Moissanite Jewellery Industry Essay

1061 Words 5 Pages
A study of moissanite jewellery industry and its global market
Moissanite is used as an alternative to diamond jewellery. It is regarded at par with diamond when compared on the basis of quality and physical properties. Moreover, moissanite glitter more than diamond due to a higher refractive index and is as hard as diamond. A layman may barely distinguish between the two and mostly a distinction can be drawn through a laboratory test. However, the moissanite jewellery is cheaper in comparison to diamond and this makes it a better substitute for the stone. Chemically, moissanite is silicon carbide (SiC), this is naturally unavailable on earth and found its way through meteors, which entered earth’s atmosphere. Hence, it is a rare mineral. Conversely,
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Thereafter, an exit of this customer from moissanite business in 2007 led to a fall in revenue in the period. The company was enjoying the power of monopoly and sold its products at the price of its choice. Televisory assume that the firm invariably used the pricing power to its advantage from the gross profit margin curve. The gross profit margin for the company constantly remained above 50% after 1999. The steep drop in revenue of Charles and Colvard in 2008 reflects a fall in the global retail sector on account of the economic recession. The revenue reached its lowest in 2009 and again picked up subsequent to 2010. However, even during recession, the company maintained its leverage on pricing power and its gross profit margin remained around 60%. The revenue once again rose, 2011 onwards, barring a small dip in 2014. The patents of the Charles and Colvard expired in 2015 in the US and in the rest of the countries in 2016 except Mexico, where this will expire in 2018. The firm knew that other players would enter the markets …show more content…
Moissanite International based out of Australia was the one and the other was Wholesale Moissanite in the US. But, Charles and Colvard had an advantage due to years of learning and experience curve. It is assumed that new players will require a few years to match the quality and efficiency of operations achieved by Charles and Colvard. Interestingly, these new players are headed by former Charles and Colvard employees, who served the firm for many years during the tenure when it held patents. These employees possess a lot of intellectual expertise of Charles and Colvard in the form of manufacturing process accuracy and efficiency, supply chain and marketing relationships and other trade secrets. In addition, Wholesale Moissanite is also based in North Carolina, the US, as Charles and Colvard. It is run by Guy Stimpson, who is a former employee of Charles and Colvard since its inception until the expiry of the patents. Charles and Colvard was heavily dependent on a single supplier, Cree, for its strategic raw material for moissanite, silicon carbide. It is now quite likely for Cree to forward integrate to produce moissanite. The entry of new players will lead to more awareness of moissanite as an alternative to diamond. It will also further reduce prices of moissanite jewellery and increase the quality of available moissanite jewellery. Lastly, it is hard to predict the future of Charles and

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