Blue Nile

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Blue Nile Inc. in 2010: Will Its Strategy to Remain Number One in Online Diamond Retailing Work?

1. How strong are the competitive forces confronting Blue Nile and other online retail jewelers? Which one of the five competitive forces is the strongest? Do five-forces analysis to support your answer. The competitive forces are intense as there are several online and offline jewelry retailers and there has been a decline in sales due to the economic recession. Many online and physical stores offer high quality jewelry at competitive prices so customers have substitutes and jeweler companies have fierce competition. Blue Nile has managed to gain a competitive advantage with the supplier relationships as the company can get more products at a lower price. Buyers have many choices in which to buy their jewelry in terms of quality and price. The threat of new entrants may be lower as jewelry sales have been in decline; however, there is a lot of money to be made so new entrants could arise. I would say rivalry among sellers is strongest as there are many online sites and stores offering good quality jewelry at competitive prices. 2. What key factors will determine a company’s success in the online jewelry business in the next 3-5 years? Key factors such as excellent marketing, offering of reasonable prices, vast product differentiation, offering of great product quality, and reaching out to gain new customers are all crucial to jewelry business. 3. What is Blue Nile’s strategy? Which of the five generic competitive strategies discussed in Chapter 5 most closely fit the competitive approach that Blue Nile is taking? What type of competitive advantage is Blue Nile trying to achieve? Blue Nile’s strategy was offering high-quality jewelry at competitively attractive prices and providing thorough information and trusted guidance all through the purchasing process. Blue Nile seems to be achieving the best cost provider as they offer jewelry at a lower cost with...
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