Tiffany Co. BU107

1. Tiffany & Co.BU107 Kirsten Hardigg ‘97

2. How Tiffany has positioned themselves for success over the last decade? Product to Market Process The Current Retail Environment: Challenges Strengths

3. What make’s a Retail Brand a “Luxury Retail Brand”? Strong Brand Identity Desired attainability and exclusivity High Quality Know-How Innovation Tradition Customized Services Exceptional Customer Service Staying Power and longevity Price Elasticity Desired attainability for exclusivity Status Symbol High chance for Grey Market and Counterfeit Strong controlled Brand Identity Controlled Distribution (Limited Wholesale or Licensing) Limited Discounting High Quality Strong control of Vendors In-house manufacturing Exceptional Customer Service Product Customization Associate customer relationship Staying Power and longevity Multi-generational Price Elasticity Minimal Discount Desired attainability for exclusivity Status Symbol High chance for Grey Market and Counterfeit Strong controlled Brand Identity Controlled Distribution (Limited Wholesale or Licensing) Limited Discounting High Quality Strong control of Vendors In-house manufacturing Exceptional Customer Service Product Customization Associate customer relationship Staying Power and longevity Multi-generational Price Elasticity Minimal Discount

4. Past Tiffany Strategic Initiatives 1998 – Implemented Supply Chain Operations 1997 – 2005 : Opened 4 new jewelry manufacturing facilities in New York and Rhode Island 2003 – Opened Diamond Cutting Facility 2003 – Opened Diamond sorting and polishing facility in Belgium 2004 – Secured $50M of quality diamonds per year from Aber 2004 Took ownership of all Diamond production from Tahera’s Jericho Diamond Project in Nuvant, Canada 2004/2005 - $10M investment in a South African diamond polishing facility to gain quality diamonds 2007 – Launch of Sunglasses thru partnership with Luxottica 2007 – Announce Partnership with Swatch to manufacture watches Need to understand where you have been to understand the next opportunititesNeed to understand where you have been to understand the next opportunitites

6. Strategic Diamond PartnershipsHedging the Diamond MarketExamples : LVMH – Tiffany & Co. – Harry Winston

7. Company controlled Supply Chain…Impact on Margin Control

8. Other Benefits… Ethics – Kimberley Process. The system, which commenced in 2002, certifies the origins of gems and exports them in tamper-resistant packs accompanied by a certificate validated by the government of origin. The certificate gets passed to the processing plants that polish the rough diamonds, then to the retailers that set the polished stones, and ultimately to the customers who purchase the finished rings, brooches, or necklaces. Quality: Access and process control secures a reliable supply of the largest, rarest and highest-quality polished diamonds

9. Bringing Luxury Product to Market

11. Competitors Product Mix& Discretionary Spending

12. Current Luxury Retail Environment

13. The Current Times: Challenges Uncertain economy : Wealthy consumers are more likely to continue buying high-priced goods--but in fewer quantities. Middle class consumers are likely to continue buying near-luxury items though are affected by lower-priced substitutions Upper Middle Class : Entry Price Point Customer decrease from $500 – 1000 to $1-500 Wall Street: Bonuses and future discretionary spending? Decreased Store Traffic Conversion Rate Commodity Prices : Price of gold, platinum, and diamonds have been volatile and currently at all time high (until the last 5 days) impacting the company's margins. Increases in costs cannot be immediately and efficiently be passed on to customers who expect certain price stability. Tough Competition : Bulgari’s aggressive growth, Semi-precious costume jewelry…

14. Strengths of Tiffany’s Strong Supply Chain and Operational Logistics Organizations : Minimal inventory overstock exposure Strong Vendor Relationships (TQM implementation): The negative economy also impacts external vendors. Robust product offerings at all price points Strong international sales results and opportunities International retail sales, which make up 41% of Tiffany's total, now account for half of profits. When all those other currencies are translated into dollars, there's a big boost for Tiffany! International Manufacturing in key growing markets E-commerce experts – first e-commerce website of a kind started in 1999.

15. What is next? Are there short-term opportunities to maintain market share? Improve conversation rates? How can Tiffany & Co. position themselves in the coming years to continue to grow in this ever growing competitive market place?

16. Jewelry Industry – How is it segmented? Diamonds: From Raw Materials to Retail International and Domestic Competitive Standing of Firms Market Segments in the Jewelry Industry Strategies of the top firms in the industry Major External Opportunities and Threats (technology, demographics, social changes, globalization etc.) to Industry Players Substitute Products – other luxury items Customer Profiles Financial Analysis & Prognosis – Industry, Major Players Importance of Advertising and Branding in the Industry