BLUE NILE AND DIAMOND RETAILING

GROUP 4
 GARLAPAD VAMSHI 1902072

 GOWRI SHANKARAN B V 1902081

 ISHWAR GUPTA 1902096
 JYOTI DIGARI 1902102
1. WHAT ARE • KEY SUCCESS FACTORS IS THE REPUTATION OF COMPANY,
QUALITY,VARIETY OF PRODUCTS AND CHOICES, AND
SOME KEY CUSTOMER SERVICE OFFERED
SUCCESS • BLUE NILE OFFERS A VARIETY OF GREAT HIGH-QUALITY
FACTORS IN DIAMONDS ONLINE AT REASONABLE PRICES. CUSTOMERS LIKE
DIAMOND THE LOW-PRESSURE SELLING THAT FOCUSES ON EDUCATION
AND PROVIDING GOOD VALUE TO ITS CUSTOMERS
RETAILING? HOW
• ZALES JEWELERS OFFER A CREDIT PLAN OF “A PENNY DOWN
DO BLUE NILE, AND A DOLLAR A WEEK” MARKETING STRATEGY. SELLING
ZALES, AND MOSTLY DIAMOND JEWELRY TO WORKING-CLASS SHOPPERS
TIFFANY • TIFFANY IS POPULAR DUE TO ITS DEMAND OF SILVER DESIGNS
COMPARE ON AND ITS NOW FAMOUS “TIFFANY SETTING” FOR SOLITAIRE
THOSE ENGAGEMENT RINGS. OFFERS HIGH END PRODUCTS

DIMENSIONS?
 Blue Nile’s market strategy is to offer a variety of diamonds choices through
online channel. Stones priced at $2500 are relatively set at lower demand and
to keep it in inventory is primarily higher. Their strategy is to save in inventory
holding cost due to lower buffer stocks and still be able to offer customers a
broad variety of products

2. WHAT DO YOU THINK OF THE

FACT THAT BLUE NILE CARRIES
ABOUT 30,000 STONES PRICED AT Tiffany’s strategy is to offer high quality diamonds at retail stores and offer
$2,500 OR HIGHER WHILE lower cost and high demand products through online channe.l Main reason is
ALMOST 60 PERCENT OF THE to utilise the limited facility space and reduce cost
PRODUCTS SOLD FROM THE
TIFFANY WEB SITE ARE PRICED
AROUND $200? WHICH OF THE
TWO PRODUCT CATEGORIES IS
BETTER SUITED TO THE ONLINE
CHANNEL
Blue Nile has an advantage and is well suited for online channel because their
primary focus is to offer a variety of diamonds online while reducing cost.
 The failure of Zales was mainly due to
focusing too much on outdoing their
competitors and not focusing enough
3. GIVEN THAT TIFFANY
On their brand image and on their
STORES HAVE THRIVED customer service
WITH THEIR FOCUS ON
SELLING HIGH-END
JEWELRY, WHAT DO YOU
THINK OF THE FAILURE OF They were offering high quality
ZALES WITH ITS UPSCALE diamonds at low end retail stores such
STRATEGY IN 2006?
as Walmart and JCPenny; customers
perception of their diamonds were not
as high-quality as Tiffany’s
4. WHAT DO YOU THINK OF TIFFANY’S DECISION TO OPEN SMALLER
RETAIL OUTLETS, FOCUSING ON HIGH-END PRODUCTS, TO REACH
SMALLER AFFLUENT AREAS IN THE UNITED STATES?

provide the opportunity for

these customers to experience
opportunity to reach out and
the Tiffany “service” and
“touch” customers
“brand” without having to go
the larger cities

However, opening these stores

will require Tiffany’s to up the Tiffany’s property expenses will
inventory level throughout the increase as stores are opened
supply chain
5. WHICH OF THE THREE COMPANIES DO YOU THINK WAS
BEST STRUCTURED TO DEAL WITH THE DOWNTURN IN 2009?

Blue Nile has the main

Main fixed cost where Offer variety of
advantage and was best
operating facilities and diamonds online at
structure to deal with
transportation cost. reasonable prices
the downturn in 2008

Zales and Tiffany had Zales offer high end

Tiffany offers high end
more expenses or cost . products at reasonable
products with higher
Retail,admin, facility and prices at retail stores in
cost
transportation cost online
 Blue Nile has an advantage when it comes to selling a large
variety of high and Diamonds at reasonable prices. They may
need to continue focusing on their selling tactics and could re-
structure their marketing strategy to reach out to new
customers.
6. WHAT ADVICE
WOULD YOU GIVE Zales may need to gain control of the inventory and Limit their
lower demand, higher cost products in their inventory while
TO EACH OF THE selling lower cost Diamond at retail stores.
THREE COMPANIES
REGARDING THEIR
Tiffany needs to be careful when trying to lower prices on their
STRATEGY AND diamonds or their reputable image may get ruined. Instead, they
STRUCTURE? need to continue focusing on their brand image by offering
outstanding products and great service