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Blue Nile Case Study Essay

The blue nile case study is a well-known and detailed example of how to run an e-commerce business. It has been studied over the years, and it has helped many businesses learn from its success. In this essay we will be discussing blue Nile’s marketing strategies, including online promotion, offline promotions such as TV ads, and their use of social media channels.

Essay 1

What are the most important factors that will influence a company’s success in the online jewelry business over the next three to five years? To be successful in the online jewelry business, a firm must be trustworthy and responsive, have high-quality product offerings, and provide outstanding service for its clients and products.

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What’s the most important element of an effective e-commerce site? The website should be simple to navigate, pleasant for consumers, and have features that only that firm offers. Blue Nile’s success is due in large part to its ability to interact with its customers. Blue Nile understands and attempts to fulfill its clients’ varied demands by offering a variety of alternatives.

Given that four of the five generic tactics appear to be a good fit for Blue Nile, it might be an excellent match. Because they don’t usually provide the lowest price, but rather deliver the greatest quality at the best rate, Blue Nile would make a fantastic value provider. Blue Nile is proud of its high diamond and jewelry quality, and it endeavors to keep current consumers by offering a pleasant shopping environment and experience while also delivering the finest value for the best goods. Blue Nile’s Buying Power distinguishes it from its rivals.

What do the findings of a Blue Nile SWOT analysis add to our understanding of its position? Strengths – Low Inventory, competitive pricing, brand name/reputation, Weaknesses – no face-to-face customer contact, purchasing on the basis of a picture, unable to put on a product, shipping risk Opportunities – International growth, expanding product line Threats – Online competitors and physical retailers. The potential for dealing with an economic recession like we’ve seen in recent times is among Blue Nile’s threats.

Essay 2

Blue Nile Case Study Cristeen McPherson Student Number 326914 BUSA 506 Dr Terry Power November 11, 2012 1) With the exception of a significant rivalry between vendors, Blue Nile and other internet jewelry retailers confront moderate or feeble competitive forces.

The low entry barriers and the industry leaders’ brand recognition make it difficult for new entrants to break into the jewellery market. Due to the high inventory costs, lack of product differentiation, and well-known brands held by the biggest players, there is little potential for new participants. Replacement goods for a high-quality diamond are not readily accessible.

Synthetic gemstones, cubic zirconium, and other jewelry alternatives are available, but the typical consumer does not equate these with genuine diamonds. Supplier bargaining power is a hodgepodge of strong and weak factors that has a moderate influence on the industry. The diamond supply sector is more concentrated than the retailers, but new entrants are emerging.

Diamonds are now found in nearly every type of gemstone available, including lab-grown diamonds. The Canadian diamond producers Ekati in 1998, Diavik in 2003, Jericho in 2006, and Snap Lake-4 in 2007 have all increased Canada’s position as the world’s third greatest diamond producer. Two elements that contribute to a stronger supplier power are that items are essential to shopkeepers’ success, and there is a lack of suitable substitutes.

In contrast, diamond commodity trading or purchase processes imply a diminished supplier power because vendors have simple access and low costs to change suppliers. Rio Tinto and Harry Winston Diamond Corporation created the Diavik mine as a joint venture, while The De Beers Group owns the Snap Lake-4 mine. Buyer bargaining power is relatively strong owing to:

The switching costs are low. There is little difference in the product from one retailer to another. The number of consumers shopping online is continuously growing. Because of internet accessibility, buyers’ ability to be well-informed about goods is improving. Buyers are eager to save money.

The most important force is the rivalry between competing retail vendors. Factors that impact competing rivalry include: – The jewellery market is mature, with a wide range of purchasers. – During the recession, buyer demand had dropped off significantly – many merchants were left with slow-moving inventory.

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The buyer has little cost to change brands; it’s simply a mouse click for the buyer. Products are poorly diversified. Diamonds and jewelry are comparable products offered by the merchants. High fixed or storage costs – Many brick-and-mortar (b&m) businesses as well as many internet retailers have high inventory expenses, which if not turned into profits, result in cash flow problems and earnings losses.

The high inventory costs make it tough to liquidate quickly. There are many competitors, some of which provide low-value, high-volume shops like Walmart and others who present a premium offering such as Tiffany & Co.

(2) The following are the most important success factors that will influence online jewelry retailers in the near future: Consumers searching for fine jewelry want a vendor who provides high-quality goods at a reasonable price. Retailers must rely on their brand recognition and customer service to promote awareness of their product ranges as well as their business.

Retailers must demonstrate that they are reputable, dependable, and trustworthy. Online businesses must show this through effective online marketing, appealing to their emotions, and demonstrating consumer confidence with prior purchases. Jewellery stores must be able to deliver outstanding customer service and support.

A diamond engagement ring is a major purchase for many customers. Customer service that understands the importance of the transaction and assists the customer through it will be critical to success and client loyalty.

With inventory costs being so high, retailers must balance expenses of inventory and operations in order to stay competitive. Maintaining inventory turnover and cash flow through the business is a key competence for success. A successful merchant is able to match purchases with consumer purchases at the same rate, which allows them to maintain stock turnover and cash flow throughout the organization.

High-level market knowledge, as well as the ability to remain up to date and keep track of developments in their industry, will give retailers a significant competitive advantage. If they do not perceive market changes, work to build product differentiation, or prepare to satisfy consumer requirements and desires, they will fall behind and lose consumer loyalty, sales, and market share.

Blue Nile is using a best-cost provider method in the online jewelry market, which is one of their competitive methods. Their objective is to create competitive advantage by offering a high-quality product at an accessible price. Blue Nile’s supplier agreements enable them to do this since the diamonds and other gems are not actually acquired by Blue Nile until after they have received consumer orders for that specific product.

Blue Nile’s inventory management and risk of non-selling goods is restricted by this measure. Blue Nile also relies on tight administration of operational costs, which are constantly examined to verify their efficacy and that low expenses are maintained. These two components work in tandem to allow Blue Nile to provide comparable high-quality jewelry at significantly lower rates than its competition. Blue Nile has a strong understanding of its consumer and market, as well as a deep expertise.

Blue Nile’s metrics help them to improve their customer experience, provide better service and educational content for customers, and effectively build trust with consumers. This information also allowed them to negotiate excellent supply agreements with a variety of vendors for the high-quality goods they offered online. Because of their unique supply deals, many of the diamonds and other jewelry are only accessible through Blue Nile. Blue Nile must stay competitive by being meticulous in maintaining and updating its market knowledge in order to survive.

The ability to forecast future market trends and adapt company strategy proactively is critical for long-term success. Many of the internet retailers, for example, are currently depending on their educational information to gain consumer trust and loyalty. This approach will lose effectiveness over time as the customer becomes more informed due to the fact that all merchants are striving to increase consumer knowledge.

Even if Blue Nile can compete on product quality, the low switching costs make it hard to compete against them. Blue Nile must be prepared to offer another compelling incentive for customers to stick with them. If new diamond suppliers reach comparable supply agreements with any of Blue Nile’s competitors, they may lose their supply chain edge and risk significant stock-holding expenditures.

Weighted Competitive Strength Assessment. The main competition comes from, who is based in the United Kingdom and sells diamonds that are both conflict-free and ethically sourced. Blue Nile is best known for its cost control and stock control/supply chain management. Blue Nile presently has a competitive advantage over its competitors that is sustainable.

Blue Nile’s competitors have a number of similar goods, and their websites and customer service policies are also mostly comparable. Blue Nile’s cost management is, however, far superior, giving the benefit of increased efficiency and lower costs as compared to its rivals. ) To create a more long-term competitive advantage, Blue Nile will need to enhance their marketing strategy in order to improve brand recognition, product distinction, and consumer loyalty.

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Given the challenges mentioned above, Nile may find it particularly difficult to maintain its market position in the highly competitive global luxury goods industry. To preserve its leading market share, which has been declining since 2011, Blue Nile must also deal with the erosion of market share caused by increasing competition and the potential loss of proprietary product suppliers’ exclusivity.

Recommendations. The strategy to expand the product line with additional designers, increase brand recognition, enhance customer loyalty, and develop product distinctiveness would be simple for Blue Nile to create and execute. The increased brand recognition, consumer loyalty, and product differentiation would improve their competitive position while also being sustainable in the near future.

Low costs of online growth are beneficial, but care must be taken to ensure that language and culture are respected. The company’s present global expansion has been successful, and future growth will need to be based on research into the jewellery traditions of target areas in order to utilize the website’s appeal to jewelry buyers’ emotions. Low prices for internet expansion are an advantage, but attention must be paid to cultural sensitivity.

Selective expansion will aid in the retention of competitive advantage and international market share growth in the medium term. Blue Nile is well-positioned to take advantage of the weaker competition in its market and gain market share in the mid-range future via acquisitions because of its deep understanding of the marketplace. The opportunity to acquire a competitor would need more time to be thoroughly evaluated, but acquiring a large percentage of market share and increased sales are still viable possibilities.

Blue Nile has a healthy cash flow, adequate cash reserves, and accessible credit facility to execute the acquisition. While a strategic collaboration with a diamond miner/producer would provide long-term guarantees of high-quality, unique goods at reasonable costs, such as Congo’s Similol Diamond Project (SDP), the timeframe for achieving this goal is lengthy. The cost of such an endeavor might also be prohibitive at this time. The potential for long-term sustainable competitive advantage is greatest when utilizing this approach; therefore Blue Nile should not overlook it as a future long-term objective.

Essay 3

The world’s largest jewelry store, The Blue Nile, was founded in 1999 and has since expanded to become the globe’s most popular jewelry chain. The company is part of the NASDAQ-listed NILE group. Customers have recognized The Blue Nile with the circle of excellence platinum award for being among the top online shops according to customer reviews.

The firm has expanded into the international market in the United Kingdom and Canada. The majority of its online purchasing is for wedding bands and engagement rings. The company uses marketing to enhance the knowledge of its products among its consumers. The business also has the ability to offer instructional information on its items. Because of this, the firm is a strong competitor in the sector.

Market Structure. To assess and analyze the competitiveness of its rivals, every firm must first evaluate and examine its competitors. This analysis must cover how far relevant information on the company’s commodities and services reaches the target market. The amount and number of clients, as well as the size and volume of produce, are also factors in a company’s examination of its competition.

The company can use competitive analysis to build a better understanding of the market and identify customer needs and demands. The Blue Nile’s competition comes from both online and physical enterprises.

Since the Blue Nile Company has always been able to outcompete its rivals due to its excellence in the jewelry and diamond business, no one has ever been able to best it. The main challenges faced by the Blue Nile Company are Zale, sterling, tiffany, and Heklzer (E-Commerce Students, 2009).

The majority of internet shopping competitors follow the Blue Nile approach of purchasing from suppliers only when an order is placed by consumers.,, and are just a few of the numerous online retail competitors that practice this method. The Diamond Source was made available to the client via the company’s website.

The firm’s consultants are also taught how to help consumers through the buying process and proper product selection, as well as shipping rules to be followed. Some rivals do not provide assistance and have lower return rates for non-customized purchases. As a result, Blue Nile continues to be the most competitive company in the market (E-Commerce Students, 2009).

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The company’s objective is to provide a large supply of low-cost, high-quality diamonds that satisfy client demands. To enhance awareness and increase efficiency, the business also aims to give good information about its diamonds to future consumers through internet sales.

A Fortune 500 company, De Beers is one of the most well-known and recognized names in the diamond industry. The firm sells more than 60,000 distinct diamonds and forms of exquisite jewelry including rings, necklaces, pendants, watches earrings, and more. All diamonds are unique in shape and size; as a result, they provide customers with a broad range of choices while also enabling the business to compete favorably with its rivals.

Key Success Factors. The following are the four key variables that must be found in order for a company to establish its marketing strategy. These elements aid in altering customers’ behavior and purchasing habits. One of the factors that contributes to Blue Nile’s success is the company’s policy of providing information about diamond jewelry grading, form, and price. Customers are attracted to buy diamonds from Blue Nile because of its large variety of products at reasonable costs (E-Commerce Students, 2009).

Mission statement. The mission statement of the Blue Nile Company is to develop an inexpensive, efficient, and effective way for consumers to buy diamond and fine jewelry online. The firm also intends to provide a wide range of high-quality goods at a reasonable price, as well as convenience and customization.

Customers can quickly and easily learn more about the diamond’s quality shape and texture after visiting the firm’s website. Customers may personalize goods and have them shipped within three working days. The company receives input from clients on its website, which helps them obtain the greatest orders from their suppliers.

Porter’s Five Forces. Porter identified these competitive forces as the driving force behind a company’s ability to detect and address its flaws. They are the factors that drive up or down a firm’s profits.

Competition in the Industry. The Blue Nile Company has had to compete with a lot of other businesses both domestically and across the world. The quality of the jewelry business has been enhanced by increased competition in pricing and information provision to customers. In addition, competition in the jewelry sector has motivated clients to purchase goods online.

The market confusion has caused Blue Nile to suffer losses as a result of the pressure to hire more educated consultants to advise customers on the best goods and product characteristics. The Blue Nile has quickened the communication process with clients by advertising.

This has resulted in the company’s advertising expense increasing. Similar services are provided by rivals of the Blue Nile Company, which limits the company’s market potential to generate income (E-Commerce Students, 2009).

Threat from New Entrance. The Blue Nile Company is presently the most important threat to the company’s continued existence. This is due to new firms entering the jewelry business, which attempt to entice clients with low pricing. The startups achieve lower costs than their competitors in order to offer their goods at reduced rates.

However, new market entrants in the jewelry sector are not always able to have an impact on Blue Nile Company’s sales since they lack industry experience.

Threat of Substitute Product. Due to the fact that new businesses in the market offer low prices on rings, bracelets, necklaces, and other jewelry, some clients have switched from the Blue Nile Company to their firms. Although this has not been as significant since more consumers have risen up.

Changes in the bargaining power of buyers and suppliers
Customers’ purchasing patterns have been shifting as a result of the economy’s fluctuations. The company’s efforts to raise consumer awareness and provide them with choice have also played a role in changing customer behavior.

The company has raised the investment budget as a result of customer conduct. The price of production for Blue Nile, however, has increased due to global economic change (Alkhafaji, 2003).

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