Tiffany & Co.’S Business Situation

Q1. What are the strategically relevant factors of the macro-environment that affect the attractiveness of the U.S. jewelry industry? Specifically, are general and industry economic conditions and socio-cultural factors favorable to Tiffany & Co.’s business situation?

The 10% value growth in jewelry in 2011 was driven by the combination of higher prices and pent-up demand during the economic downturn. The rapid rise in gold and silver prices forced companies to raise the prices of real jewelry. After this demand was released, consumers did not have the same desire to purchase jewelry.

Macro-environment can be the cause of the attraction to jewelry sales on the attractiveness of the US jewelry industry. The US jewelry industry is mainly concentrated in the Southeast and Mid-Atlantic regions, which account for 45% of total industry sales. The concentration is highly dependent on population as per capita income. The higher the population and per capita income, the more concentrated the retail merchants in that particular area. This shows that Tiffany & Co. produced more jewelry depend on demographics where the areas occupied by people with high income. In addition to that, social forces factor also affect the attractiveness of the US jewelry industry. The Tiffany & Co. target consumers are among wealthy Americans. The character of goods produced almost unique which it ideal with customer needs and desires is. Compare to other competitor such as Signet Group, Bulgari S.p.A, Blue Nile, and Costco where these company more focus on wide market to sell their jewelry. Example, Signet Group operates in the jewelry retail segment through Kay Jewelers locations, as well as Jared the Galleria of Jewelry. These two subsets of Signet have different target customer. Kay Jewelers based in mall locations and targets households that have a median annual income between $35 000 and $100 000 while Jared the Galleria of Jewelry more higher-end U.S retail segment and target...