nile case sample

nile case sample - Whitney Michelle Clark 11139238 Blue...

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Whitney Michelle Clark 11139238 Blue Nile Inc. Case Study October 13, 2011 GBA 490-003 1. 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. The competitive forces that are confronting Blue Nile and other online jewelers are moderately intense and likely to increase with time. Rivalry among competing sellers is affected by the broadness of the product line, trust in the website (certification and grading reports), quality and price. Companies who are also marketing on Google and other sites are also increasing Blue Nile’s competitive pressure. Futhermore, buyers switching cost are very low, also increasing competitive pressure. It is not difficult for a buyer simply to go to another website for their purchase. The threat of potential new entrants is most likely going to continue to increase in the future. Online retailing is on the rise in general, and online jewlrey sales are increasing according to the case. However, barriers to entry are high. There is a small pool of candidates to enter the market and the cost of developing, marketing, maintaining and building a good reputation on a website are expensive in the establishment of a website. Networking is low and has to be improved. Competition among suppliers is extremely high and much of Blue Nile’s success is from its economical advantage in it’s supply chain. Most suppliers are offering a very similar product to very similar markets; therefore, competition among suppliers requires them to make special arrangements with jewelry markets. This gives retailers, like Blue Nile, a break when it comes to operation costs. Competition from the availability of substitutes is the strongest competitive force. Mostly because buyers switching cost are very low. Also, other online diamond retailers use a similar business model when compared to Blue Nile, so it is easy to switch among retailers. New entrance to the market may offer an attractive price or new quality features while they are establishing their site, further increasing the competition. 2. What key factors will determine a company’s success in the online jewelry business in the next 3-5 years? The online jewlrey business success will depend largly on its relationship with suppliers and abilty to maintain low operating and buying costs because of this relationship. Pricing is an additional success factor. Jewlrey businesses will have to ensure to cover expenses with pricing, but not raise the price high enough to drive customers to another substitute. Also, the company’s ability to to keep up with technology will have an effect on their business. The company will need a simple, easily found webpage with educational information and proof of creditability.
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This note was uploaded on 12/14/2011 for the course AC 100 taught by Professor Strickland during the Spring '11 term at Alabama.

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nile case sample - Whitney Michelle Clark 11139238 Blue...

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