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Business Policy Essay

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Below is an essay on "Business Policy" from Anti Essays, your source for research papers, essays, and term paper examples.

Case: Blue Nile, Inc., in 2010 (case 9 in text)

1. How strong are the competitive forces confronting Blue Nile and other online retail jewelers? Which one of the five competitive forces is the strongest? Do a five-forces analysis to support your answer.
After reviewing all the five competitive forces, my analysis showed that the weakest of the fives forces is the threat of new entry’s despite the possibilities of selling of a good with a high contribution margin, it is very challenging and expensive to develop a new competitor that could go head to head with Blue Nile and make a profit, let alone survive the competition. Supplier power is a modest force due to the fact that Blue Nile depends on one of the thousands of diamond suppliers for the diamonds they use since they do not pay for a diamond unless it is ordered first by the customer. The reason why they are not too big of a force is because there are plenty of other suppliers to turn to. The top three suppliers accounted for only 24 percent of the company’s purchases in 2009. Another modest force is competition from rivals. This is only a modest force because Blue Nile has a bigger brand recognition name and economies of scales due to their large size in addition to the high customer loyalty from consumers. However they do have to be wary of the competitors who can easily steal their customers due to no switching costs. The second strongest of the forces has to be buyer power since buyers can switch instantly at no cost, they tend to be well educated in regard to what they want in addition to being very price sensitive . The strongest force they have to deal with is competition from substitutes such as the common retailers like Jared. These substitutes usually have a physical store customers can visit and explore in real life rather than judge on a computer screen. The goods are usually available the moment customers look for a substitute. Nonetheless this does not stop Blue Nile from exploiting the fact...

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