Company and Industry Overview:  

 

Founded in 1837, Tiffany & Co. designs, manufactures, and sells luxury jewelry, watches, glassware, and other goods. Tiffany and Co.’s competitors include Signet Jewlers Ltd, Wal-Mart Stores Inc., Macy’s Inc., and Costco Wholesale Corp.   

 

The jewelry store industry is impacted by multiple external concepts, but the most notable are the economic and social factors, which deal with per capital consumption power and changes of costs of metals, as well as changes in fads and demographics. Tiffany & Co. has internal strengths and weaknesses, and the industry faces many external threats and opportunities. The most valuable of these is the opportunity to expand through online and mobile shopping, which opens the door to multiple channels.  

 

Strategy:  

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Tiffany & Co’s 2017 Note to Shareholders emphasized multi-year strategic priorities which included amplifying their contemporary brand message, renewing product offerings and improving in-store presentations, providing customers with various buying platforms, strengthening their competitive position, improving their operating model, and inspiring a powerful organization to win.  By effectively managing their balance sheet, streamlining communication, observing sales of new product offerings, following historical company and market trends, and analyzing successes and shortcomings of their competitors, Tiffany & Co. is able to evaluate the results of their short-term and long-term strategies.  

 

Along with Tiffany & Co.’s multi-year strategic plan, Tiffany & Co. will continue to communicate key attributes through multiple media outlets. Tiffany & Co. will also increase investment spending, which will limit pre-tax earnings growth. They believe this will lead to sustainable sales growth, operating margins, and net earnings in the longer term. The company advocates for responsible sourcing and environmental sustainability, shows respect to and provides opportunities for their employees, and contributes to a variety of charitable projects.  

 

Financing: 

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Typical to all annual reports, Tiffany & Co.’s financial statements included revenues, operating expenses, operating profit, net profit, tax, capital expenditures, net cash, and cash dividends. Signs indicate continued growth over a 5-year period between 2013 and 2017. While this shows progress in the company’s financial efforts, their depreciation, interest, and profit after tax have been on a steady decline. The high inventory turnover ratio represents that demand for Tiffany & Co. products is high, and they are efficiently fulfilling inventory. The debt to asset ratios, which fluctuate between 23% and 25% from 2012 to 2018, determines that Tiffany & Co. is relatively risk averse. Between 2012 and 2018 the current ratios fluctuated between 4:1 and 6:1, which means the company was able to pay off its debt four to six times over. This combined with Tiffany & Co.’s high quick ratios means the company is highly likely to and capable of paying off debt and obligations.  

 

Conclusion: 

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By implementing a multi-year strategic plan, exercising advocacy for corporate social justice, and increasing investment spending, Tiffany & Co. should be able to maintain their competitive advantage. Economic, social, and technological factors will have a significant impact on the company. The increase of global marketing channels will allow Tiffany & Co. to grow and target diverse markets, but shifts in the global economy and emerging competitors will be an area of strategic concern. Consistently developing product offerings and focusing on rising taxes, exchange rates, and metal prices should help alleviate this concern. Catering to varying changes in fashion fads, and offering enhanced mobile and online shopping experiences will also help Tiffany & Co. remain one of the most well renowned jewelry stores worldwide.