Through arrangements with suppliers, they are able to offer a large inventory of loose diamonds at low prices. Until a customer orders a stone, Blue Nile does not have to purchase it. Besides being able to have small inventories, this set up allows them to be paid by the customer before they have to pay suppliers. Using this cost saving supply chain also gave them the advantage of being able to set a markup price lower than competitors. The nature of their business model enabled them to enter the fairly new online market and compete based on lower prices.
*Five-Force Analysis: Rival Seller in the industry: • There is more than just one online jewelry store online customer search as many jewelry stores as they want. • Big name jewelers are confronting strong competitive force from locally 2. What key factors will determine a company’s success in the online jewelry business in the next 3-5 years? Key factors such as excellent marketing, offering of reasonable prices, vast product differentiation, offering of great product quality, and reaching out to gain new customers are all crucial to jewelry business. 3.
Power of Suppliers – Low There is low supplier concentration relative to the industry they sell to and a single supplier does not account for a large part of a retailer’s business. This weakens the overall power of the supplier because there are more supply options available for discount retailers. The emergence of private labels has also reduced supplier leverage. Supplier power is further weakened by low switching costs and non-differentiated products. As the retailers incur virtually no costs by changing suppliers it is easy for them to play them against each other to get better terms.
Blue Nile Inc. in 2010: Will its Strategy to Remain Number One in Online Diamond Retailing Work? 1. How strong are the competitive forces confronting Blue Nile and other online retail jewelers? Do a five-forces analysis to support your answer. Rivalry among competing sellers: Rivalry among competing sellers is very strong.
BJ’s strategy focuses on providing their shoppers more groceries and packaged goods in small portions. Sam’s is concentrating more on reducing their product cost. Sam’s is using other countries, like China and Mexico, to but from to help keep their cost down. When it comes to determining who have the best strategy out of the three rivals we believe Costco is using the best strategy due to the fact they use the deny dock distribution, which allows them to be cost efficient. By Costco finding ways to insure they are cost efficient they are able to offer their customers reasonable prices.
Followed by our assessment of the current business strategy. Then we will review with you your financial performance from 2005-2009. Followed by our recommendations that we think will strengthen Blue Nile’s competitive position, future strategic, and financial performance. Five forces analysis: -Rivalry amongst competitors Rivalry amongst competing sellers in the diamond and fine jewelry market is intense and by far the strongest of the five forces. Many factors like size and number of competitors in the industry, degree of product differentiation, switching costs for the buyers, and exit barriers lead to this determination.
IKEA does this buy distracting its customers by making their products colourful, stylish, and cheaper than other competitors’ products. In addition, Old Navy pulls in its customer just as IKEA. Old Navy draws its customers by putting colourful clothing outside its stores. “American businesses have co-opted cool anti-corporate culture and used it to seduce the masses (Cave & Klein, 2000). They lower their prices and make their products alternative to competitors that are more expensive.
Another advantage to AAB is that it is easily implemented and changed as the cost to produce the product increases; this will benefit AAB as it will take less time to adjust the prices and save time, in the business to make sure all the other products are doing well. A disadvantage of using cost-plus pricing to AAB is that it doesn’t take into account the competitors cost or prices, this is a problem as the costs could be less for the competition meaning their prices may be lower, which would lead to less people shopping in AAB and more people going to their competitors for products of similar quality. Another pricing strategy that AAB could use is promotional pricing; this can be in a variety of forms such as loss leader, an
This has lead to a fall in profit of the company. This decision is taken based on the constraints theory as profit is not the most important issue, as incidents of phone exploding may lead to the company shutting down. Thus it is wiser for the company to focus more on the issue and solving it in order for the company to have a higher sustainability. Revenue maximisation means that the business tends to maximise the revenue in order to increase its market share. For example, a hotel manager tries his best to satisfy the customer without considering about the high cost spent.
Key Partners: Alibaba (only one I was able to find as they are pretty secretive about this). However, Blue Nile is very diversified in its suppliers (22% of products come from top 3). Value Propositions: Online retailer of diamonds and fine jewelry. A place where you can go to get a great customer experience and assistance in buying engagement rings, wedding rings, and fine jewelry. Educational materials are available if you need help.