Blue Nile Case Questions
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 a five-forces analysis to support your answer.
The competitive forces that are confronting Bule Nile and other online retail jewelers are strong. The threat of new entrants is high because the brick-and-mortar stores have a low cost of entry into the online retail of their jewelry. The threat of substitutes is low because there are not substitutes readily available that are of the same quality or performance. The bargaining power of the suppliers is moderate because there is not a surge in the availability of supplies, products are differentiated, and the products are critical to the production process. The bargaining power of the buyers is moderate to high. The buyers in the industry are the customers because the online jewelers normally sell directly to the individual. The cost to switch to competing products are low, buyers have the ability to postpone purchases and even though the products can be differentiated almost all jewelers sell the same products. The last competitive force is rivalry among competitors. This force is moderate to high because the buyer demand is growing but buyers are still skeptically about purchasing jewelry before seeing it in person. Buyer costs to switch brands is low and there are numerous competitors because they not only have to compete with other online retailers but also with brick-and-mortar stores. The strongest competitive force in my opinion would be rivalry with bargaining power of buyers as a close second.
2. What key factors will determine a company’s success in the online jewelry business in the next 3-5 years?
The first key factor that will determine a company’s success in the online jewelry business is if their website has features that are consumer friendly and if there website is functional. The next key factor...
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