Blue Nile, Inc. Essay

Vision and Mission dingy Niles vision is to educate its node prime so that guests ordure make an informed, confident decision no matter what event they atomic number 18 celebrating. It wants to make the entire diamond-buying process easy and hassle-free. In addition, an important spark off of muddy Niles vision as CEO Diane Irvine said in a recent webinar with Kaihan Krippendorf, is for the participation to be seen as the smart focussing to buy diamonds, while saving 20%-40% more(prenominal) than hotshot would in the typical jewellery store. (Hoffman, 2010, p.1).ObjectivesThe objective of the case study of coloured Nile is to label and study their trustworthy line of merchandise scheme. Internal and external analysis argon used to identify the weak points or aspects of their current strategy. Other courses of achieve will be identified to improve the implementation of inconsolable Niles strategy. Alternatives will be recommended to increment the smear name for gr im Nile. multinational and Internal AnalysisPorters Five Forces Model contestation among Competing Sellers. Rivalry among competing sellers is the significantest among the five sources of Porters Model. There argon mevery an opposite(prenominal) competitors in todays diamond grocery. This makes the rivalry between voluptuous Nile and its competitors high. There atomic number 18 small mom and part condescends, the larger retain stores analogous Tiffany and Co. and DeBeers. hot Nile is faced with otherwise online competitors like themselves as well as websites such as EBay and Amazon. The rivalry is highly intense to gain customer base. With all the challenger each caller-out mustiness be able to put out their customer something they cannot find with any of the others. Bargaining reason of Buyers. The Bargaining power of the buyer is high in the diamond purchasing world. The bargaining power for the buyer with Blue Nile is sensitive because customers are able to s ee the price of their desired leverage and shop around to find a better price or deal. substitution comp rescind for the customer is virtually none existent because they can turn over to another company if they do not like the price, customer service, or other things associated with their purchase.The benefit Blue Nile has over the bargaining power of the buyer is they have prices set below their competitors with the same great smell. Bargaining Power of Suppliers. There are only a limited number of suppliers for Blue Nile to choose from, making the bargaining power of the supplier high. Blue Nile must depend on their suppliers to deliver their products in a timely carriage in order to picture timely delivery to their customers. Suppliers are able to dictate their prices to Blue Nile because of the limited amount of suppliers. Blue Nile cannot accept prices from one supplier that supplier can easily find another company to sell to. Threat of Substitute Products. There is a threat of interfere product for Blue Nile. The threat falls into the medium category because other alleviations do exist. Some substitutes are diamonique, cubic zirconia, or other artificially made diamonds.Some people will choose a substitute as they cannot afford to purchase and expensive diamond. Even though the quality is not the same as a real diamond more an(prenominal) people still choose the substitute. Threats of New Entrants. There is an summation of upstart entrants as it is at one time easier than ever before to enter the diamond market. In the past the startup cost was extremely high making the launching of new companies low. It is easier for new entrants today because the availability of the internet to reach customers. Also, the startup is low in online business.SWOT AnalysisBlue Nile has a strong position in the market because they have continued to gain faith with their consumer. Being the largest online dealer in the world helps them to retain their p osition in the market. Unfortunately, Blue Nile is facing threats and weaknesses that can deteriorate their market position. The increasing competition from other companies as well as their weak brand information are a major cause for concern.StrengthsBlue Nile is the leader in online jewelry making. They have a unique selling position as they were the first company to allow an individual to customizetheir diamond employ ring. Customers are able to choose and design their own ring with fillings such as clarity, size and the shape of the diamond. Customers can alike choose from many settings for their meshwork ring.Customer service is a priority to Blue Nile. They offer their customers a personalized gravel to build customer confidence. Many options are made available to their customers through their website. Customers can choose from toll-free calls, live-chat, or email as a means to contact customer service. well-provided billing and insurance options are other ways that Blu e Nile strives to provide excellent service to their customers. Customers are offered a bill me later option as well as a 30-day money back guarantee. solely orders are shipped to their customer fully insured to build customer confidence in Blue Nile.With as many as forty suppliers Blue Nile has the capability to maintain a unique supply kitchen range model. They maintain strong relationships with their suppliers. Their diamonds are offered for direct sale from their cutters. This allows Blue Nile to purchase stones at a bring low cost than the competition because they avoid the mark-up from third-parties. Their virtual online neckcloth permits them to have limited inventory on hand, therefore decreasing their carrying cost.WeaknessesBlue Nile does not have a physical store which takes away from the experience of touching and seeing the actual meshing ring that will be purchased. A diamond engagement ring is a large investment. When customers purchase a diamond online they are taking a risk at purchasing a diamond without being able to examine or actually touch their ring. This risk causes the purchase prices to be lower than those purchased in a physical store. Customers are more comfortable purchasing a more expensive ring from brand name stores like Tiffany and Co. Customers are besides more confident in their online purchase with Tiffany and Co. because they have a physical store and the popularity of the Tiffany and Co. brand name.Although Blue Nile is continuing to grow and their business model appears to be strong they still need to amplification sensory faculty of their brand name. The lack of brand awareness glide bys other competitors such as Tiffany and Co an advantage over Blue Nile. They need to create more ways to bring recognition to their brand name. Customers will not find out secure purchasing a large purchase from a brand they do not recognize. Increasing their brand name will give Blue Nile an increase in sales as well as inc reased customer confidence.Opportunitiesgross revenue for Blue Nile almostly focus on diamond engagement rings. Men are mostly the target for purchases of engagement rings. Blue Nile can increase their sales and their target market by branching out into other jewelry products. A broader product base can open up their target market to woman also. branched out with a physical store front can also increase Blue Niles sales and brand recognition. Having a chain of physical stores will give those customers an opportunity to purchase from Blue Nile who differently would not purchase because of the risk of making this type of purchase online. Sales would increase because customers lam to spend more per purchase when visiting a physical store as it reduces the perceived risk of the customer.Globalization is a huge opportunity for Blue Nile. This would open up a broad amount of sales and will expand their brand name by religious offering their products internationally. The international market is an attractive opportunity for Blue Nile to strain their customer base. Competitors such as Tiffany and Co have already tapped into the international market so for Blue Nile to remain competitive they must anticipate to globalize their business. Currently only thirteen percent of sales are from the international market.ThreatsThe increasing cost of diamonds is having an impact on profitability for Blue Nile. They have a virtual inventory, meaning they purchase their diamonds at the current spot rate. When the price of diamonds is increasing this puts Blue Nile at a blemish because most competitors will have purchased their diamonds at a much lower price because they have them in their current inventory. In order to keep back prices competitive Blue Nile most likely will absorb the cost of the increase in the diamonds.Blue Niles main threat is the competition of other companies such as Tiffany and Co and DeBeers. Tiffany and Co. is the biggest threat to Blue Nile as they are famous for their diamond engagement rings, making their target market mostly men. The famous brand of Tiffany and Co makes it a very enviable choice for those men seeking to purchase an engagement ring. Many of Blue Niles competitors also offer many of the same benefits as a purchase from Blue Nile. Customer service, experts to assist in the purchase, and return policies offering customer satisfaction have become a norm among most competitors.Many other online jewelry companies are entering the market for online jewelry purchases. They should continue to monitor the new companies entering the market. The threat of new entrants is an subject area that they must continually be aware of because letting their guard pour down could cause them to lose market. Because of these threats, Blue Nile must continue to strive to rise above the competition.Problem IdentificationGiven that Blue Nile has competitors that threaten to enrapture the customer base, what can Blue Nile do to capture additional customer base? Given that Blue Nile needs to increase sales and tap into a different market, what can Blue Nile do to increase sales and brand awareness?SolutionsTo attract additional customer base Blue Nile should create additional products to attract the female customer base. Blue Nile should offer bracelets,necklaces, and other items that would broaden their customer base. As of now mostly younger men have the need to purchase an engagement ring. By offering additional products their customer base could grow to also include older men as well as females. possible action up their market to this additional customer base can increase their sales significantly.In order to increase sales and brand awareness Blue Nile should look at two solutions. The first is to open a chain of brick and mortar stores as customers tend to enjoy the hands on experience of purchasing expensive jewelry from a physical store. Customers tend to spend more per purchase at a physi cal location. This would increase both sales and brand awareness. Expanding their merchandise line in other countries would also increase their customer base. Blue Nile should use their same strategy of providing diamond jewelry to the international markets.ReferencesWheelen, T., Hunger, J., Hoffman, A., & Bamford, C. (2014). Blue Nile, Inc. Case theme 10. In Strategic Management and Business Policy (14th ed., pp. 10.1-10.16). Boston Pearson.