There are several problems that Blue Nile needs to deal with if they wish to remain on top such as:
❖ One of the major problem with web based marketing is maintaining and driving consumer toward the website which will pose blue Nile’s major challenge going into the 21st century so how to attract new consumers.
❖ How should Blue Nile Inc increase consumer awareness and confidence purchasing high value luxury jewelry online?
❖ Blue Nile has very little presence outside of the United States and only offers a limited number of products in United Kingdom and Canada.
❖ The cost to buy keywords on Internet search engines rose significantly in 2005, which result in cutting back on advertising expenditure, which lack in attracting customers.
❖ Traditional jewelry retailers such as Zale’s, Sterling, and Tiffany have begun to sell products online increasing competition for Blue Nile.
❖ Blue Nile’s expenses for sales and cost for general and administrative expense are increasing as a percentage of net sales. This presents a problem because Blue Nile’s competitive advantage in the online jewelry market largely depends on their low costs and low prices.
❖ Blue Nile has an excessive amount of debt, which can damage its credit rating and overall financial condition.
Strategic Issues
Blue Nile needs to address five major strategic issues:
❖ Blue Nile needs to decide how it can further deal with the obstacles associated with online retailing.
❖ Blue Nile needs to decide if it should expand its operations and offer more products outside of the United States.
❖ Blue Nile needs to determine how it can effectively and affordably market its products online.
❖ Blue Nile needs to determine how it can retain its market share when faced with increasing competition in a small industry.
❖ Lastly, Blue Nile needs to address its financial problems before the problems