Savreen Gadhoke does an expose on how the erstwhile knight templars of core competencies and niche positioning are quietly sneaking through the strategy alley trying out previously untouched strategies!
February 2008: Tiffany & Co., the jewellery and specialty retail store operator, was going through a rough patch. Mirroring the past few months trends, even January ‘08 sales did not come up to expectations and Tiffany was facing the heat of fall in consumer spending. It seems honchos at Tiffany, touted as a premium luxury brand, had already had a premonition that the figures for the upcoming quarter won’t be anything to write home about, unless they thought of a strategy to improve their customer base and explore alternative retail formats. That’s when Tiffany, for the first time in history, moved away from its premium positioning and announced the opening of its first small-concept store in California that sold none of its $1,48,000 priced diamond necklaces; but instead focused on less expensive products like its $200 and lower priced silver jewellery. Their prediction was right; net income for the quarter ending March 2008 had slipped 45.5% (as compared to the previous quarter) and stood at $64.4 million dollars. Not surprisingly, the year saw Tiffany opening up more ‘lower-priced’ stores across the world. The global economic meltdown has been tough not only for specific retailers but also for sectors across the board. Tight liquidity, rise in input costs, and most importantly the fall in consumer spending, have forced multinationals like Tiffany to adopt strategies that they had earlier sacrilegiously abstained from!
If Tiffany was a move down the price slope, Coach (the leading American designer & maker of luxury lifestyle handbags & accessories) did the reverse. After experiencing regular significant declines in its sales figures, Coach decided to move away from its mid-segment positioning and decided to go the premium way by converting 40 of its 300 stores into a more upscale format that offered high-end luxury designer bags and premium concierge services. Again, a first-time strategy in times of a slowdown. Chucking its 20-year-old ‘invincible’ slogan of ‘Always low prices’, Walmart not only unveiled a new slogan of ‘Save money, live better’, it also jumped into heavy advertising (which has never been the case with Walmart) and, starting from the year 2007, pumped in a smashing $835 million into advertisements – its highest ever.
If at an international level, companies are not hesitating to explore new avenues and adopting tactics to enhance their revenue streams, then in India too – despite the slowdown hitting domestic markets much lesser – multinationals are going all out, either attempting innovative techniques or even dramatically shifting away from their core competencies, to attract untapped customers to improve their top and bottomlines. In fact, various companies have already altered their positioning in the market place.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2009
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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February 2008: Tiffany & Co., the jewellery and specialty retail store operator, was going through a rough patch. Mirroring the past few months trends, even January ‘08 sales did not come up to expectations and Tiffany was facing the heat of fall in consumer spending. It seems honchos at Tiffany, touted as a premium luxury brand, had already had a premonition that the figures for the upcoming quarter won’t be anything to write home about, unless they thought of a strategy to improve their customer base and explore alternative retail formats. That’s when Tiffany, for the first time in history, moved away from its premium positioning and announced the opening of its first small-concept store in California that sold none of its $1,48,000 priced diamond necklaces; but instead focused on less expensive products like its $200 and lower priced silver jewellery. Their prediction was right; net income for the quarter ending March 2008 had slipped 45.5% (as compared to the previous quarter) and stood at $64.4 million dollars. Not surprisingly, the year saw Tiffany opening up more ‘lower-priced’ stores across the world. The global economic meltdown has been tough not only for specific retailers but also for sectors across the board. Tight liquidity, rise in input costs, and most importantly the fall in consumer spending, have forced multinationals like Tiffany to adopt strategies that they had earlier sacrilegiously abstained from!
If Tiffany was a move down the price slope, Coach (the leading American designer & maker of luxury lifestyle handbags & accessories) did the reverse. After experiencing regular significant declines in its sales figures, Coach decided to move away from its mid-segment positioning and decided to go the premium way by converting 40 of its 300 stores into a more upscale format that offered high-end luxury designer bags and premium concierge services. Again, a first-time strategy in times of a slowdown. Chucking its 20-year-old ‘invincible’ slogan of ‘Always low prices’, Walmart not only unveiled a new slogan of ‘Save money, live better’, it also jumped into heavy advertising (which has never been the case with Walmart) and, starting from the year 2007, pumped in a smashing $835 million into advertisements – its highest ever.
If at an international level, companies are not hesitating to explore new avenues and adopting tactics to enhance their revenue streams, then in India too – despite the slowdown hitting domestic markets much lesser – multinationals are going all out, either attempting innovative techniques or even dramatically shifting away from their core competencies, to attract untapped customers to improve their top and bottomlines. In fact, various companies have already altered their positioning in the market place.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2009
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
The Most Revolutionary Concept In Education PLANMAN CHE CENTRE FOR HIGHER EDUCATION, Supported by IIPM India’s Leading B-School
Detail of all IIPM branches
IIPM Admission Detail
IIPM INTERNATIONAL - NEW DELHI, GURGAON & NOIDA
IIPM - Admission Procedure
IIPM, GURGAON
IIPM : EXECUTIVE EDUCATION
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