Blue Nile Essay

2281 Words Oct 25th, 2010 10 Pages
BLUE NILE

RESEARCH & APPLICATION 5-20

Total points = 58/60

1. What is Blue Nile’s strategy in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence from the 10-K supports your conclusion?

After reading through the 10-K statement for Blue Nile, it is apparent that they believe in a mix of customer intimacy, operational excellence and product leadership customer value proposition. Evidence in the marketing statement found on pg. 9 supports this. See Marketing Statement below.

They express their desire to provide customers with a non-intimidating environment, that they seek high quality from a trusted source
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Security is a huge risk.

• Credit card fraud or fraudulent payment methods. Use of e-commerce technology is risky.

Mitigating the standard risks to business operations require more generalized approaches. For example the risk of limited operating history making it difficult to accurately forecast net sales and plan expenses. Market research and trend analysis could help with better forecasting. I found it interesting that the 10-K filed in 2008 also listed this risk – you would think that 10 years in business would provide enough history to plan expenses and forecast with a bit more accuracy than in 2005. agreed

Another risk that hadn’t been addressed from the 2005 10-K to 2009 10-K was the loss of key personnel. It seems obvious that in four years time Blue Nile would have been able to find employees that would have the expertise and knowledge to address this situation. It does seem to be a bit bigger issue for internet companies in general, at least from what I understand…

Other risks such as inventory management, seasonal fluctuations, declining sales, increasing competition are risks all companies face. I would expect management has put proper procedures in place to address these risks.

However, what I would like to focus on is the risks that are unique to Blue Nile and other e-commerce companies. In 2005, purchasing diamonds via the internet was a huge risk. Not being able to see and touch the merchandise was

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