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Blue Nile pestel analysis. Blue Nile is a publicly traded company. The company was established in 1999 and is headquartered in Seattle, WA and is one of leading online retailers of diamonds and fine jewelry.

Extracts from this document...

Introduction

Final paper Lars Isaksaetre, Henrik Oiseth, and Jason Casey BUSA 499, Section One Professor Pham May 13, 2009 Table of contents Executive summary........................................................................ page 2 Company profile.............................................................................. page 3 Overview of the jewelry industry....................................................... page 4 External environment.................................................................. page 5 Industry analysis........................................................................ page 10 Jewelry supply chain................................................................... page 16 Industry value chain, Jewelry Retail.................................................. page 19 Company analysis........................................................................ page 24 SWOT....................................................................................... page 46 Financial ratios.............................................................................. page 50 Strategies.................................................................................... page 53 Preferred strategy.......................................................................... page 60 EVA.......................................................................................... page 62 Blue Nile balance sheet..................................................................... page 63 References..................................................................................... Page 64 Executive Summary Blue Nile is a publicly traded company. The company was established in 1999 and is headquartered in Seattle, WA and is one of leading online retailers of diamonds and fine jewelry. In addition to serving the U.S. market, Blue Nile offers products to selected countries through its Canadian and UK websites. 70% of their sales are from engagement rings and wedding bands and they are known for being a high-end jewelry retailer. The company offers its products on its websites without actually holding the products. Because of its unique business model, it is able to sell its products at much lower prices than the competitors. After a thorough analysis of the trends impacting the market, and Blue Nile in particular, we have come up with a strategy that will maintain and improve the company's position in the industry. By increasing its focus on marketing, Blue Nile should be able to gain more of the market share in the online retail market. Blue Nile has had success since its start up and received multiple awards for its user friendly websites and business model. However, because of the fierce competition in the market Blue Nile operates in the company needs to seek for continues improvement and take advantage of the opportunities in the market place. The company has achieved high customer satisfaction for its existing customers, but lack of brand recognition in the general market place for diamonds and fine jewelry has restricted Blue Nile to perform upon its capabilities. ...read more.

Middle

Each and every company in the industry should be aware of opportunities and threats from competitors in order to grow. Human Resource Management Human resource management is the activity involved with recruiting, hiring, developing, training, and compensating personnel. When investing in new employees, companies should really think twice about whom they are hiring. Not everyone is worth investing in, but the ones that are should be taken care of and appreciated. Today, companies have policies for everything. All individuals should have the same opportunities to get a job and no one will be discriminated. Unfortunately, these things used to be a big problem, which is why these policies are in place. Companies are investing substantial amounts of money to provide training for employees and managers so they can provide excellent customer service skills and create long-term customer relationships. Training works as an incentive for employees because it shows that the company wants you as an employee and that they are willing to pay for further education. Other incentives used for employees are commissions on sales in the form of money, but also vacations and other types are used. Usually, companies have recruiters that travel around to promote the company and recruit new employees. Often they can be seen on campuses and job fairs. Human resource management is commonly used in order to increase productivity. Data will be collected for managers to see, and manual processes will decrease due to the human resource management system. This activity can also be outsourced just like the other activities, but often people are hired for the purpose of hiring new employees. This can be beneficial if the person has a lot of experience in the field of hiring, because companies are more likely to get people that are a good fit and can work for a long time. Technology Development Technological development is those activities managing information processing, research and development of new practices that could add "knowledge" to a firm. ...read more.

Conclusion

Resource and Capabilities Is the Resource or Capability Valuable? Is the Resource or Capability Rare? Is the Resource or Capability Costly to Imitate? Organization Competitive Consequences Brand name Yes No No No Competitive parity Customizing of diamond rings online. Yes Yes No Yes Temporary competitive advantage "Just in time" Inventory Management Yes Yes Yes/No No Temporary competitive advantage High Quality Yes No Yes No Competitive parity Low Cost Structure Yes No Yes No Temporary competitive advantage SWOT Analysis A scan of the internal and external environment is an important part of the strategic planning process, Factors such as strengths or weaknesses, and opportunities and threats are the classifications used in this analysis. It provides helpful information that matches a company's resources and capabilities to its competitive environment. (http://www.quickmba.com/strategy/swot/) The primary purpose of the SWOT analysis is to identify the positive and negative factors, so that firms can take an objective look at its business. The analysis will be a useful tool in developing goals and marketing strategies (http://articles.mplans.com/how-to-perform-a-swot-analysis/). Strengths Blue Nile has established a well-respected consumer brand using an informative sales process that gives its customers more power while offering a broad selection of high quality jewelry at competitive prices. This makes it the leading online retailer in the United States. The "Build your own" feature allows customers to customize their diamonds. Blue Nile has 60,000 stones and a global network of suppliers, which also makes the company the largest web retailer of engagement rings as well as a specialist in selling high-end jewelry online. Blue Nile generates about 6.3% of all online jewelry sales, which supports its leading position even further. This leading market position gives the company greater bargaining power with suppliers. The business model that Blue Nile currently operates is unique. It only has inventory for its fine jewelry that it sells through its websites. The diamonds that are displayed are available with the suppliers, but Blue Nile is not holding them. When an order is placed, the company notifies the third party supplier who holds the inventory. ...read more.

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