Blue Nile Case Study

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Tony Qian 1/13/2011 BUAD 441 – Individual Case Study1 Blue Nile, Inc. – World’s Largest Online Diamond Retailer 1. What key factors will determine a company’s success in the online jewelry business in the next 3-5 years? The online jewelry business will be highly dependent technology. They will also need to keep good relationships with the organizations that certify their diamonds. They need to give their customer a safe, comfortable environment in which to make high dollar purchases. Educational information will have to be easily and readily available to the customer to help them make their decisions. They need to prove to the customer that they can provide (near) equal shopping experience as a brick and mortar jewelry store while providing better prices. 2. What is Blue Nile’s strategy? Which of the four generic competitive strategies discussed in Chapter 1 most closely fit the competitive approach that Blue Nile is taking? What type of competitive advantage is Blue Nile trying to achieve? Blue Nile strives to offer high quality jewelry and competitive prices and also provide information about their products and provide guidance through the purchase process. They are trying to create a cost-based competitive advantage by having cheaper prices on their high-quality jewelry compared to traditional retailers. 3. What do you like and dislike about Blue Nile’s business model? I like Blue Nile carrying a low amount of inventory. By not buying a gem from a supplier until a customer purchases it, it strongly limits the amount of risk and cash tied up at any point. I also like that they have a very lean supply chain that strives to eliminate middle men, keep costs low. This allows them to sell their products to the customer at very competitive prices. I do not like their marketing aspect being completely based upon the internet. A

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