Blue Nile case study
Blue Nile Case Study
1. How strong are the competitive forces confronting Blue Nile and other online retail jewelers? Do a five-force analysis to support your answer.
The competition among the competing sellers in the industry is strong. Competitors for Blue Nile not only include the online jewelry sellers such as Diamonds.com, Whiteflash.com, Ice.com and JamesAllen.com, but also include brick-and-mortar jewelers, chain department stores, mass merchants, local jewelry shop, and large jewelry chains such as Zale and Tiffany.
The competitive force from new entrants is moderate to weak. The new entrants of the traditional jewelry industry will need a large amount of capital for inventory, established brands to attract customers, and a strong sales team. For new online jewelry sellers, they also need to find ways to build their brand awareness, establish partnership with suppliers, and to keep the operation costs low to ensure attractive prices.
The competition from substitute products for jewelry sellers is also moderate to weak. There are synthetic diamonds, manmade jewels and alternative jewels. But for engagement rings and wedding bands, people would still choose those real and precious diamonds and materials. Thus, from this aspect, there could not be substitutes for diamonds and expensive jewels.
The bargaining power from the buyers is strong since there are many choices for them to purchase jewelry from. It is easy for customers to change their source for purchase.
The bargaining power from the suppliers is strong for the prices for diamond and precious metals depend more on the exchange market in the world. There are limited suppliers creating an established oligopoly over the years.
2. What key factors will determine a company’s success in the online jewelry business in the next 3-5 years?
Key success factors in the online jewelry business include the following ones:
1) Lower operation costs to keep prices lower than rivals
2) Partnership with
1. How strong are the competitive forces confronting Blue Nile and other online retail jewelers? Do a five-force analysis to support your answer.
The competition among the competing sellers in the industry is strong. Competitors for Blue Nile not only include the online jewelry sellers such as Diamonds.com, Whiteflash.com, Ice.com and JamesAllen.com, but also include brick-and-mortar jewelers, chain department stores, mass merchants, local jewelry shop, and large jewelry chains such as Zale and Tiffany.
The competitive force from new entrants is moderate to weak. The new entrants of the traditional jewelry industry will need a large amount of capital for inventory, established brands to attract customers, and a strong sales team. For new online jewelry sellers, they also need to find ways to build their brand awareness, establish partnership with suppliers, and to keep the operation costs low to ensure attractive prices.
The competition from substitute products for jewelry sellers is also moderate to weak. There are synthetic diamonds, manmade jewels and alternative jewels. But for engagement rings and wedding bands, people would still choose those real and precious diamonds and materials. Thus, from this aspect, there could not be substitutes for diamonds and expensive jewels.
The bargaining power from the buyers is strong since there are many choices for them to purchase jewelry from. It is easy for customers to change their source for purchase.
The bargaining power from the suppliers is strong for the prices for diamond and precious metals depend more on the exchange market in the world. There are limited suppliers creating an established oligopoly over the years.
2. What key factors will determine a company’s success in the online jewelry business in the next 3-5 years?
Key success factors in the online jewelry business include the following ones:
1) Lower operation costs to keep prices lower than rivals
2) Partnership with