Strategy - Case Study Example

I. What does Blue Nile do well? Blue Nile is an online jeweler company that has several distinct advantages over its competitors. It successfully incorporated luxury with e-commerce “confounding predictions that luxury and e-commerce would never mix” (C-127)." Its economical supply chain enabled the company to sell fine jewelry online at a substantially lower cost than its competitors. It made buying online easier by offering easy to understand information about jewelry that gave potential customers an informed decision before making the purchase.

Its economical supply chain allowed it do business at low operating costs that translates to comparable fine quality jewelry pieces at substantially lower prices than those of reputable local jewelers. This is coupled with excellent customer support that made Blue Nile as one of the most reputed online seller of jewelry evidenced with the awards it received. It was ranked 58th in internet Retailers "Top 500 Guide to Retail Web Sites" in 2009 and had been named best online retailer by Kiplinger Personal Finance each yeal between 2006 and 2009 and had been listed as a Forbes Favorite by Forbes magazine every year since 2000.

In addition, Blue Nile had received the BizRate.com Circle of Excellence Platinum Award which recognized the best in online customer service as ranked by actual consumers. Blue Nile is the only jeweler to have received this award. This translates to positive company image that inspires confidence among its customers to purchase high valued jewelry online. II. How does that become part of the value proposition Blue Nile’s cost efficient supply chain and the platform it used in selling (via e-commerce) enabled it to operate at a marginal cost that ultimately translates to selling comparable fine quality jewelry pieces at substantially lower prices than those of reputable local jewelers.

Its reputable company image, evident with its awards it got from various award giving bodies reinforce confidence among its customers that prompted them buy high valued jewelry on a platform that lacks customer physical contact. III. Is it Valuable? The arrangement of Blue Nile with its suppliers to only purchase the jewelry once an order has been made is its invaluable comparative advantage over its brick and mortar competitors who sell comparative fine jewelry pieces. In addition, its platform of using the internet to sell enabled it to operate at a nominal cost that finally translates to its very competitive price. IV. Is it Rare?

The business model of Blue Nile can no longer be considered as rare because its competitors such as Diamonds.com and whiteflash.com offers almost the same kind of product and service. What makes Value Chain of Blue Nile rare are its awards that patented itself as a reputable company where customers can confidently purchase high valued jewelry that guarantees customer satisfaction. V. Organizational ready? Blue Nile pioneered the idea of combining e-commerce and luxury which was thought to be not possible before.

It was also the first online jewelry company to initiate education drive among its prospective customers to make jewelry buying easy. It also has the infrastructure of highly knowledgeable customer support whereby customers can call to ask questions about jewelry. To date, Blue Nile is on an expansion drive launching its Chinese language website in April of 2010. All these factors makes Blue Nile more than ready to cater its customer’s jewelry needs. VI. Evaluation of the external environment The lingering effect of poor economic conditions in the United States which is its primary market is the biggest threat to Blue Nile.

Customers tend to cut back first on discretionary spending like jewelry purchases during a recession which could affect Blue Nile’s bottom line. In addition, competitors are also beginning to use e-commerce as a platform of their business. The external environment of Blue Nile can be summed up as a weakening market and increased competition. VII. Strategic actions must Blue Nile do to maintain/grow its position Blue Nile has to expand its operation overseas to cater to underserved market to compensate for the declining sales in the domestic market. VIII. Does it have the capability to do that?

Blue Nile has already launched several websites outside United States. It has already established a business in the United Kingdom (www.bluenile.co.uk), Canada (www.bluenile.ca), Dublin, Ireland and China (with its Chinese language site launched in April 2010) whose performances are encouraging. This validates has the organizational and technological capability to expand its operation overseas to cater underserved market.