Business Analysis

By analyzing the Sony and Amazon cases, we can find out that Joseph Schumpeter’s ＂creative destruction＂theory does have impact and on marketing planning. Whether enterprise attach great importance to the upgrade and innovation of its products to meet the customers’ demand will lead to distinct different results. Once companies take the theory into account they may win the competitive advantage and have the chance to become a market leader, otherwise even a global giant is likely to go decline due to the ignorance of the continuous innovation. This reminds the companies that do not neglect the power of creating new products that adapt to market demand, even if you are already a dominant company for now.

According to the PESTEL Analysis, the strategically relevant factors are: political factors, economic conditions, socio-cultural forces, technological factors, environmental force, and legal/regulatory factors.

Economic conditions and socio-cultural factors have not been favorable to Tiffany & Co.   Economic hardships and the recession have led to revenue declines between 2006 and 2010.   Retail jewelers in the U.S. were affected by these poor economic conditions and stores dropped from 62,000 in 2007 to 56,000 in 2011.   

In 2006, the price of gold increased from $600 per ounce to $1,600 in 2011.   This resulted in the industry average profit margin to decrease to 5.1 from 2006 – 2011. 

In term of socio-cultural factors, the aging population, and the reduced number of weddings has affected the industry average profit margin.   Consequently, the number of weddings in the U.S. has dropped from 2.3 million per year to 2 million between 2001 and 2010 and dropped again in 2009 and 2010.  

 Luxury jeweler Tiffany & Co said profit would decline in for the full year and reported lower-than-expected sales for the second quarter as a strong dollar discouraged tourist spending in the United States and reduced the value of overseas sales.

PEST analysis...