Blue Nile

Porter's five forces analysis focuses on the factors that influence a firm's ability to earn a profit: the bargaining power of buyers, the bargaining power of suppliers, the threat of substitutes, the threat of new entrants and the intensity of rivalry within the industry. The online jewelry business, and Blue Nile in particular, has only a moderately favorable business environment. The company is relatively small in the jewelry business at 0.005% of the total jewelry business that it has weak bargaining power with its suppliers. Blue Nile deals with this by cutting out layers of wholesalers in order to contain costs with suppliers. It also has low bargaining power with buyers, because there is some degree of buyer skepticism about buying jewelry online vs. in-store where the merchandise can be viewed with the eye. In addition, offline jewelry stores represent a high threat of substitutes, and there are...
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