In strengthening this strategy, the company concentrates on customer service.

According to the firm, customer service is vital to the development of the organization. For this reason, they adequately train their employees before assigning them different duties in the organization. The training equips the employees with the best skills necessary for doing their job and handling the customers. This ensures high customer service and satisfaction. In maintaining their customers and culture of the organization; they give a little blue box to every client who visits the organization. The box is an indication of the high quality products that the organization offers. This gives the organization the chance to interact with their customers on a more satisfactory method. Through the blue box, the consumers can easily identify the exceptional quality of services. It is, therefore, their greatest tool in satisfying and maintaining customer loyalty (Strickland & Morgan).

According to a report published by Loring, Tiffany & Co. has a divisional structure upon which it bases its operations. On top of the management is the board of directors and the team of senior management. Below the management teams, the organization management is broken down depending on the products and services. Such organizational chart helps in specialization of the different organizational products and services. Additionally, solving problems between the different departments becomes easy. It is thereby important for other organizations to follow this kind of procedure in order for the business to be successful (Strickland & Morgan).

Despite the great steps, that the company has made through the years it has been operational, the company encounters different problems. The greatest problem that the company faces is reduction of its business in the Asian Market (Strickland & Morgan). As documented by Haapalainen & Skog, the region has experienced a sharp decline in profits attributed to operational challenges. This calls for immediate solution that the company can put in place to help in bringing the situation to normal.

The first step in solving of the problem is the identification of the causes of reduction of sales in the region. With the root cause analysis of the problem it will be possible to come up with a solution for the company. Phillips outlines the various techniques the Tiffany & Co can employ to curb operational challenges. Most importantly, the company can re-launch their products in the Asian market. In re-launching the product line, they will invest in extensive marketing of the products. This will create customer awareness with the products that is very important for future success of the company. The process will also help the customers in understanding the benefits of the products. Additionally, it will create customer confidence with the organization boosting sales; thereby, the profits will increase. Increased advertisement will also play a great role in reviving the market share of the company in Asia. In addition, the company may also continue expanding their operations in emerging markets. The existence of the business in a new market will target new customers and improve on the sales of the company.


To sum up, it is evident that Tiffany & Co. is a great company that other organizations can learn emulate. Firstly, the experience of the company shows that it is important for an organization to diversify and differentiate its operations. Additionally, customer service is vital for development of any business. Adequate training of the employees, on the other hand, ensures production of quality goods and services. However, concentration on one model can lead to a failure of the business in some cases. For this reason, the company can solve the problem of decline in market share in Asia through re-launching of its product line and increase of promotion.

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