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Business and Finance

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

Summary of the Case

Blue Nile Inc. is the one well-known online traders of diamond rings. It started its business in Seattle, Washington in the year 1999. The one interesting aspect related to this particular company is that they are famous particularly for the engagement function rings. The unique perspective in case of Blue Nile, Inc. is that it has its operations completely based on online services without the consideration of in-person consultation services. The competitive environment is the one influential paradigm that is crucially involved in case of Blue Nile Jewelry, Ltd. (Thompson, 2008). The following company facing the challenge of competition that appears due to the existence of many different retail outlets of jewelry products. Competitive environment can assess in the form of the functioning of different jewelry store chains, online retailers, catalog retailers, discount superstores, etc. Barriers to entry is 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 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 observe in case of Blue Nile Jewelry Inc. is that company only operates online as there is no consideration of storefront locations.

Barriers to Entry and Competitive Advantages

There is a number of factors which play their role as the barriers for the Blue Nile to successfully enters the market and sustain its strong position. Consideration of the strong form of capital in case of supplier relationships play a vital role to determine the market position. On-site inventory and the 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 case of following company can be identify as its own team comprises on 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 source for the company. These countries mostly facing the 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 come up with many considerations. There is the existence of the many market features that influence the specific approach of the organization (Rivlin, 2007). Lack of the consideration of the online purchasing can identify as the disadvantage for the following company that negatively affect its operations internationally.

Recommendation for the Blue Nile about Strategic Dilemma

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


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