Title: NIRU Diamonds: Remaining Competitive in a Mature Industry
Subject Area: Corporate strategy of extension, positioning strategy in a new market
Industry: Custom diamond solutions
Challenge: The client, a supplier of custom diamond solutions for watches and jewelry, presented a challenge of how to best remain competitive in a mature diamond industry. The competition in the diamond and jewelry industry grew in intensity, with bigger players undercutting prices and outproducing others in supply. Ranjeet Barmecha, Chairman of the Board and Chief Executive Officer, stated the future revenue projections were not up to the industry’s standards. The company strategically planned to expand the company’s revenue stream through the Swiss luxury watch industry in Geneva, however, it needed a way to differentiate to remain competitive moving forward.
Elucidating Professional Core: The Team
The “NIRU Diamonds” consulting case was conducted by the following members:
We are utilizing our collective core competencies and experience to perpetuate NIRU into maintaining its competitive leadership in a mature diamond supply industry.
Embedding in the Context of Industry and Company
In order to place the company’s dilemma of how to remain competitive in a mature market, the team collected primary and secondary data from many hours of interviews with the CEO and Chairman of NIRU, and reliable online sources to best help them understand the industry. Throughout the course, the team developed psychological readiness, interpersonal skills and work ethic necessary for the success of the project. We became more empathetic and responsible not only for the individual’s assigned roles but also for the whole team and our stakeholders.
While learning the company’s nuances, the team paid tribute to NIRU’s capability to supply a diamond and watch from the start of the manufacturing process all the way to the hands of the customer. The team also acknowledged a key dynamic opportunity within the industry, one that NIRU creates its own personalized diamond watch with a custom engraving in the dial to display a significant life event or to tell a love story. The team learned that NIRU has deeply embedded relationships in the high-end luxury watch industry. In the team’s investigation of the Swiss high-end luxury watch market, the team collected data on the market’s current size and growth potential and competitive forces, as well as on the political, legal, and cultural setting across Switzerland. The team presented their findings in a case narrative, which the company intends to share with their board members and key leaders within the firm.
Professional Capital: Analyzing and Solving the Challenge
In the consulting stage of the project, the team applied a set of strategic management frameworks to conduct a comparative analysis of the options under consideration and reveal the strongest matches between NIRU’s manufacturing capacity, custom watch storytelling, and its powerful connections in the watch industry. The team’s recommendation indicates the best way to stay competitive is by driving a custom watch storytelling process in the Swiss watch market with the capability to fully manufacture the diamond cut from start to finish. The team’s finalized recommendations include an action plan and a set of indicators to be monitored during the strategy implementation.
The cultural diversity in the team and our specializations in different business concentrations could bring forth an innovative solution to the challenge. Our goal is to find a way to leverage NIRU’s supply chain to bring costs down while sustaining a competitive advantage over other diamond suppliers in the luxury watch industry. While maintaining current operations with a focus on growth with the luxury brands, we recommend NIRU to create a client-facing custom watch company. NIRU would differentiate this new entity by using its unique laser cutting capabilities to engrave love stories into the dial of the watch. The extension from diamonds to diamond watches would allow NIRU to generate higher profit margins with B2C margins through downstream vertical integration. To avoid becoming a competitor to the watch companies NIRU already works with, NIRU should invest in developing this company as a separate entity rather than an internal SBU.