diamond industry Essay -- essays research papers

The esteem of baseball diamonds lies on their physical properties that gravel them suitable for many applications. Natural diamonds atomic number 18 only of high value if they are scarce in nature. Realizing this, De Beers Consolidated Mines was formed to control the supply of diamonds from mines across the world. The diamond market is influenced by mine production, rough diamond distribution, preparation/cutting, and retail markets. The project will be concentrating on the retail markets for diamonds and different high end jewelry.Jewelry purchases are highly discretional because they are heavily affected by adverse trends in the familiar economy and are measured by disposable consumer income. The first half(prenominal) of fiscal 2003 can be described with a lackluster economy, dismantle consumer confidence and an unstable geopolitical environment. However, general economic conditions and consumer confidence modify in the second half of fiscal 2003, resulting with increa sed sales. Since the economy has interpreted some major strides towards recovery, the jewelry industry represents a bullish market. declamatory and s prom retailers are evaluating expansion opportunities outside of the traditional regional mall venue. With this in mind, it is the intention of this paper to assess the comprehensive strategies of the cyclical retail jewelry industry.In this highly competitive industry which is extremely subtile to the level of discretionary consumer income and the subsequent impact of the type of good purchased, competitors accept foreign and domestic guild and premier lavishness jewelers, specialty stores, discipline and regional jewelry chains, and department stores. To a lesser extent thither exist catalog showrooms, discounters, direct mail suppliers, televised home obtain networks, and jewelry retailers who make sales through internet sites. It is a highly garbled US market estimated at approximately 54 billion dollars. The disengagement of the industry is accordingly mass merchants representing 10%, chain jewelers with 100+ stores as 14%, chain department stores representing 12%, TV home shopping with 4%, independent jewelers taking the largest share at 36% and other (general, misc.) accounting for 24%. (Please refer to exhibit E)The specialty retailers with the highest sales are Zale Corp ($2.2Bn), Signet US($1.7Bn), Tiffany ($.8Bn) other players include Friedmans ($.4Bn) Whitehall ($.3Bn), and Samuels ($.1... ...d consignment terms know become the norm for wholesalers to extend to their retail partners. A good analogy of the inventory costs are transferred to wholesalers through these consignment purchases. Since jewelry is non a perishable good such as the garments and shoe industries, it tranquilize works as an asset even if the retailer returns the merchandise digest to the wholesaler.The amount of power that a retailer has is directly correlated to the size of it of their operation. Only a few companie s command extensive volumes. To fill the content present in most factories owned by wholesalers they require these volumes to go forward profitable. Due to these factors, the major chain stores are able to supplement split up financing, costs, and payment terms than the rest of the industry. The largest percentage of jewelers can be categorize as independent jewelers accounting for 36% of the overall market. Their ability to leverage power comes from their financial credibility in the market. Jewelry, being a luxury good and furthermore having high costs leads to great losses in the cases of defaults. Thus, the financial strength of these companies dictates the amount of power they have in the industry.