...structures? Answer: Below table depicts the financial position of the three companies during 2008-09 with respect to sales which will help us find out their current state and also their probable reaction during difficult economic conditions. Financial Position(with respect to sales): | Blue Nile | Zale | Tiffany | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | Cost of sales79.6 | 78.3 | 50.96 | 52.9 | 42.2 | 43.5 | OperatingIncome5.4 | 6.4 | 0.33 | -11.74 | 13.85 | 16.28 | Inventory6.4 | 6.43 | 37.3 | 41.59 | 56.2 | 52.6 | Property Equip.2.55 | 2.42 | 13.93 | 13.38 | 26.01 | 25.2 | Below table shows the attributes of the products offered by the three companies. Blue Nile | Zale | Tiffany | * Highly customized * Tries to provide high quality * Wide range of prices * Low margin * Uncertainty of demand due to wide variety of products | * Not known for brand value * Product associated with working class * Product Positioning was not clear. | * High brand value * High margin * High price * Less variety * Exclusive * Prestige, blue box equity | Below table describes the attributes of the distribution system employed by the three companies Blue Nile | Zale | Tiffany | * Centralized distribution system * Low response time * High product availability in terms of variety of products * Low product availability in terms of physical availability * Returnability can be challenging. * High transportation cost. * Wide variety...
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...purchasing an existing diamond dealer website that later became Blue Nile. By 2009 Blue Nile has become one of the largest online retailers of diamonds. Selling diamonds is not all that Blue Nile offers, amongst their diamond jewelry there are plenty of other gold, platinum, silver and pearl pieces for purchase. In addition to selling diamonds, it also offers platinum, gold, pearl, and sterling silver jewelry. Blue Nile is a publicly traded company that operates in 25 different counties. It is headquartered in Seattle, Washington. Blue Nile offers its products through its United States, Canada and the United Kingdom websites for all product distribution. Lastly, Blue Nile has received several accomedations such as “Forbes Favs 2000-2005”, “Best Online Jewerle Jewelry ,Personal Fiance 2006”(1) The mission of Blue Nile is simple become the number 1 name in jewelry industry, which will be achieved through using high quality products with compelling values while providing customers with outstanding shopping experiences. Also while educating their customers and providing guidance to the way that Blue Nile offers it shopping experience. Many of the goods that Blue Nile offers aren’t actually held in house until a specific order has been placed. Compared to their competitors Blue Nile has an operating advantage through contracts with suppliers that allow them to sell at discount prices.(1) Executive Summary Since Blue Niles inception they have had their share of success. Their unique...
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...Blue Nile Case Group D Monday and Wednesday 11:00-12:15 Anthony Allen, Laura Blakeman, Daniel DeMaiolo, Carla Hill, and Mason Shattuck 1 Industry Analysis: Dominant Economic Features Definition of Jewelry Retailing Industry & Nonstore Retailer Subsector According to the United States Census Bureau, the Jewelry Retailing Industry (NAICS code 448310) “comprises establishments primarily engaged in retailing one or more of the following items: (1) new jewelry (except costume jewelry); (2) new sterling and plated silverware; and (3) new watches and clocks. Also included are establishments retailing these new products in combination with lapidary work and/or repair services” (United States Census Bureau Jewelry Industry Definition, 2008). While Blue Nile competes in the larger Jewelry Retailing Industry, it also competes in the narrower Nonstore Retailers (Subsector 454) category because of the e-commerce component of the business model. The United States Census Bureau comments that “industries in the Nonstore Retailers subsector retail merchandise using methods, such as the broadcasting of infomercials, the broadcasting and publishing of direct-response advertising, the publishing of paper and electronic catalogs, door-to-door solicitation, in-home demonstration, selling from portable stalls and distribution through vending machines. Establishments in this subsector include mail-order houses, vending machine operators, home delivery sales, door-to-door sales, party...
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...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. Blue Nile, Inc has been keeping at the lead of the pack even through the harder economic times, even though it has slipped a little since the products are more of a luxury item rather than a necessity. With competition gaining on Blue Nile they need to review practices and procedures and not get complacent with their standing in the field of expertise. Come up with ideas of expanding product line. Figure out what the next trend that parallels their business. The competitive forces confronting Blue Nile and its rival jewelers are very intense and competitive because online jewelers are very competitive. There are more product selections, quality, price, customer service and support and reliability. Customers are able to compare prices of online jewelers with their local jewelry stores to see which one is better buy. To gain more of a competitive edge Blue Nile will need to determine which of the five competitive strategies to employ – overall low-cost, broad differentiation, focused low-cost, focused differentiation, or best-cost. Being that the economy is not very strong right now, recommendation for an overall low cost strategy is one that should be employed. In order to be successful with this low cost strategy, Blue Nile needs to out do their competitors in cost effectively...
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...Introduction Blue Nile is the largest online retailer of diamonds in the United States. The company offers more than 60,000 diamonds on its website. The national average for an engagement ring is $3,200 but Blue Nile exceeds this number by having a $5,600 average price1. With no physical stores, no intermediaries and offering products four times cheaper than rivals, Blue Nile has proven to be a successful online retailer. Blue Nile is directly competing with both online diamonds merchants and physical stores diamonds retailers. Physical stores selling diamonds have tried to encourage customers that buying a diamond is a sensational experience that can only be realized in stores (and not online). They have highlighted the idea of seeing, touching and comparing diamonds that is exclusively possible in a store. Blue Nile has many competitors such as Tiffany and Co, Diamonds.com, and Zale Jewelers Stores. (Blue Nile. (n.d.)). These companies have tried to demonstrate that the price of the diamond is worth the unique and exclusive experience offered only in stores. Organizational background Everything started in 1999, when Mark Vadon, a consultant at Bain and Co. went to a Tiffany and Co. store in San Francisco, looking for an engagement ring for his future fiancée. He was a casual man wearing casual cloth. Vadon said that Tiffany and Co. salesperson ignored him and did not help him finding a ring because he did not look like a potential and interesting customer. After this...
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...#4: Blue Nile Corporate Strategy 1. Prepare a five-forces model of competition in the online retail jewelry industry. Conclude as to the strength or weakness of each force as well as the attractiveness of the industry overall. Rivalry Among Competing Sellers- There are many competitors in the online retail jewelry industry with overlapping characteristics in their business models. A very similar competitor that Blue Nile faces is Diamonds.com. Diamonds.com has expert gemologists. They offer "more than 40,000 loose diamonds" in a selection of settings. (Page 326) Their customers have the option to customize their purchases. They provide their customers with widespread educational knowledge for purchasing a diamond. They have excellent customer service by providing free shipping, an appraisal of the diamond, and non-customized orders receive 30 days to return the purchase after delivery. (Page 327) Diamonds.com offers substitute diamonds that are readily available and easily accessible to their customers. Another competitor in the diamond industry is Whiteflash.com. They too provide their customers with the option to customize jewelry. One service that they provide that is unique from their competitors is their diamond trade-up policy. This policy provides customers with a less expensive option to purchase a new Whiteflash diamond by trading in or exchanging their old diamond for a new, more expensive one. Their customer service features are not as high as Blue Nile...
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...its products at much lower prices than the competitors. The company had 183 full time employees, 5 part-time employees, and 1 independent contractor. | 2. BRIEF SUMMARY OF CASE SITUATION Business or Industry DescriptionBlue Nile had grown to become the world’s largest online retailer of certified diamonds and fine jewelry. | Blue Nile’s Current SituationBlue Nile reported $302 million in 2009. In 2010 Blue Nile management was concerned about the lingering effects of poor economic condition in the United States on the diamond jewelry industry and how it should pursue expansion in international business. | 3. INDUSTRY AND COMPETITIVE ANALYSIS Industry Macro-Environmental Characteristics-According with U.S Department of commerce U.S jewelry sales totaled $58.8 billion by 2009.- Diamond jewelry sales were particularly hard hit by the recession, with industry sales declining from $32.5 billion in 2005 to an estimated $29.5 billion in 2009.- The Jewelry Board of Trade estimated that there were some 22,415 specialty jewelry firms in the U.S in 2009, down from 26,750 specialty jewelry retailers in 1999. | Strategic Group MAPBlue Nile Zale Tiffany Others C U S T O M E R S | Industry Driving Forces-Internet: With Blue Nile and online jewelers, it gives them the ability to reach any single person who has internet access. In amassing product offerings, these online jewelers do not have to carry inventory. They are able to display tens of thousands of choices...
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...SWOT…………………………………………………………………………… page 46 Financial ratios…………………………………………………………………… page 50 Strategies………………………………………………………………………… page 53 Preferred strategy……………………………………………………………….. page 60 EVA……………………………………………………………………………… page 62 Blue Nile balance sheet…………………………………………………………… page 63 References…………………………………………………………………………. Page 64 Executive Summary Blue Nile is a publicly traded company. The company was established in 1999 and is headquartered in Seattle, WA and is one of leading online retailers of diamonds and fine jewelry. In addition to serving the U.S. market, Blue Nile offers products to selected countries through its Canadian and UK websites. 70% of their sales are from engagement rings and wedding bands and they are known for being a high-end jewelry retailer. The company offers its products on its websites without actually holding the products. Because of its unique business model, it is able to sell its products at much lower prices than the competitors. After a thorough analysis of the trends impacting the market, and Blue Nile in particular, we have come up with a strategy that will maintain and improve the company’s position in the industry. By increasing its focus on marketing, Blue Nile should be able to gain more of...
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...1. How strong are the competitive forces confronting Blue Nile and other online retail jewelers? Which one of the fi ve competitive forces is the strongest? Do a fi ve-forces analysis to support your answer. 2. What key factors will determine a company’s success in the online jewelry business in the next 3-5 years? 3. What is Blue Nile’s strategy? Which of the fi ve generic competitive strategies discussed in Chapter 5 most closely fi t the competitive approach that Blue Nile is taking? What type of competitive advantage is Blue Nile trying to achieve? 4. What do you like and dislike about Blue Nile’s business model? 5. What does a SWOT analysis of Blue Nile reveal about the overall attractiveness of its situation? 6. What is your appraisal of Blue Nile’s fi nancial performance based on the data in case Exhibit 5? How well is the company doing fi nancially? Is there evidence that Blue Nile’s strategy is working—what is the story of the numbers in case Exhibit 4? Use the fi nancial ratios in Table 4.1 of Chapter 4 as a guide in doing the calculations needed to arrive at an analysis-based answer to your assessment of Blue Nile’s recent fi nancial performance. 7. Does Blue Nile have adequate competitive strength to go head-to-head against its rivals? Do a weighted competitive strength assessment using the methodology presented in Table 4.4 on p. 123 of Chapter 4 to support your answer. Has Blue Nile built a sustainable competitive advantage in the online retail jewelry ...
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...of our examination was to identify the areas where Blue Nile Inc was doing well and point out some areas that require your immediate attention. We hope this analysis will benefit your company and guide it in the near future. PROBLEMS Blue Nile’s objective is to encourage customers to buy their products and that they are very strict in choosing their jewellery. Blue Nile is currently faced with some problems which have to be immediately addressed if they want to continue to prosper and are listed below. • Losing market share to rivals and net income is decreasing • Rising online market costs • Rising diamonds and precious metal costs • Minimal international exposure • Conflicting elements in the strategy RISKS Blue Nile created a niche market by selling quality jewellery online which was different from the customary brick and mortar operations. As an alternative of traditional jewellery stores, they marketed and sold their products via the internet which posed some risk that are distinctive for an e-commerce shop. Blue Nile’s risk consisted of: • Customers may not want to select their diamonds via the internet. • Additional on-line stores are increasing competition. • Adverse publicity - diamond mining has become a controversial subject. • Blue Nile keeps all of their computer records and communications in a single leased facility. • Computer hackers could corrupt Blue Nile operations and acquire private consumer information...
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...1. Key success factors in diamond retailing: * Quality standard: gems quality, certification, design * High-end service: high price must be paired with customer experience and satisfaction * High degree of product knowledge: diamond is a luxury products sold at a very high price, hence sellers are expected to have wealthy knowledge of the product to be able to present and explain to customers * Brand: as high value product, quality, luxury and exclusivity are expected. Besides, seller’s reputation is of significant value and top of the requirements * Customer loyalty: as more players enter the market, diamond jewelry designs become more and more common among the retailers, therefore it is easy for customer to switch from one brand to another because there is no unique design that can only be found at a certain brand. If a company succeeds in retaining customer’s loyalty, they have a huge advantage over competitors in the market. * Product education: because diamond shopping is not something that customer do frequently, therefore most customer will need comprehensive education and guidance so that they can comfortably and confidently pick out what they want. * Technology innovation to enhance customer experience at a low cost * Low pressure selling approach through customization: allows customers to build their own jewelry and select what they can afford * Distribution Network decision: retail store and/or online channel. This is a...
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...From: Blue Nile To: Board of Directors Re: Strategic Report Date: March 31, 2013 Executive Summary The mission of Blue Nile is to build a premier specialty retailer of jewelry by offering consumers high quality products at compelling values through empowering the shopping experience. We employee a best-cost provider strategy, focused on offering premium jewelry with attractive prices, while offering the shopper a comfortable and user friendly shopping experience. We aim to offer customers their desired piece of jewelry at an affordable price. To continue our dominance in the online jeweler market, we will continue to maintain strong relationships with our suppliers to keep our supply chain running efficiently. We will also continue to offer premium customer service to ensure the best shopping experience possible. With expansion into global and foreign markets, Blue Nile is constantly seeking ways to expand out market share, creating more value for our shareholders. Mission Statement To build a premier specialty retailer of jewelry by offering consumers high quality products at compelling values through empowering the shopping experience. Strategic Objectives Our objective, at Blue Nile, is to maximize our revenue and profitability and increase market share both domestically and internationally by offering exceptional value to our customers through a high quality customer experience that leverages supply chain efficiencies and an efficient cost structure. ...
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...bstract Blue Nile management supports shifting the company’s current competitive strategy from focused-low cost to broad low-cost in an effort to increase market share in the United States. Blue Nile will accomplish this by expanding its product line to include all types of fine jewelry and by introducing a signature jewelry collection. Product expansion will appeal to a larger customer base thus marketing will have to be significantly increased to inform new customer targets. The company’s current financial position supports expansion in the U.S. market. Blue Nile’s Strategic Horizons: Why the Company Must Think Broader Using figures provided by Thompson (2007), Blue Nile’s 2004 and 2005 market share of the United States (U.S.) jewelry industry was estimated to be 0.30% and 0.34%, respectively. These percentages represent a very small fraction of the industry’s $60 billion (2007) in annual revenues and leads directly to the key issue facing the company: Should Blue Nile take proactive measures to increase its market share in the U.S.? When it comes to U.S. market share Blue Nile has three basic options: 1. Accept its current U.S. market share and focus on opportunities in international markets like the United Kingdom, Canada, Europe, Taiwan, etc. 2. Focus on increasing its U.S. market share. 3. Focus on increasing its U.S. market share while simultaneously pursuing opportunities in international markets. If Blue Nile wants to focus on increasing its share...
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...Jena Natale Strategic Management Blue Nile Case February 13, 2012 1. The competitive forces confronting the Blue Nile and other online retail jewelers are very strong. The competitive forces are strong because there are many jewelers who have both online and in store options. This gives the consumer knowledge of the company, their products, the quality, and the customer service. With exclusive online retail jewelers it is hard to get your name, product, quality, and customer service known without people spreading it by word of mouth. Unlike popular websites, smaller industry websites must work harder to be known worldwide and becoming popular among consumers. If I were to forecast the future in 10 years I feel it would not change dramatically at all This is because the demand will not change and the buyers as well as the suppliers and potential entrants will stay the same, but the current competition and substitutes may change in 10 years with the economic conditions but to what extent I cannot say. Potential Entrants Attractiveness Popularity Customer Service Prices Availability Delivery Buyers Men Women Girls Boys Businessmen Businesswomen Couples Businesses Corporations Suppliers Diamond workers Gold workers Packaging companies Jewelers Silver workers Manufactures Mechanics Small Part Suppliers Current Competitors Tiffany Zale’s Overstock.com Gordon’s Kay Littman Jared Substitutes Wal-Mart ...
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...Noe Hernandez Management 425, Sect 10, 2257 October 6, 2015 982 words Blue Nile Inc. in 2011: Will Its Strategy to Remain Number One in Online Diamond Retailing Work? In the Article, “Blue Nile Inc. in 2011: Will its Strategy to Remain Number One in Online Diamond Retailing Work?”, we identify the Blue Nile Company sustains competitive advantage through the strong practice of Porter’s Five Forces Model. After conducting a Five Forces Analysis, the most important factors in the Blue Nile case, were the threat of new entrants and the rivalry among existing competitors in order for the Blue Nile Company to compete in the market and the ability to sustain competitive advantage. The Blue Nile company sustained competitive advantage by diminishing potential threats of entry to a moderate level. The threat level of new entrants was kept moderate by ensuring that network effects were present. These network effects were enhanced by the policies the company had. The Blue Nile customers faced high switching costs by giving up on valuable characteristics the Brand created for its consumers. Blue Nile’s strategy of providing educational information, in-depth product information, grading reports, customization, and attractive prices were all key drivers that increased costumer’s brand loyalty. All of theses unique services Blue Nile provided for the consumer became valuable for the costumer, therefore, creating high switching costs. Throughout the case we become aware of some of...
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