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Article summary:

1. Blue Nile, Inc. is facing challenges in the diamond engagement ring market as it is "stuck in the middle" between high-end luxury brands and low-cost online retailers.

2. The company's business model of selling diamonds online at lower prices than traditional brick-and-mortar stores has been successful, but it is struggling to differentiate itself from other online competitors.

3. Blue Nile needs to develop a clear competitive strategy and implement it effectively in order to overcome its current challenges and maintain its position in the market.

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