Academic Master

Business and Finance

Blue Nile, Inc. Stuck in the Middle of the Diamond Engagement Ring Market

Summary of the Case

Blue Nile Inc. is one of the well-known online traders of diamond rings. It started its business in Seattle, Washington, in 1999. One important aspect related to this particular company is that they are particularly interested in the engagement function rings. The unique perspective in the case of Blue Nile, Inc. is that its operations are completely based on online services without considering in-person consultation services. The competitive environment is the one influential paradigm that is crucially involved in the case of Blue Nile Jewelry, Ltd. (Thompson, 2008). The following company faces the challenge of competition due to the existence of many different jewelry product retail outlets. The competitive environment can be assessed in the form of the functioning of different jewelry store chains, online retailers, catalog retailers, discount superstores, etc. Barriers to entry are another crucial prospect that influences the strategic structure and functioning of the company in the market. Effective association with the supplier and the overall reputation are the two major components that determine the feature of barriers to entry into the market. There is the consideration of different social trends that play a vital role in the provision of opportunities for the enhancement of business. The major strategic issue that can be observed in the case of Blue Nile Jewelry Inc. is that the company only operates online as there is no consideration of storefront locations.

Barriers to Entry and Competitive Advantages

There are a number of factors that play their role as barriers for Blue Nile to successfully enter the market and sustain its strong position. Consideration of the strong form of capital in the case of supplier relationships plays a vital role in determining the market position. On-site inventory and store labor are two important considerations that have the potential to influence the profitability level of the organization. The major feature of competitive advantage in the case of the following company can be identified as its own team comprised of the paradigm of customer service. The team provides the necessary consultation to the customers about the products offered by the company. The major obstacle for Blue Nile Jewelry Inc. is the unfavorable market conditions of the countries that are the major diamond sources for the company. These countries mostly face challenges in the form of legal and political stability that ultimately affect the business of the organization.

Blue Nile’s Environment

It is notable to mention that the paradigm of the environment of the following company is unique as it comes up with many considerations. The effective form of reputable online service makes it easy for the company to successfully deal with the threat of the entrants in the market. The focus of the company is to expand its business internationally, which comes with many considerations. There are many market features that influence the specific approach of the organization (Rivlin, 2007). Lack of consideration of online purchasing can be identified as a disadvantage for the following company that negatively affects its operations internationally.

Recommendation for the Blue Nile about Strategic Dilemma

The major strategic concern that appears in the case of Blue Nile is to maintain an effective form of innovation and involvement of the customers as the online trading company. It is crucial for the company to adopt an alternative form of strategic functions to make it more responsive to the customers. A necessary form of feedback from potential customers helps the organization to identify their specific demands and requirements related to the product services.


To conclude the discussion about the strategic features of the Blue Nile, it is crucial to indicate the features of decisions that are necessary for the organization to take in a different setting. There is evidence that different operational aspects, such as its quality services, shipping policy, and return policy, enhance the feature of customer satisfaction. It is important for the company to consider the potential threats related to the facet of the international market to be successful in competing in the market.


Rivlin, G. (2007). When buying a diamond, starts with a mouse. The New York Times.

Thompson, A. A. (2008). Blue Nile, Inc.: World’s largest online diamond retailer. AA Thompson Strickland. J. IIIGambleJ. E.(Eds.), Crafting and Executing Strategy: The Quest for Competitive Advantage. New York, NY: McGraw-Hill.



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