Blue Nile Case Analysis
Introduction
The brilliance of diamonds and its rarity make the gem highly desirable. Although diamonds serve no significant usefulness to an ordinary person, in a lot of cultures, diamonds are not only fashion accessories but it also symbolizes a person’s standing in society and financial noteworthy. Diamonds are not manufactured, they are gift of nature and mining diamonds in the depths of the Earth’s mantle requires a complex and expensive process. The famous slogan, “Diamonds are forever” solidifies the degree of commitment required in the union of marriage. To be given a diamond for an engagement ring is the ultimate symbol of love.
According to the World Diamond Council, approximately US$13 billion worth of diamonds are produced each year. An estimated ten million people worldwide are employed in the diamond industry. The United States Geological Society reported that in 2010, the United States was one of the world’s leading markets.
Blue Nile was considered the largest online jeweler. Sanjay and Amy Bhargave were on the market for an engagement ring. After their disappointing experience of shopping for a ring in New York City and in the local jewelers in their hometown, one of Sanjay’s clients suggested for the couple to visit Blue Nile’s website. After the great length Sanjay subjected himself to the diamond purchase process and with the help of Blue Nile’s diamond consultant, he finally decided to place an order for a 2.2 carat princess cut in Platinum Trellis platinum setting for $20,000.
As stated in the case, Blue Nile experienced significant growth between 2005 and 2007, annual revenues grew close to 40%. The company also considered to be one with the healthiest net profit margin in the industry at 4.2%. Blue Nile’s outstanding financial performance is a result of the company’s long-standing strategy of providing high quality diamonds to its customers, exceptional customer service centered on empowering customers to make informed decisions
The brilliance of diamonds and its rarity make the gem highly desirable. Although diamonds serve no significant usefulness to an ordinary person, in a lot of cultures, diamonds are not only fashion accessories but it also symbolizes a person’s standing in society and financial noteworthy. Diamonds are not manufactured, they are gift of nature and mining diamonds in the depths of the Earth’s mantle requires a complex and expensive process. The famous slogan, “Diamonds are forever” solidifies the degree of commitment required in the union of marriage. To be given a diamond for an engagement ring is the ultimate symbol of love.
According to the World Diamond Council, approximately US$13 billion worth of diamonds are produced each year. An estimated ten million people worldwide are employed in the diamond industry. The United States Geological Society reported that in 2010, the United States was one of the world’s leading markets.
Blue Nile was considered the largest online jeweler. Sanjay and Amy Bhargave were on the market for an engagement ring. After their disappointing experience of shopping for a ring in New York City and in the local jewelers in their hometown, one of Sanjay’s clients suggested for the couple to visit Blue Nile’s website. After the great length Sanjay subjected himself to the diamond purchase process and with the help of Blue Nile’s diamond consultant, he finally decided to place an order for a 2.2 carat princess cut in Platinum Trellis platinum setting for $20,000.
As stated in the case, Blue Nile experienced significant growth between 2005 and 2007, annual revenues grew close to 40%. The company also considered to be one with the healthiest net profit margin in the industry at 4.2%. Blue Nile’s outstanding financial performance is a result of the company’s long-standing strategy of providing high quality diamonds to its customers, exceptional customer service centered on empowering customers to make informed decisions
References: Arthur A. Thompson, M. A. (2010). Crafting and Executing Strategy. New York: McGraw-Hill . Council, W. D. (n.d.). Retrieved from http://www.worlddiamondcouncil.org. Olson, D. W. (2010). Diamond. US Geological Society Mineral Commodity Summaries, 50.