Blue Nile Case

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 very intense and competitive because online jewelers are very competitive. There are more product selections, quality, price, customer service and support and reliability. Moreover, customers can compare prices of online jewelers with their local jewelry stores to see which one is better buy. The buyers are the strongest competitive force because online retailer jewelers are all about customers first.

Rivalry among various online jewelry retailers is centered on attractive price, selection and variety of products, the certification and trustworthiness of the information/guidance provided to online shoppers (education information, in dept product information, access to professional grading reports.). They research links with Google and other browses. The strength of the rivalry among online jewelry retailers is affected by the online jewelry segment of the overall retail jewelry industry is rapidly maturing, this will increase rivalry. Rivalry among online retail jewelers is a moderate source of competitive pressure that is likely to intensify over time.

Buyers have low switching cost, it is simple for consumers to find and visit competitor websites this increases rivalry. Most of online jewelry’s compete on fast delivery, this weaken the strength of the rivalry.

The barriers to entry into the online segment of the jewelry industry are defined by the cost of developing a Web site, and the cost of developing order fulfillment capability and achieving short delivery times. Expenditure for advertising and promotion needed to draw visitors to the web site and build a trustworthy reputation and image. The factors affecting the...