Tiffany, is every girl’s dream and each girl deserves a Tiffany. To be one of the most famous and beloved luxury goods, I believe it must have earned a lot from its sky-high price. However, I saw the news that Tiffany’s earnings dropped sharply in third quarter in 2004. I couldn’t understand what lead Tiffany to this kind of situation. Due to its globally successful advertisement, the demand for Tiffany in China can be said enormous. With the high price combined with large demand, it will make huge profit.
The truth is, the company’s stock fell 5.7% because of the less than expected sales in Japan and higher costs for materials and diamonds. Yes, its net sales did increase by 7% but the higher metal and diamond costs lowered the total profits.
According to the SWOT analysis we learned in class, the strengths of Tiffany are its positive brand image, well-known raputation over the world and its well-designed website. The weaknesses are its high price and it focuses solely on Tiffany & co. Its opportunities can be widening product focus and the increasing number of working women may lead to rising demand. However, it may also face threats since fewer weddings may lead to less demand for wedding rings. Due to the increasing metal price, its profit may even lower if Tiffany couldn’t find a way out.
