Blue Nile Case Study

Case Study- Blue Nile

Business Strategy

In a short period of time Blue Nile has become the largest Online Diamond retailer in the World. Their approach to online retailing was much different to the approach that other retailers had chosen. Blue Nile felt that many people would be initially extremely hesitant about buying jewelry online because this is generally a “ high touch” purchase. So they developed a website that had a lot of information on the site to make the buying process easier for the customer. They decided that providing a complete education experience would be extremely beneficial to their online customers. Also they set up strategic alliances with distributors in order to receive diamonds in only a day from their warehouses. This benefits the customer by allowing them to get their product in only a few days. Lastly they carried very little inventory which allowed them to have lower costs and they were able to past this savings along to their customers. This significant savings made it a great competitor in an industry that was dominated by individually owned shops. Other retailers had a more than a 100% markup on their products. Blue Nile only had a 33% markup on their diamonds and was more profitable then most of the other companies. However, with the immense success there is always room for improvement. The opportunities that Blue Nile had were expanding into other countries, expanding their product lines and capitalizing on their markets that they had already moved into.

Expanding into other countries was a new untapped strategy for Blue Nile. This was a new market that could have two different types of results. This could be extremely successful and produce many more sales to this already successful company. Or it could fail and waste the time and effort of many people and take away from their core business in the United States. If Blue Nile wants to move into new markets, they must do this strategically. They...