Business Strategy of Blue Nile Inc. Based on the PEST analysis of the company, the biggest success factor for Blue Nile has been the Technological factors. The company is completely dependent on the technological factors. It is an online retailer of diam

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Blue Nile Inc. was founded in 1999 and today it has grown to become the world’s largest online retailer of diamonds and jewellery.

Key success factors of Blue Nile:

  • Quality products offered at a competitive price.
  • Value for money
  • Fast delivery with a 30 day money back guarantee
  • Educational information provided
  • JIT system at place
  • Easy interface of the website
  • Excellent customer service

External Environment

Based on the PEST analysis of the company, the biggest success factor for Blue Nile has been the Technological factors. The company is completely dependent on the technological factors. It is an online retailer of diamonds and fine jewellery. Unlike many of its competitors like Zale, Tiffany’s etc. it does not have a brick and mortar outlet. Technological factors like the rise and development of internet, growth of e-commerce are some of the factors that influence the company’s success. Better communication technologies also help the company in its supply chain which is a key part of the company’s success.

The company plans to expand its operations in the international markets. Technology will play a key part in their expansion strategy. Another factor in the company’s future success is the global forces. The company believes that in the future more than half their revenue will be from the international markets. Global factors like international trade policies, changes in the global markets will play a key part in their success. Due to globalization and the ease of international trade policies, Blue Nile has managed to enter the market in almost 40 countries.

From the PEST analysis, we can also see that a factor for their success is the social forces. Many international markets like India and the Middle East have cultural factors, lifestyles and attitudes that give importance to jewellery. These factors will definitely help the company enter these markets. Even in the US market, diamonds play a huge part in the social life. Their main product has always been the diamond engagement rings and the main reason for their success has been the choice that consumers have from over 60000 diamonds and the ability to customize their product according to the individual tastes.

The economic conditions play an integral part in Blue Nile’s success. The recent global economic crisis had a negative impact on the company. Their profits fell.  But, in the past couple of years the economic conditions have improved leading to an increase in the company’s revenues. An increase in the economic growth rate, decrease in inflation rates, interest rates are some of the factors that have affected consumer confidence and their discretionary income thereby leading to the company’s success.

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We can also look at the external environment factors contributing in the company’s revenues with the help of Porter’s five forces model.

One of the main and integral aspects of Blue Nile’s success is its efficient and highly effective supply chain. The company’s economical supply chain system and low operating costs have allowed Blue Nile to obtain most of its products at a more cost-efficient way than its main competitors.  But in doing so, Blue Nile has also successfully managed to limit the power of its suppliers. They have limited the bargaining power of its suppliers. For example, the top ...

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