Bluenile

Caroline Miller

Harper Tucker

Management 415

February 11, 2008

1. Economic Features-

• In 2006, the jewelry industry in the US was estimated a 55- 60 billion dollar industry.

• The US jewelry market had grown at a compound annual rate of 5.7 percent of the last 25 years.

• In 2005, the US was believed the represent about 50 percent of the global diamond jewelry market.

• Blue Nile management believed that the companies market share of online sales of engagement rings exceeded 50 percent in 2005.

2. External Factors-

• Technology- Blue Nile is an online based company, so technology plays an ultimate role in its success.

• Supply Chain- Blue Nile is able to skip particular distribution channels due to them being online. This helps them to pass up the mark ups of traditional layers of diamond wholesalers and brokers. This saves them a lot of money.

• Competition- The competition is Zales, Tiffany’s, Kay Jewelers, DeBeers. The online competition is diamonds.com, whiteflash.com, ice.com, jamesallen.com.

• Product Innovation- very low for this type of market.

3. Driving Forces-

• Huge growth in the use of the world wide web. This attracts customers due to the ease of access, hassle free and convenient aspects of the internet.

• The globalization changes are growing exponentially. It is very important for these companies in this market to adapt to the globalization concerns through supply chain management.

• Entry for the low end jewelry market is high, however, the entry for fine jewelry and diamond market is low due to the scarcity of diamonds available to sell.

• Societal concerns- the customer concern over blood diamonds.

4. 5 Forces Model