Solution Pages: 4
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Questions Covered in the Solution:
Prepare an Individual Case Write-Up on the “Blue Nile” case study from Strategic Management: Competitiveness and Globalization, Concepts and Cases Hitt et al. 2015.
- How would you explain the business-level strategy for Blue Nile and each of the competitors mentioned in the case? What are the pros and cons of each strategy? You are encouraged to frame this in terms of business model or alternative strategy as long as you also address generic strategy.
- How does this strategy fit into Bradley, Hirtand Smit’s tests for strategy?
- What core competences did Blue Nile develop to make this strategy so successful? Is this core competency becoming obsolete?
- Analyze the potential for competitive rivalry in this business. Assess market commonality and resource similarity, and then Blue Nile’s awareness, motivation and capability for responding to moves by rivals.
- What strategic options should Blue Nile consider based on the preceding analysis of rivalry? Should Blue Nile alter its value proposition, change its resources or capabilities, or what? Recommend two sets of actions.
Sample of Solution:
Blue Nile has grown out to be very successful in a very competitive market, where everyone is in search of getting a share in customers’ luxury spending. It primarily operates in the engagement ring category, catering for a good chunk of online engagement ring buyers. It initially started locally, but over the years it has expanded its operations globally expanding its customer base and hence revenue too. Its disruptive existence created a two-horned dilemma in the market resulting pricing confusion for the existing players. So with its exclusive focus on high-quality products, it has seen good growth days in the last couple of years. It’s a classic example of taking a single point of contact and using it to the fullest potential. Courtesy of its only online presence, Blue Nile is able to provide good quality diamond rings at a price lower than its brick and mortar competitors. Essentially, core strategy of Blue Nile is to provide convenience to its potential customer, by using online customer support and product displays.