Supply Chain Process in the Luxury Jewellery Industry
Discuss about the Supply Chain Management Of Tiffany and Co.
According to Beamon (1999), the supply chain process is in which raw materials are gathered from the suppliers, converts into a product with the help of the manufacturer and then the product is sold to the end user via distributers and the retailers. The process of supply chain management starts with the raw material sourcing which is in fact the most important phase due to which the performance of company gets influenced (Tiffany, 2018). In case of there is any risk in the supply of the material, it might result in the low quality of the product and also damages the image of the company and at last, loss in profit or finances of the company. Tiffany owns its own mines but it also sources the gemstones and other significant raw metals from other different mines and suppliers who operate in more social way. These suppliers should maintain global mining standards so that Tiffany and co. could maintain their image and quality in the eyes of the consumer. Then the stones which before are rough are turned into carat, weight and are brought to shape and colour. After the sorting, they are sent to the diamond manufacturer. Now the manufacture process which goes in jewellery making consist of various processes: designing, moulding, polishing and fishing. The jewellery which is polished and packed is stored in the warehouse and then are sent to the replenishment team for coordinating with third party so that these products can reach to their distributers and retailers. Then the products are ready to be sold. The packaging involves blue bags and boxes which are shipped from the suppliers who also are responsible and have a different way of working in global market. By seeing the example of Tiffany and Co. one can say that SCM is quite complex as it takes a lot of processes to complete one supply chain and also the future for this management is going to be complex as customers are becoming impatient and very specific with their needs.
The consumer behaviour is a kind of study of the customers as to how they want to buy products, their selection of the organization, dispose ideas and services for satisfying their own needs and desires. In daily lives, the information of the product exchanges in form of the recommendations which comes from those who uses the product. This is known as Word of mouth. Consumer behaviour also changes with the change in the media and internet in most of the counties (Kumar & Kumar, 2016). Consumers search for information online and also read the reviews. It becomes very easy to search and also contrast and differentiate in between the products based on the information that is available (Torning, Jaffari, & Vatrapu). Consumer needs products online and they search for it online as they want the product in the cheaper rates and all the sites creates a difference in the prices for selling the product on the best price possible for the customers. Hence, fast accessibility and quick spread of the data and information roams around from one customer to another (Czarniewski, 2014).
Consumer Behaviour in the Luxury Jewellery Industry
Like all the other luxury brands in fine jewellery, Tiffany also faces issues and challenges in the past few years. U.S dollar is appreciated everywhere and this put the pressures on the costs and manipulates spending patterns. Most of the people in the whole world always try to go for the luxury purchases when they travel and in the recent few years, it also has effected as to how people are moving around the globe (Clemons, 2008). As an example: since last 15 years, the consumers from China have become the reason for the major growth engine for all kinds of luxury brands in China as well as across the world when they travel. This actually was a big change and it happened due to the decisions that Beijing took for the increasing in import taxes. Today’s world is likely to be most uncertain and that makes public or consumers think about their decision again and again about their relationship with the luxury (Deepak & Harpreet, 2017).
There are demographic changes too which affects the world to be more creative and innovative. For Example: The rates of marriages are going down in the areas like Unites states and Europe western parts. The jewellery which is made for the bridal purchases constituted with 29% of the whole world revenue in the year 2015 and that was the only trend which was going on since many years (Tiffany, 2018). Now the rituals for engagement have evolved in other parts of the world too. Majorly if talked about China, it has grown too much there. Hence, it can be continued to judge that the market is still going on well and wedding rings are still selling as the apt speed in the whole wide world. There are other reasons too because of why sales have gone up. Same sex marriages are common in West parts of the world. Couples give rings to other halves and do the commitments.
When tiffany faced, problems related to the reviews which were mixed when it came to the customers to give reviews about their Jewellery, they started creating new designs and made their process a little achievable for their customers. The global market has changes in many ways and new strategies are to be brought in case of keeping the product on the top.
Tiffany’s were also convinced that the strategy of being vertically integrated will continue to make sense. Tiffany believe that the most important part is the design and manufacture of the own products is not just an image they are creating but also craftsmanship and quality they are creating for their customers. This is a very good practice if the global market is concerned and luxury market is concerned. The CEO of Tiffany believed that the luxury house which are successful are the ones which remain integrated the most.
Technology is that thing which disrupts everything faster in different industries all over the world. For example: Transportation could be a good example of this disruption. In the recent few years, this industry has grown so much and so fast that it could not just give the chance to establish the players for coping up with the changes (Magazine, 1999).
Every organization should always do the technological analysis irrespective of what the industry works on and what it is all about as technology is one thing which disrupts the industry. If the speed is slow, it will give much more time and on the other hand, if the speed is fast with the technological disruption, the firm will have the chance to cope up with the profits and time both (Agarwal, Devgan, & Bhatnagar, 2017). The technological challenges which Tiffany’s went through are:
- There were technological challenges and new development done by the competitors of the Tiffany and co. New machineries as well as new designers of the jewellery came into the market as well as their competitors were growing day after day by creating good jewellery. Mostly when the customers check out the jewellery, they see new designs if any in the market irrespective of the brands they are looking for. Design is one most important thing which is seen and loved by all types of customers as variety is very much open these days in the world of social media where everything should be different. Tiffany also had to come up with new designs to cope up with the market changes(BAKANAUSKIEN? & BRASAIT?, 2015).
- There were also impacts of technology on the products the fine jewellery markets were offering. For example: New types of diamond jewellery were being offered in the market, the fine jewellery was light weighted and people were really liking it. Gold was also getting the coloured treatment. Even the watches and the fragrances which were sold by Tiffany’s were fairly old in terms of the watches which were being offered the customers in tem market(Mi9retail, 2017).
- Cost structures were being impacted in the jewellery industry because of the media and internet. Fine jewellery was made available in the market on the best prices possible. Customers, especially women irrespective of the websites or the place from where they prefer to buy the jewellery, they were looking for best designs on the best rates possible.
- The value chain structure in the service sector was being impacted.
- The rate of technological diffusion was also one of the reason because of which the technological challenges were to be faces by Tiffany’s.
Technological issues have always impacted every type of industry as it keeps on changing and it tales really good cost and finances to deal and to bring that technology in any industry. Tiffany’s went through a lot because of the changing market but in the end they were able to cope up with these changes and kept their pace on in the market (Corti, 2018).
Various markets have many different kinds of norms and policies or environment standards those impacts on the profit of any type of organization. Many countries as well as states have environmental laws and liability laws. As an example: United States – Texas and Florida both have very different liabilities clause and the case if any mishap or any type if natural or environmental disaster happens. In the same way, European countries always give healthy breaks in taxes to all the companies which operate in the sector which is known to be renewable. Well before any company enters into the new market for the starting of the business in any of the existing market, the organization should evaluate the standard provided by that particular area, region, state or country. There are some of the environmental factors which affected Tiffany’s too.
- The climates are changing a lot these days. This is happening since quite a few years now. Now a day’s people never know if there is going to be enough winters or summers in United States or majorly in any parts of World(Srinivasulu & Subbarao, 2013).
- Weather should be kept in mind as the jewellery needs moulding at the hot places and it cannot be done majorly in the winter times especially in United states or Europe where the temperature goes very low in winters.
- In case if any type of pollution happens, there are laws regarding creating and polluting the environment too. Creating Pollution is one of the most affordable offenses that any type of industry especially automobile industry could do. Polluting the environment is not a criterion for any business.
- There is always Air pollution and water pollution regulations when it comes to the jewellery making market. Tiffany’s had to go through a lot because there were strict regulations when it came to Europe for this(Paille, Chen, & Boiral, 2013).
- Recycling issues are always there and they are bound with the laws too.
- Waste management is to be done carefully(Serrano, Mistry, Matzdorf, & Leclerc, 2017).
- Green or ecological products should be produced to the maximum possible.
- The wildlife or any kind of species should not be in danger while the production f the products.
- Renewable energy should be supported.
Social and cultural way of doing things always impacts the culture of the company and the environment of the company (Walsh, Weber, & Margolis, 2003). There are some beliefs and values which are shared and they play a great role in the market and growth at Tiffany’s. The marketers should understand the customers of given market as to how they design the marketing message for jewellery stores industry customers.
- Demographics and the level of skilled population.
- Structure of class, hierarchy and power structure of the society.
- Level of education as well as standard in the Tiffany and co. Industry.
- Culture like gender roles and conventions etc.
- Spirit to maintain like entrepreneurial spirit and the broader nature of the society.
- Interests of leisure.
Recommendations for Improving Consumer Behaviour and Dealing with Technological Challenges
When Tiffany’s were found, no one used such word like sustainability. Tiffany was always ahead of its time. Manhattan was the first place where it was located on the first place for the first time in America. There was always a different way of doing things at Tiffany’s sue to which it was too famous those days too and even is now. The focus of Tiffany on sustainability was being done for 25 years of their existence (Tiffany, 2018). They always used to think about the expansion and the growth in the global markets. When the new CEO of the company arrived, he led the industry in the working address to the environmental and human rights concerns. In the year 2006, Tiffany tool and established the initiative which is responsible for the mining assurance which aimed to be the world’s first independent certification system responsible for the operations at large scale mine sites (Cumenal, 2017).
The efforts of Tiffany’s with responsible sourcing were not limited to the gold and diamonds. Sustainability issues weren’t much faced by the Tiffany’s as they were working on it since the inception of the first store in Manhattan (Eruemegbe, 2015).
Tiffany’s is a leading brand and has been a leading brand from years now. The supply chain of Tiffany’s is very simple like other supply chain management goes but yet the choice of the stones should be done in a peculiar way so that they get fine jewellery out of it from the manufacturers. There were some challenges like technological, social and environmental as well as market change and consumer behaviour challenges they had to go through.
The recommendation for the consumer behaviour changes is that Tiffany should be able to understand the needs of the customers. New designs should be innovated with the help of the jewellery designers so that Tiffany could always create a new look in the market.
Recommendation for the Technological Challenges should be to use the technology and make the most of it. Tiffany’s should keep on doing marketing so that it remains in the eye if the customers as well as it can take help of the technology and be alive in other parts of the world as well such as India, Tanzania etc.
Environment and social challenges should also be kept in mind. However, Tiffany’s have always followed the laws in each country it worked in but it should just take care of the waste material and make sure it should not make any environmental hazard.
References
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