Nicholas Scannell
2/19/2014
Case # 8: Tiffany’s Little Blue Box: Does it Have Any Strategic Significance?
Question:
•How strong are the competitive forces confronting Tiffany & Co. and other retail
jewelers? Do a five-forces analysis to support your answer.
•What key factors will determine a company’s success in jewelry retailing in the
next 3-5 years?
•What is your appraisal of Tiffany & Co.’s financial performance based on the data
in case Exhibit 1? How do the company’s EBIT margins compare for the 2006 –
2011 period? Is there evidence that Tiffany’s strategy is working?
•Does Tiffany have adequate competitive strength to defend its position in the
industry?
•Do a weighted competitive strength assessment.
•What strategic issues and problems does Tiffany & Co. management need to
address?
1. How strong are the competitive forces confronting Tiffany & Co. and other
retail jewelers? Do a five-forces analysis to support your answer.
Threat of New Entrants (Low):
There is no single dealer owning in excess of 10% of the total market, so the more likely
retailers will enter & compete
Threat of Rivalry (High):
Growing power of the internet creates rivalry (a multitude of retailer jewelers) in the sense
that people can compare prices of competitors
Blue Nile
o Offers reasonable return policies (just in case)
Over 56,000 different businesses in the jewelry industry
The higher the population & per capita income, the more rivalry
Low barriers of entry= high amount of competition
· “Due to discretionary nature of jewelry purchases, the economy & disposable income of
