Tiffany & Co.
Company Description Tiffany & Co. is a luxury and specialty item retailer. They opened their first store in New York City in 1837. Since then, Tiffany & Co. has been defining style and love stories.
Our mission is, “To be the world’s most respected and successful designer, manufacturer and retailer of the finest jewelry.”
Tiffany & Co. is committed to obtaining precious metals and gemstones, and crafting our jewelry in ways that are socially and environmentally responsible.
Tiffany & Co. Tiffany & Co. has more than 290 stores worldwide and counts with more than 12,000 employees around the world who offer a myriad of one of a kind designs and collections that range from accessories, jewelry and rings. -Engagement Rings: $12,500-$68,900 -Women’s and Men’s Wedding Bands: $750-$16,000 -Jewelry (Necklaces, Pendants, Bracelets, Rings, Earrings, Charms & Brooches): $150-$150,000 -Women’s and Men’s Watches: $2,500-$22,000 -Accessories (Cuff Links, Sunglasses, Leather Collection, Fragrance, Key Rings, Writing Instruments, Silver Accessories : $75-$15,000
Tiffany’s target market is broken down into two categories: 1. The Gift Givers & Gift Receivers 2. Affluent Self Buyers The Gift Givers make up 70% of Tiffany & Co.’s target market whereas the Self Buyers only consist of 30%.
Target Customer-Gift Giver Charlene Age: 32 years old Occupation: Partner at Law firm in Chicago Income: Annual Salary of $150,000 Buying Behaviors: Does not shop on a whim and takes pride in buying products of high quality and heritage Hobbies: Enjoys attending social events including gallery openings, art auctions & loves frequent visits to local museums
Target Customer-Self Buyer Nathaniel Age: 34 years old Occupation: VP at Investment Banking Company in New York Income: Annual Salary of $450,000 Buying Behaviors: Purchases for pleasure and does not mind splurging on extravagent items Hobbies: Enjoys running at Central Park, attending the opera, local charity events and musems. Loves cooking for his significant other.
New Product Line Service for 4 Dinnerware Set - Inspired by the fiercely feminine designs of Tiffany & Co., this exclusive dinnerware set features a lace design trim. Includes (4) 8.25” diameter dinner plates, (4) 7” diameter dessert plates, (4) 4” diameter bowls, and (4) 12 ounce mugs. 100% porcelain. Made in France.
Retail Sell Price: $350
Teacup & Saucer Set - Inspired by the famous Tiffany & Co. little blue box, this exclusive tea cup and saucer set is rich in detail and includes a lotus design. Includes (1) 10 ounce teacup and (1) 6” diameter saucer. 100% porcelain. Made in France.
Retail Sell Price: $80
Bowl Set - Inspired by vintage lace, this exclusive bowl set features a delicate lace motif. Includes (5) 4” diameter bowls. 100% porcelain. Made in France. Retail Sell Price: $150
Country Analysis Location: Tiffany and Co. is looking for low freight costs and short lead times between ports primarily in European countries who specialize in porcelain.
Sustainability: Tiffany and Co.
treasures and values the environment and we want to responsibly and ethically research and understand the environmental practices within each country.
Fair Labor Laws: All
employees must be treated fairly and equally. Meeting basic living standards and mimum wages is a must.
Technology: Each country
must be willing and open to change to modern technology and adaptable to innovation.
Trade Agreements: A free trade agreement with the United States is required in order to conduct business.
Cost: Providing minimum wage
while mainting low production costs and meeting a healthy profit margin .
Country Selection France
2nd largest exporter in Europe
Germany
Recorded the largest trade surplus in relation to the U.S.
Thailand
Exporting value of $191.3 billion
Country Selection Situated in Western Europe, France is the second-largest country on the continent, with an area of 211,209 square miles. Comparatively, the area occupied by France is slightly less than twice the size of the state of Colorado. France is bounded on the north by the North Sea and Belgium, on the northeast by Luxembourg and Germany, on the east by Switzerland and Italy, on the south by the Mediterranean Sea, on the southwest by Andorra and Spain, on the west by the Bay of Biscay and the Atlantic Ocean, and on the northwest by the English Channel. France takes great pride in finding sustainable solutions for manufacturing. Companies such as France Sustainable Solutions provide companies with LEED consultations and green-building processes. In France, the legal length of the working week is 35 hours in all types of companies. The working day may not exceed 10 hours. Furthermore, employees may not work for more than 4.5 hours without a break. Children under the age of 18 are only allowed to work a maximum of 8 hours a day. And for females, maternity leave is 16 weeks per child including 6 weeks before and 10 weeks after the birth. As far as technology goes, France has been a pioneer in a number of technological advances. They were the third country to have satellites alongside the US and Russia and over all have a growing technological research and development program. France and the US belong to a number of the same international organizations, including the United Nations, North Atlantic Treaty Organization, Euro-Atlantic Partnership Council, Organization for Security and Corporation in Europe, G-20, Organization for Economic Cooperation and Development, International Monetary Fund, World Bank, and World Trade Organization. France’s minimum wage rate is 1,457.52 euros per month and France’s overall cost of living is typically around 35% lower than the cost of living in the US. Germany is located in Western Europe, bordering the North Sea between France and Poland. Germany is slightly smaller than the state of Montana, with a total area of 137,847 square miles. Germany shares boundaries with Denmark and the Baltic Sea in the north, Poland and the Czech Republic in the east, Austria in the southeast, Switzerland in the south, France in the southwest, Luxembourg, Belgium, and the Netherlands in the west, and the North Sea in the northwest. Over the last 40 years, the government in Germany has retooled policies to promote growth that is more environmentally sustainable making Germany Europe’s green leader. In 2002, Germany adopted its National Strategy for Sustainable Development making sustainability a guiding principle for national policies. Germany has also launched major initiatives on biodiversity, climate change, energy, and resource efficiency. German law sets 48 hours as the normal work week with 8 hours per day. Female employees are entitled to maternity leave all throughout the pregnancy and up to 4 months after the birth of the child. Germany is not only the largest economy in Europe and the third largest in the world, but it is also one of the world’s most active and diversified markets for science and technology research and development. Over half of Germany’s industrial production is accounted for by R&D intensive industries. From physics and chemistry to cars and consumer products, Germany is a world leader in innovation. The EU continues to be the number-one trading partner for the US. Similarly, the US is Germany’s first export market outside Europe and also the market where German companies invest the most. The Transatlantic Trade and Investment Partnership between the EU and the US is a joint effort by the EU and the US to generate considerable growth and employment. Germany’s minimum wage is 1,473.00 EUR per month.
Thailand’s location in the heart of Southeast Asia makes it a natural gateway to the emerging economies. It is a country at the centre of the Indochinese peninsula in Mainland Southeast Asia. It is bordered to the north by Myanmar and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the west by the Andaman Sea and the southern extremity of Myanmar. Its maritime boundaries include Vietnam in the Gulf of Thailand to the southeast, and Indonesia and India on the Andaman Sea to the southwest. It s government is a constitutional monarch & bicameral parliament. King Bhumibol Adulyadej is the head of state and consequently the longest reigning monarch in the world since he has been on the throne since 1946. Thailand is a member of the World Trade Organization. The EU works closely with Thailand under the framework of the EU-ASEAN Cooperation Agreement to ensure an effective environment for trade and investment relation. Their minimum wage is $8.371 US dollars per day, which is higher than minimum wage in China, India and Vietnam. The three biggest labour unions in Thailand are Labour Congress of Thailand (LCT), National Congress of Thai Labour (NCTL), Thai Trade Union Congress (TTUC). Thailand has a large number of natural resources, an open and welcome economy, cost-effective workforce, solid infrastructure, a diverse manufacturing sector and pro-active government policies.
Supplier Analysis After thorough research we selected the three top suppliers for Tiffany & Co.’s Dinnerware Collection: Royal Limoges
54 rue Victor Duruy, 87000 Limoges, France Royal Limoges is the oldest running factory in Limoges, France. Its history includes some of the most renown names of porcelain companies, which include: Alluaud, Clèment, Gérard, Dufraisseix, Abbot and Lanternier. Royal Limoges makes its own paste and has been doing so since 1797. They are led by a will to export, creativity and high quality. They are constantly looking to achieve the highest quality and productivity possible. Leading them offer one of the most complete and prestigious lines of porcelain. Renown names such as Hotels Crillon, George V and Ritz constantly confide in Royal Limoges and their high quality manufacturing for everything porcelain.
Seltmann Weiden
Christian-Seltmann-Straße 59-67, 92637 Weiden, Deutschland Founded in 1910 “Porzellanfabriken Christian Seltmann” has evolved by taking over the “royal privileged Porzellanfabrik Tettau ‘with the 1990 incorporated four specialized Porzellanmanufakturen and an art department to an enterprise group, which is led until today as a family business. Approximately 1,000 employees manufacture porcelain works. With the takeover of the porcelain factory Königlich Tettau Seltmann has set more than 250 years of experience in manufacturing porcelain. Here, the porcelain of the group meets the highest international standards of design, functionality, durability and exclusivity. The Seltmann group is one of the few porcelain producers and all production sites in Germany. To communicate the quality and job-securing corporate orientation as well as their sustainable ways, Seltmann has developed their own “Made in Germany” seal.
Royal Porcelain Public Company
9th Fl., Mahatun Plaza Building, 888/90-92 Ploenchit Rd., Pathumwan, Bangkok 10330 Royal Porcelain Public Company Limited is one of Asia’s leading manufacturers of high-quality ceramic tableware, and exports to more than 60 countries worldwide. Its two production facilities, located in the Kangkoi district of Saraburi province, can produce of 30 million units annually and use the most advanced technologies, machinery and expertise from countries including Germany, England and Japan. Founded in 1983, Royal Porcelain became a public company in October 2000. It has 2,000 staff and employees, and 6 retail showrooms in Bangkok and Phuket. Its head office is in the Mahatun Plaza building on Ploenchit Road. Efficient management, vigorous quality controls and detailed attention to every stage of production ensure our products maintain the highest international quality standards.
Strategy Publication & Conclusion
Countries: France, Germany and Thailand are the countries that provide us with the most developed porcelain manufacturing industries. These countries, especially France and Germany have developed a high quality porcelain industry, which meet with the high standards of Tiffany & Co. In addition, their proximity and short lead-time are key to our strategy, which make these countries more desirable. Suppliers: After selecting the top countries to manufacture our product assortment, we selected suppliers within these countries. Royal Limoges, Seltmann Weiden and Royal Porcelain were all respectively selected because of their high quality manufacturing, responsible practices, high capacity of production and how they meet with our standards. Cost: Our country and supplier selection was not fully based on cost. Since at Tiffany & Co. we concentrate in providing our customer with the highest quality of product and we believe that quality cannot be measured in numbers.
Line Plan
Unit Breakdown
Country Ranking Ranking Criteria:
Business Climate: Based on country’s relation with the USA and comfort of conducting business with the country.
Costs: Based on cost of manufacturing the product in the country.
Government: Based on government policies and current political strategies.
Location: Based on geographical proximity to the USA.
Risks: Based on number of risks that could affect the manufacturing of products.
Social Stability: Based on current social policies in the country.
Sourcing Guidelines: Based on regulatory guidelines and sourcing strategies.
Dinnerware Industry: Based on whether manufacturers are looking to grow in several aspects.
Trade Agreements: Based on current trade agreements with the USA.
Trained Work Force: Based on quality and training of their work force.
Socio-Eco-Political: Based on Socio-Eco-political practices in the country.
France
92
:
Germany 92 :
Thailand 67 :
Supplier Ranking Ranking Criteria: o Abilities: Based on types of products the supplier manufactures. o Capacity: Based of number of employees, type of machinery and amount produced on a monthly basis. o Lead-Time: Based on amount of time taken between the production and the delivery of product. o Quality: Based on level of quality of products manufactured. o Customers: Based on number of customers and who they are. o Sourcing Guidelines: Based on whether these are published or not. (customer sourcing considered) o Services Offered: Based on quantity of total services offered. o Strategic Outlook: Based on whether manufacturers are looking to grow in several aspects.
Company Sourcing Guidelines Tiffany & Co. is committed to protecting the natural world that inspires our jewelry and designs. We aspire to leave behind a world that is as beautiful and abundant as the one we inherited. Tiffany & Co. believes that traceability is key to ensuring that mines are operated in environmentally and socially responsible ways. We have establlished our own rigorous standards for responsible mining that guide our decisions about which mines we directly source from. All Tiffany & Co. suppliers are expected, at a minimum, to conduct business in an ethical manner and to comply with applicable laws and regulations. We monitor our suppliers’ performance on a wide variety of factors ranging from safety and employment practices to environmental performance through our Vendor Code of Conduct, vendor self-assessments and on-site audits. The Vendor Code of Conduct communicates our values and expectations for our business partners. The Social Accountability Program helps to further ensure that vendors providing Tiffany with finished goods, components, leather, polished diamonds and packaging materials are held to the exacting standards that Tiffany & Co. is proud to uphold. California Transparency in Supply Chains Act (SB657) Tiffany & Co. has a supply chain auditing program. This program addresses the risks of human trafficking and slavery for suppliers in the Social Accountability Program. Our audits are conducted both internally and by a third party. Third-party verification is required of all of our high-risk suppliers in the Social Accountability Program, determined by a review of the vendor’s self-assessment, industry and geographic location. We are committed to helping improve the supplier conditions through training and infactory consultations. Tiffany & Co. believes that educating is the first step toward better factory conditions and sustainablity. Tiffany strives to cultivate a positive workplace for all of our employees.We honor the dignity of all people and respect the laws, customs and values of the communities in which we operate.We recognize each employee’s knowledge and skills as an important source of organizational capability and competitive advantage.We welcome diversity in all its forms and emphasize personal accountability and professionalism in a respectful, inclusive and fair work environment.We expect and ensure our employees follow our strict Code of Conduct
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Jenn Campbell, Clarissa Koppel & Kathryn Larrabee Fasm 420-Global Sourcing: Professor Donald Levy