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Tiffany & Co. Diamond Strategy Overhaul for African Market Expansion

Explore the transformation of Tiffany & Co.'s diamond industry strategy as they enter the African market, overcome challenges, and improve ethical practices. Learn about the brand's rich legacy, new initiatives, and recommendations for success.

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Tiffany & Co. Diamond Strategy Overhaul for African Market Expansion

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  1. Chapter 6: Product Article: WSJ- “Diamond Industry Makeover Sends Fifth Avenue to Africa” Problem Solving by Jamilah Bumpers

  2. Overview of Article • Entering into new market to solidify the supply of their product • Capitalize on industry shift , luxury goods boom • CEO feared surging diamond demand hinder stock in its expanding retail network. • 2002- invested in mine operators- began opening cutting and polishing plants in Canada, Belgium, South Africa, and Vietnam • Partnered with Botswana , worlds largest producer of gem quality diamonds in 1980’s • Opened a new factory in Gaborone, in exchanger fort training locals to polish diamonds, eventually gaining the right to buy rough diamonds • New Arena- In house unit, Laurel Diamonds, 14% of company’s workforce, cuts and polishes own diamonds • Supplies more than 50% of Tiffany’s diamonds this year

  3. History and Brand of Tiffany&CO • Founded in 1837, New York stationery and “fancy goods” emporium • Since the opening marked their territory in the luxury arena, opened every article being marked with a non-negotiable selling price • Seller of tangible goods: Retailer Specializing in selling fine jewelry, Brand extension: luxury items, ie. timepieces, silverware, china, stationery • Publicly  Traded Company: TIF • Strong Brand Equity

  4. Sample needs Features and Benefits

  5. Features and Benefits • Status conscious-Reputation as a glamorous jeweler for the wealthy, powerful and famous for over 150 years • Expansive inventory of diamond, gem, silver, gold and platinum jewelry. • Gifts for every occasion starting at under $100. • Items ship in signature Tiffany Blue box with optional personalized message. • Featured collections by Frank Gehry, Paloma Picasso, Elsa Peretti and others. • Packaging : Items packaged in the company's trademarked Tiffany Blue Box.

  6. Problem • Global Market for diamond jewelry expected to fall 16% this year • Engagement Rings are Priced 10% lower than last year • Polishing plant in Botswana =weak link Polishing Streaks Angry Botswana workers • Staged 2-day sit-in, complaints to H.R. • Feelings of “clash of cultures” • “Prison-like” work environment • Bullied by production manager

  7. Solution/Recommendation • Uphold agreement with govt. • Take on a philanthropic role similar to Simmons Jewlry Line Diamond Empowerment Fund (DEF) is to raise money for the development and empowerment of the people and communities in Africa where diamonds are a natural resource. The Diamond Empowerment Fund is non-profit international organization established by individuals and businesses in the diamond industry and others who are committed to empowerment of Africa. • Boost employee moral in Botswana plant

  8. Solution/Recommendations Current merchandise mix include key chains, selling less than the typical Tiffany price tag. Capitalize on its lack of mining expertise in Botswana, and their large status-conscious customer base • Create a new product line • Take a Philanthropic stance on the good will of opening a factory in Botswana, employing local workers • Specifically for the diamonds that are not of 100% perfect • Give back a portion of proceeds from this new product line to rebuild town, employ more locals • Branding or Co-Branding,Create Botswana/Tiffany&CO branded boxes

  9. Chapter 8: Place Article: WSJ- “Diamond Industry Makeover Sends Fifth Avenue to Africa” Problem Solving by Jamilah Bumpers

  10. Distribution • New Arena- In house unit, Laurel Diamonds, 14% of company’s workforce, cuts and polishes own diamonds • Entering into new market to solidify the supply of their product • Supplies more than 50% of Tiffany’s diamonds this year • 180 Tiffany & Co. stores and boutiques worldwide, www.tiffany.com, business-to-business accounts and catalogs.

  11. Major Links in the Value Chain During the planning process, marketers analyze how value is added at each connection in the value chain.

  12. Channel Levels Illustrated

  13. Influences on Channel Strategy 8-17

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