Blue Nile is an average business-to-customer (B2C) model e-commerce company. Around our live, most people will not buy luxury goods (like vehicle, jewelers or expensive accessories) from online retailing. Because you will see a very big risk when it purchased and travel. But just 8 years quickly, Blue Nile possessed become the world's major online precious stone sales companies. And to be well-known jewellery brand same as Tiffany&Co. Blue Nile doesn't have any sturdy stores. However they had sold out thousands of gemstone just rely on online marketing.
Blue Nile is a best circumstance of e-business. Unlike a few of its challengers, such as Tiffany's and DeBeer's, who've a brick-and-mortar stores as well as an online business, Blue Nile produces all of its sales via the web. Addition there are a few extremely competitive online rings industry include mondera. com, ashford. com, denmans. com, gem. com and kirabo. com. But Bluenile. com received the "Best of the greatest" prize from Forbes in a study of the Internet's top sites among all categories. So the Blue Nile, Inc have to has a unique facet of sales and management to draw in customers. The simple way business lead to success, Its position clear, and has a much specific gain market. It is aimed at those who wish to buy diamond wedding rings for men.
Therefore the Blue Nile product line including the diamond, the marriage abstains as well as the jewellery widely and so forth, but its variety hits the merchandise to be very explicit - -stone, occupied above its advertising operation 70%. Otherwise, Blue Nile mostly as a business-to-consumer (B:C) model. However, bluenile. com also produces revenues from internet marketer programs, where companies can earn commissions by producing sales of Blue Nile's products on their own websites. The affiliate programs represent a kind of business-to-business (B:B) model. Furthermore, Bluenile. com provides links to consumer-to-consumer (C:C) sites such as yahoo. com that feature comments from customers who have purchased jewelry online by Blue Nile.
1b ) In what ways, does indeed the Blue Nile impact in changing the jewelry industry? Explain.
General, sales of diamond is not very specially. But Blue Nile is totally clear sales for diamonds. Diamond sales industry has always been a huge advantage industry. However the general consumers don't know how many income when the gemstone is bought. Then Blue Nile post details and pricing of 50 000 precious stone online. This behaviour has attracted a big quantity of consumers.
In addition, in order to increase the e-business purchase of luxury's trust, creating his own Blue Nile expert; image, website more content size is focused on gemstones and jewellery selection of in-depth introduction. And this, in the ventures of both attributes of asymmetric information.
Blue Nile attract customers not just a comprehensive and translucent consumer guide, and moreover its price competitiveness. Prices of the products than other vendors for approximately 40% lower, although price is extremely competitive. At the same time, Blue Nile keeps the high quality of the gemstone. Every diamond must undergo a demanding selection process, the quality is great, every precious stone has been an unbiased quality evaluation and certification to ensure quality, the assurance of purity in a color, as well as the slicing process on industry benchmarks. Furthermore, Blue Nile is also provided the variety of choice to customer that can't be offered in any jewellery store. They have 52000 dimensions, colors and shapes vary nude diamond. There are various types of engagement ring bracket for customers to choose, and customer can view the online collocation test functional results. At the same time, it also offers excellent service and security to discourage customers purchase online diamond worries
In addition to specific challengers, there are two other large objections to Blue Nile's business design. Blue Nile must remember that the key program is purchasing jewelry by online store that consumers cannot actually see and touch the merchandise. So the company must recognize that its prospects are heavily exposed to influence by offline marketing. "The use of the web is exclusively a matter of execution-nothing more than a tactic a company uses to meet its strategic objectives. "
1c) what are the critical success factors of Blue Nile Company?
Bluenile. com has several success factors including definite marketing aim for, brand identification, low and clear costs, enough capital support etc.
Blue Nile's customer foundation is relatively easy to define. You will find about 70% of the $50 billion jewelry industry is male customer. Every year roughly 500, 000 guys wanted to take part in the United States. Because of this, Blue Nile's specifically focuses on those men between 20s and 30s who are searching for an engagement ring. The Blue Nile use direct online sales method of match target market, which is preponderantly web-savvy. There are several characteristics and issue for Blue Nile needs to identify when marketing to possible client. First, men always ignorance about the earrings industry. Matching a survey of just one 1, 200 people conducted by market research organization, 75% of men said they do not consider themselves experienced when they purchasing rings. The client spends average three hours on the site before the actual purchase. However, Blue Nile is keenly aware that lots of visitors just collect information by the website before investing in a piece of earrings offline. The men cannot be underestimated in the online rings business. Men definitely want to win over their significant person when they purchase proposal jewelry and other earrings items. Although 56% of men will pay more to make sure their significant person will be happy with her gift, men remain worried about getting the most discount. Yet another statistic, Blue Nile needs to consider is the fact 59% of males enjoying shocking their girlfriends or wives with superb gifts of jewelry. This presents both an opportunity and a risk for Blue Nile, which just lately commenced adding more product offerings such as designer watches and earrings to the web site.
Blue Nile comprehends how to attain its focus on consumer. The very best online jeweler has positioned ads on male-oriented tv shows such as CBS Market Watch and Monday Night Football. Furthermore, Blue Nile has signed up with other businesses, such as Lexus and Mercedes-Benz, pressing products to affluent consumers on RedHerring. com. Blue Nile has also secured location on AOL earrings category. In another tactical, bluenile. com keeps a top position on Microsoft's MSN shop.
Content: the info and possibilities at bluenile. com, which gives a huge amount of educational materials that even the most inexperienced rings customer can understand. General, men insufficient knowledge about jewelry, the educational content provided on bluenile. com is an absolute source of value. Visitors to the website can learn how to determine quality of diamond jewelry, the guide likewise incorporate peruse charts and illustrations, view images of various jewelry products, examine a glossary of terms and complex explanations as well as understand how to look after and care for jewelry. The educational information provided is obviously important to Blue Nile's marketplace, especially since 45% of all men conduct no research prior to purchasing an gemstone.
The structure and graphics at bluenile. com were evidently designed with a male audience at heart. The usage of blue on the site welcome page, an obvious interface and simple to use menus that will assist tourists obtain information quickly and feel convenient at bluenile. com.
The website supplies the education was created to help site visitors make an objective, logical choice when purchasing a jewelry item. The website also offers a configuration intend to help customers choose the best diamond because of their wife or partner. In short, bluenile. com helps eliminate customers' anxiety and eliminate the adverse selection inherent with buying something whenever a little prior knowledge for the merchandise. Other content features that add value for the consumer include gift recommendations, registration to get a free Gemstone Buying Guide, links to fashion manuals and satisfied customer necessity.
1d) Follow the performance of Blue Nile's stock since 2004 (go to http://finance. yahoo. com/) and make reviews.
BlueNile. com has integrated an aggressive progress strategy, You will find bringing up $42 million in money. Notable traders include Kleiner Perkins Caufield & Byers, Bessemer Opportunity Companions and Vulcan Projects. In addition, Blue Nile received a $14 million revolving line of credit from GE Capital. $50 million profits in 2000 empowered Bluenile. com to capture roughly 7% of the web rings market, which is expected to increase to $2. 2 billion in 2005.
The graph shows the fluctuation of share price of Blue Nile Company from 2004 even today. The statistics on the horizontal axis signify the years and those on the vertical axis symbolize the show price of the company.
As can be seen, the share price was at about $35 at the start of 2004 and then there is hook increase until end of 2005 with just a little fluctuation. Out of this year on, there is a gradual progress in the share price of Blue Nile. Because of the effect from the increase price of international crude petrol, the show price soared to an archive high ($100).
As is illustrated in the graph, the share price of Blue Nile reduced year by time after it come to the peak by the end of 2007. The considerable decrease occurred for the reason that it was afflicted by the cover price in U. S. and subprime crisis. This situation did not stop until it hit a trough at about $18 at the beginning of 2009. However, soon after, the situation transformed and there is an upward development in the number of the talk about price which reached a plateau until 2010. After 2010, the share price declined gradually again whilst it was between $40 and $60.
2a) Amazon. com makes only a 15% margin on the rings products it markets. This allows Amazon. com to sell precious stone earrings for $1, 000 (traditional jewelers fee $1, 700 for the same). Do you really feel that Amazon. com will succeed in selling this type of earrings as Blue Nile does in advertising expensive engagement wedding rings?
Amazon even though it was an extremely successful online marketing companies, he has a huge chain of suppliers and funds to ensure that its product quality and after-sales service
But the style of Amazon. com can be an aggregate e-business model where the key value is selection and convenience. Amazon aggregates the merchandise of many suppliers in a sing location.
It sold a wide variety of goods, but not targeted. Although Amazon has a powerful price advantages, jewelry products only 15% of earnings. For instance, this gemstone earrings, Amazon's price is nearly the traditional jeweler of 70%, this is a very attractive, but will have a very good sales, but it isn't possible as the Blue Nile to sell expensive gemstone. Because the Blue Nile's success is not only a simple price advantages, there are extensive places, including market setting, product quality and choice Internet site tips to, etc.
Amazon Diamond Earrings while the price is cheaper than traditional jeweler, but is not picked and the earrings have a clear market orientation. Therefore, this ring sale can only count on the Amazon brand effect or other factors, because he doesn't have a complete set of value system
2b) Competition between Blue Nile and Amazon. com will continue steadily to increase. In your opinion, which one will win (visit their web sites and observe how they sell jewelry)?
Competition between Blue Nile and Amazon. com will continue steadily to increase, however in online jewellery industry competition, Blue Nile still retains the absolute advantage. Although both companies have many advantages, but in comparison to Amazon and Blue Nile, there a wide range of shortcomings.
Blue Nile and Amazon are the best of ebusiness industry. They had the more common advantages; for example, they may have a huge amount of financial support, the best servicer after sales and move.
But Amazon is more like a huge online shopping centre, it has an array of goods for folks to choose Customer need everything that may be found here, and it is also the supplier of choice, be evaluation then choose the appropriate item.
So Amazon is an online sales website, but is not the maker. For instance jewellery product, through the Amazon website, it has the co-operation with several traditional jewellery producer and owner, it has also assured Amazon's ample resource and quick delivery, furthermore Amazon has the splendid transport service and the post-sale service, these are Amazon become the most well-known online sales website the successful factor.
But weighed against the Blue Nile, Amazon or some deficiencies on jewellery sales
1, Blue Nile's target of market and sales is clear, There are 70% of customers who would like to purchase price quality gemstone who dedicated purpose to enter this site and choose their merchandise, but the Amazon customer goals are those who like Internet shopping people, some of them have their own purpose and buy goods, but others just go shopping-browse, which significantly reduces visitors to Amazon's purchasing behavior, and even though you want to buy jewellery product, tend to be professional website.
2, Blue Nile's products are high quality, from Blue Nile at first established, Blue Nile tight choose suppliers, but also offers its designers, inventor of gemstone, and product validation. Blue Nile independently to sell of every piece of precious stone are carefully preferred by their professional, because online shopping the biggest difficulty is the fact consumers see real goods, but the Blue Nile customer nipped this concern, they guarantee they sell for every single product same as the website and 30-day earnings guarantee, to make customer satisfied. And Blue Nile product line is very rich, and even can make a unique product, which will entice more customers.
3, BlueNile. com is not simply a diamond sales Web site, is also a professional Diamond brand, including the creation and sales, but it didn't provide an entity shops, but it just spend a few years sales surpassed the other challengers. It is a company specializing diamonds business, customers could said the brand of the diamonds is Blue Nile, but Amazon is similar to an agent, Amazon is not brand for anything.
4, Blue Nile has significant price advantages. Since there is no entity shop, all the expense of the Blue Nile are only diamond itself and transport costs, as it significantly reduces the amount spent on lease and sales staff, Blue Nile's costs of online is actually the original stores 50% for same product. Although Amazon has similarly price advantages, but since Amazon is the role of intermediaries, the supplier remains the original jeweller, so the price continues to be significantly less than the Blue Nile
5, Website interfaces. Blue Nile Internet site is easy to understand, notably for male clients. The home page shows the primary products and information, it immediately you can find what they want to save time, while also accelerating the Blue Nile consumer purchase regularity. Don't let customer have any moment to purchase the products. In this respect, Amazon as Blue Nile as reproducibility is a thorough sales website, it is not possible to add all products shown on the house webpage, It only connect to the individual product categories, making the customer's procedure was complicated and it is not yet determined, for the very first time, I find the jewels of the link, it is one of the numerous directories that I did not find him.
These differences echo the Blue Nile in online jewellery diamonds sales of absolute advantages, which explains why it can deter powerful competition
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