Blue Nile

Blue Nile

Case Analysis

Jennifer McHale-Volk

Policy and Strategy Formulation

Dr. Charlene Glenn

December 2, 2011

Contents

Introduction………………………………………………………………………………………

Company Background

Identified Problems…………………………………………………………………………

Strategy……………………………………………………………………………………..

Products and Services………………………………………………………………………

Customers and Markets……………………………………………………………………..

Identification of Strategic Goals

Internal Strengths…………………………………………………………………………..

External Factors…………………………………………………………………………….

Industry Data………………………………………………………………………………

Competitors………………………………………………………………………………..

Financial Ratios and Analysis

Financial Health Assessment……………………………………………………………….

Competitors’ Financial Performance…………………...…………………………………..

Works Cited………………………………………………………………………………………

Introduction

Blue Nile is a global on-line seller of high quality diamond jewelry based in Seattle, WA. The company reported sales of $302 million in 2009 and is currently the world’s largest online retailer of certified diamonds and fine jewelry (Thompson and Eastburn C-127). Much of Blue Nile’s success can be attributed to its strategic mix of high quality, low costs, and superior service. Although Blue Nile has proven to be a resilient and successful on-line merchant of high-end products, the company has faced its share of challenges in a tough economic climate and must confront those challenges head-on with revamped strategies that will allow it to achieve financial prosperity, sustained competitive advantage, and future growth.

Company Background

Blue Nile began in 1999 as InternetDiamonds.com, a retail website operated by Seattle jewelry store owner, Doug Williams. At the time, Williams was operating InternetDiamonds.com as a small side-business to his local jewelry store, when consultant Mark Vadon, a highly satisfied customer of the on-line diamond site, purchased the on-line portion of the company and renamed it Blue Nile (Bates 181)....