Blue Nile, Inc. Essay

Vision and Mission low-spirited Niles vision is to educate its guest ft so that clients slew make an informed, confident decision no matter what event they be celebrating. It wants to make the entire diamond-buying process easy and hassle-free. In addition, an important better of puritanic Niles vision as CEO Diane Irvine said in a recent webinar with Kaihan Krippendorf, is for the gild to be seen as the smart focal point to buy diamonds, while saving 20%-40% to a greater extent than matchless would in the typical jewelry store. (Hoffman, 2010, p.1).ObjectivesThe objective of the case study of racy Nile is to valuate and study their rate of flow line of products system. Internal and external analysis be used to identify the weak points or aspects of their current strategy. Other courses of challenge will be identified to improve the implementation of mordant Niles strategy. Alternatives will be recommended to growing the stigma name for colored Nile. away and Int ernal AnalysisPorters Five Forces Model competitor among Competing Sellers. Rivalry among competing sellers is the pie-eyedest among the five sources of Porters Model. There be umpteen competitors in todays diamond food market. This makes the rivalry between inconsolable Nile and its competitors high. There atomic number 18 small mom and daddy funds, the larger retain stores alike Tiff all and Co. and DeBeers. sullen Nile is faced with an early(a)(prenominal) online competitors like themselves as well as websites much(prenominal) as EBay and Amazon. The arguing is exceedingly intense to gain customer base. With all the rival each caller-out mustiness be able-bodied to asseverate their customer something they cannot find with any of the others. Bargaining business office of Buyers. The Bargaining power of the vendee is high in the diamond purchasing world. The bargaining power for the buyer with Blue Nile is culture medium because customers are able to see the p rice of their desired leverageand shop around to find a better price or deal. faulting exist for the customer is virtually none existent because they can interchange 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 lumber. 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 agency in order to turn in 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 step in pr oduct for Blue Nile. The threat falls into the medium category because other substitutes do exist. Some substitutes are diamonique, cubic zirconia, or other by artificial means 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 many another(prenominal) people still choose the substitute. Threats of New Entrants. There is an gain of smart entrants as it is straightway easier than ever before to enter the diamond market. In the past the inaugural cost was extremely high making the grip 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 potency with their consumer. Being the largest online dealer in the world helps them to confine their position in the market. U nfortunately, 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 erudition 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 fight ring. Customers are able to choose and design their own ring with plectrums such as clarity, size and the shape of the diamond. Customers can in addition choose from many settings for their meshwork ring.Customer service is a priority to Blue Nile. They offer their customers a personalized get under ones skin to build customer potency. 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. handy billing and insurance options are other ways that Blue 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. alone 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 filament 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 trim down(p) cost than the competition because they avoid the mark-up from third-parties. Their virtual online instrument 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 exercise 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 p urchasing 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 also 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 tobe strong they still need to change magnitude sentiency of their brand name. The lack of brand cognizance puts 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 finger 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 increased customer confidence.Opportun ities sales for Blue Nile nearly 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. forked 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 other than would not purchase because of the risk of making this type of purchase online. Sales would increase because customers guide 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 long amount of sales and will expand their brand name by religious offering their products transnationally. The international market is an attractive opportunity for Blue Nile to unfold 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 prove 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 disfavour because most competitors will havepurchased their diamonds at a much lower price because they have them in their current inventory. In order to conceal 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, mak ing their target market mostly men. The famous brand of Tiffany and Co makes it a very plummy 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 area that they must continually be aware of because letting their guard down could cause them to lose market. Because of these threats, Blue Nile must continue to strive to drum above the competition.Problem IdentificationGiven that Blue Nile has competitors that threaten to contract 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. source 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 ascustomers tend to enjoy the hands on experience of purchasing expensive jewelry from a physical store. Customers tend to spend more per purchase at a physical location. This would increase both sales and brand awareness. Expanding their merchandi se 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 Study 10. In Strategic Management and Business Policy (14th ed., pp. 10.1-10.16). Boston Pearson.