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Overview Of Blue Nile Inc Marketing Essay

1093 words (4 pages) Essay in Marketing

5/12/16 Marketing Reference this

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Generic strategies can be defined as fundamental approaches to strategic planning adopted by companies or organizations in any market or industry in an effort to improve its competitive performance (Porter, 2006). Blue Nile Inc. has adapted two fundamental generic strategies, which include focus strategy and differentiation strategy. Combining business model together with these strategies determines Blue Nile Inc.’s position in the jewelry market (Porter, 2006).

The company has adopted the differentiation strategy in that it has made an effort to develop as well as market unique products for different clientele segments (Porter, 2006). Further, being an online retailer of unique and rare diamonds and gemstones, Blue Nile Inc. offers shoppers useful information as concerns the different products and services they may desire. This is the best strategy the company can adopt since it has very few or in other cases, no competitors thus enjoying competitive advantages, managing to sustain expensive advertising campaigns (Ibid, 2006). On the other hand, focus strategy is whereby a company or organization concentrates its resources on expanding or attempting to enter in a narrow industry or market segment (Porter, 2006). Blue Nile Inc. has employed this form of strategy as it is aware of its segment and has products capable of satisfying its needs competitively. By going online, the company focuses on smaller, specific niche of clients as compared to focusing on segments across the entire market (Porter, 2006).

Financial and Strategic Performance Indicators

Performance indicators can be defined as a measure of an organization’s or company’s performance. These measures are used to assist the firm in defining and evaluating how successful it is as well as how much progress it is making towards its long term organizational objectives (Porter, 2006). To measure its financial and strategic performance, Blue Nile Inc. largely focuses on competitive pricing, efficient and economical supply chain as well as lean cost. This is favored by the fact that it has established a unique online approach and designed a website displaying the numerous distinct diamonds and gemstones they offer to their clients (Ibid, 2006). Owing to its well-designed website and lack of physical shops, the company is able to cut a great deal of costs from its operations, enabling customers to enjoy reduced jewelry prices.

In addition, due to holding numerous advertising campaigns both off and online, majority of the clients are able to visit Blue Nile Inc.’s website, creating an advantage for the company as it increases product awareness to customers (Porter, 2006). By using the website, Blue Nile Inc. is also able to reach its target market in order to sell their products. The cost of advertising had gone up in the past and this had forced the company to pull out from advertising through their website. To compensate for this, they ensured that its jewelry consultants were efficiently trained so as to give the clients quality information as regards the products during sale of their products (Porter, 2006). As a result, the company being in a position to fulfill its order’s operations designed to suit their individual needs increased clients’ confidence and value.

The main performance indicators for Blue Nile Inc. were customer support and service held in high regard by the company. It believed in the purchasing power of its clients that needs to be respected at all times (Porter, 2006). Product line expansion was observed as the last performance indicator for the company. Blue Nile Inc. was in a better position to calculate clients’ response and opinions as concerns new products in the market before they could actually be introduced since it could show case and sell jewelry still stocked by suppliers (Porter, 2006). Another financial and strategy performance indicator for Blue Nile Inc. is that of internal motivation. Provision of stock options to non-employee directors, officers and employees were instituted in the stock-based compensation plans by the company (Ibid, 2006). The company used a supply chain considered the better option being offered by traditional distributors and wholesalers of diamond.

The company’s equity in the jewelry market is enhanced through its online business model since it incurs minimal expenses as regards its operations in the process of carrying out its business activities and transactions (Porter, 2006). Offering the customers reduced product prices increase their loyalty in the products and services offered by Blue Nile Inc., placing the company in a favorable position in the market as compared to those running mortar and brick establishments (Ibid, 2006). Strategy performance indicators of Blue Nile Inc. are also determined by provision of excellent and effective communication mechanisms focusing on the need to provide the client with information they would need to carry out online transactions (Porter, 2006). Therefore, supply chain ought to be faultless in order to encourage timely delivery of products once a client has completed the purchasing process. Financial and strategy performance indicators success is determined by the popularity of its products and services as indicated in the financial statements (Porter, 2006).


Blue Nile Inc. should consider presence of physical stores in addition to having an online shop within specific high ends market, as this would contribute to the enhancement of distribution network of the jewelry (Porter, 2006). The company should also be aware of the stiff competition the current jewelry market is facing as new and upcoming businesses venturing into this kind of business are rapidly emerging as the population grows. The Company or the CEO can thus decide to formulate its niche in the jewelry market through specialization of specific and chosen jewelry (Ibid, 2006). This would in turn enable the company to take as much advantage of the economies of scale as possible. By doing this, it will also colonize the jewelry market for the particular jewelry (Porter, 2006).

Specializing on a particular kind of diamond or gemstone, the quality is bound to improve, surviving any potential threat of competition. The company should consider maintaining a given line of product and/or service in order to ensure sustainability through quality despite the company’s CEO claiming that Blue Nile is comfortable being a monopoly in a fine collection of high-quality diamond (Porter, 2006).


It has been observed that online business model offers Blue Nile Inc. some form of competitive advantage as regards its equity in the jewelry market. By including costs as part of SG&A expenses, Blue Nile Inc. drastically reduces financial burden to their clients and are thus in a position to expand its product line, offering a wide range of jewelry having differentiated pricing.

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