Operating Strategies Case Study

Case Title:

Blue Nile – A Guy's Best Friend!

Abstract:
The case is set in 2004 and talks about Blue Nile, the largest online retailer of diamonds in the US. Blue Nile followed a unique strategy in a very traditional industry. Traditional diamond retailing involved creating and maintaining an aura of mystery and secrecy around a diamond purchase. So, customers never really understood what they paid the premium for or what the true value of the diamond was. Traditional diamond retailing also targeted only women in all its advertising and promotions, though majority of the purchases were made by men. In such an industry scenario, the case talks about how Blue Nile built its online retailing business, its unique targeting and positioning strategy and the way it delivered the promised value to its target customers. The case describes how Blue Nile had taken advantage of the Internet and the gaps left by the brick-and-mortar retailers to build a new channel of distribution and emerge as a competitor to established retailers such as Tiffany and Zale.

Pedagogical Objectives:

• Rationale behind the targeting and positioning strategy of Blue Nile
• How does an organization design and implement its marketing and operations based on the target customer?
• Whether Blue Nile will continue to grow with the same strategy, given the competitive scenario?
• If traditional diamond retailers start their own online sales, would Blue Nile get affected?
• What stops other online diamond retailers to follow Blue Nile’s strategy successfully?.

Keywords :  Blue Nile; Online retailing; Diamond retailing; Targeting; Positioning strategy; Diamond buying Customer education; Diamond trade; Diamond wholesale; Operating Strategies Case Study; Tiffany; Amazon; Online advertising; Operational efficiency; Diamond rings; Customer service