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Tiffany & Co. Presentation

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Miranda Jones

on 20 March 2016

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Transcript of Tiffany & Co. Presentation

Corporate Responsibility
Clarity
The purity of diamond
Six different categories
FL, IF, VVS1, VS1, S1, I1
The greater the clarity, the greater its value
Timeline
1837
Doors Open as
Tiffany & Young
1840's-1860's
Tiffany publishes first mail-order catalogue in US
1878
Acquired the Tiffany Diamond, weighing 287 carats
1902
Charles Lewis Tiffany passes away and Louis Comfort Tiffany becomes company's first design director
Timeline...
1967
Tiffany has produced the NFL Vince Lombardi Super Bowl trophy since the first Super Bowl in 1967.
May 5, 1987
Tiffany & Co.'s IPO
4.5 million shares at $23/share
Main consumer base: wealthy Americans
Team 3
Michaela Lacek
Miranda Jones
Chenyue Li
Alex Knoth
Joe Klusman

Table of Contents
1. Background

2. Timeline

3. Company Strategy

4. Financials

5. Competition

6. Consumer Demographics

7. Porter's Five Forces

8. Markets

9. Supply Chain

9. Corporate Responsibility

11. Reference List

Background
Founded in 1837
Charles Lewis Tiffany & John Young

Offers various products...

Supply Chain
Competition Analysis
Competitive Positioning Map
(Tiffany’s Annual Report, 2013)
Reference List
Annual report, (2013). Tiffany & Co. Legendary for 175 Years. [report] Washington: Tiffany and The Company
Blackburn, S., (2004). Tiffany and company a case study. [online] Available at: <http://smu.edu/ecenter/discourse/blackburn.htm> [Accesed 15 Nov 2013]
Bishop, K., (2013). Tiffany & Co. top ranking brand on Facebook. [online] Available at: <http://www.professionaljeweller.com/article-13476-tiffany-amp-co-top-ranking-brand-on-facebook/> [Accessed 13 Nov 2013]
Clear Channel, (2013). Cambaign Library October 2010. Tiffany & Co. [online] Available at: <http://www.clearchannel.co.uk/useful-stuff/media-library/campaigns/2010/campaign-library-october-2010/tiffany-co > [Accessed 10 Nov 2013].
Mind Tools, (n.d.). Keller’s Brand Equity Model. [online] Available at: <http://www.mindtools.com/pages/article/keller-brand-equity-model.htm> [Accessed 16 Nov 2013].
Interbrand, (2013). Best retail brands 2012. [online] Available at: <http://www.interbrand.com/Libraries/Branding_Studies/Best_Retail_Brands_2012.sflb.ashx> [Accessed 15 Nov 2013]
I2I Events Group, (2012). The UK Jewellery Market Opportunity. [report] Available at: <http://www.thejewelleryshowlondon.com/files/i2i_booklet_jewellery_6_lo_res.pdf> [Accessed 10 Nov 2013].
Reuters, (2013). Tiffany & CO (TIF). [online] Available at: <http://www.reuters.com/finance/stocks/companyProfile?symbol=TIF> [Accessed12 Nov 2013]
Taylor, R., (2013). Report: The future of luxury jewellery sales. [online] Available at: <http://www.professionaljeweller.com/article-12955-report-the-future-of-luxury-jewellery-sales/> [Accessed 12 Nov 2013]
The Assay Office, (2013). Jewellery Market Stats. [online] Available at: <http://www.theassayoffice.co.uk/market_trends.html> [Accessed 13 Nov 2013]
Tiffany & Co, (2013). Brand Positioning - Competitor Analysis. [online] Available at: <http://brandtiffanyandco.wordpress.com/brand-positioning/> [Accessed 27 Oct 2013].
Tiffany & Co, (2013). Tiffany & Co. Corporate Responsibility. [online] Available at: <http://www.tiffany.co.uk/CSR/> [Accessed 12 Nov 2013]
Tiffany & Co, (2013). History. [online] Available at: <http://brandtiffanyandco.wordpress.com/history/> [Accessed 27 Oct 2013]
Tiffany & Co, (2013). $150 and Under. [online] Available at: <http://www.tiffany.com/Shopping/CategoryBrowse.aspx?cid=563630#p+1-n+10000-c+563630-s+5-r+-t+-ni+1-x+-pu+-f+-lr+-hr+-ri+-mi+-pp+> [Accessed 15 Nov 2013]
Tulshyan, R., (2010). Men’s Jewellery: A Recession – Proof Luxury. [online] Available at: <http://content.time.com/time/business/article/0,8599,2006189,00.html> [Accessed 13 Nov 2013]
Mission Statement: "To be the world’s most respected and successful designer, manufacturer and retailer of the finest jewelry."
Company Strategy
Luxury brand and service
Strict hiring standards
“Tourist” items
Main business strategy: Expand product line
Without diminishing the brand
Accessories line
Expand target market
Blue Book Catalog, website, new retail markets
Gain public exposure
Sporting event awards

Competition
Company Financials
Sales
Direct Competitors
Indirect Competitors
Consumer Demographics
Clarity
The purity of diamond
Six different categories
FL, IF, VVS1, VS1, S1, I1
The greater the clarity, the greater its value
These brands market quality and precision
One-stop shop for quality products
Consumers sacrifice brand name for lower price
Carat Weight
Color
1 carat = 200 milligrams
a precise measurement
the greater the weight, the more expensive the diamond
Carat Weight
GIA color rating system ranked from D-Z
Measures the degree of colorlessness
Indeterminable using naked eye
The clearer the diamond, the greater the its value
Color
Cut
The shape of the diamond (round, princess, emerald, pearl)
Sprales of the diamond
Brightness
inertnal & external white light reflection
Fire
How the diamond scatters
Scintillation
the amount of sparkles & the pattern
Upper Class and Upper Middle Class
Both Men and Women
Young Adults Ages 18-35
Middle-Aged Adults Ages 36-55
Porter's Five Forces
Threat of New Entrants
High capital investment and start-up costs
Limited sources of suppliers and distribution channels
IPO in 1987 sold shares at $23.00 per share
Highest stock price recorded was $110.60 on 11/25/14
Current outstanding shares of 128.21 million with a market cap of $8.27 Billion
01/26/16 Tiffany announced a new $500 million stock buyback program throughout 2019
Follow Kimberly Process
Social and environmental responsibities
100% traceable diamonds
Direct sourcing relationship to mines
Supplied by DeBeers and 6 others
Diamond producing countries are gaining more control over diamond supply
Often sells diamonds to third parties
Domestic & International Markets
Domestic Market
High Quality
Low Quality
Low Price
High Price
Extremely well established
Real estate locations
Strong relationship with suppliers and designers
Oversaturation in the U.S. market
Strong U.S. dollar has hurt profit generated from foreign tourists
International Markets
Clarity
The purity of the diamond
Six different categories
FL, IF, VVS, VS, S, I
The greater the clarity, the greater the value
Clarity
Cut
Chief Executive Officer: Frederic Cumenal
In 2014 net income dropped 56.42% to 181.37 million due to a legal dispute with Swatch
Sales revenue year ending January 31, 2015 is $4.25 Billion
Net Income year ending January 31, 2015 is $484.18 million
290 stores worldwide
Worldwide net sales in 2014
Americas region- 48%
Asia-Pacific region- 24%
Japan- 13%
Europe- 12%
Other- 3%
Strategy mirrors strategy in domestic market
expand and increase awareness without reducing brand value
Dividends
After IPO Tiffany & Co. paid $.0083 per share in 1988
Most recent dividend declared on 2/18/16 at $.40 per share with a yield of 2.5%
There have been 6 consecutive years of dividend increases
Average of 8% increase in dividends each year
Sales Segments
48% of sales from Americas
24% of sales from Asia & Pacific
13% of sales from Japan
12% of sales from Europe
3% United Arab Emirates & Russia
Industry Leadership
Protecting the Environment
Charitable Giving
Competition in the Industry
Pressures of both direct and indirect competition
Power of Suppliers
Power of Consumers
Threat of Substitutes
Few quality suppliers
High bargaining power
Unlikely for competitors to drop out
Growing Economy
Purchases are made in small quantities
Other ways to show off the consumer's wealth
Little to no substitutes for wedding rings
Heartfelt gifts of no substantial monetary value
Word of mouth marketing
What if?
Stock Portfolio
h;jhth
Full transcript