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Case Study Analysis # 5
Blue Nile, Inc.
Cassandra Bingham
June 11, 2014
BUAD 5355
Strategic Management
Instructor
Dr. David J. Rambow
Associate Professor of Management
Summer Term 2014
Virtual Campus
Wayland Baptist University
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Case Study Analysis #5: Blue Nile, Inc.
Blue Nile is the largest online diamond retailer in the U.S. which was started in 1999 by
Mr. Mark Vadon and today the CEO is Miss Diane Irvine. Their exclusive product line is
mainly their high quality diamond engagement rings and fine jewelry such as “gold,
platinum and sterling silver, earrings, rings, pendants, bracelets, watches, necklaces, etc.
(Hoffman, 2011, p. 54). They have reached out globally and currently are operating
through their United Kingdom and Canada websites. Since Blue Nile is an online business
it is safe to say that they are driven technologically.
Although, Blue Nile does not have as many employees as their competitors, they still
managed to be awarded “the Circle of Excellence Platinum Award" for their excellent
customer service (Hoffman, 2011, p.55). The purpose of this internal analysis is to conduct
the analysis by using the Internal Environment Analysis Model to identify and list specific
strengths and weaknesses from Blue Nile’s resources, capabilities and competencies, as
well as, presenting evidence of these specific strengths and weaknesses. Additionally, I
will identify the company’s core competencies and show evidence by arguing why these
internal activities meet the criteria for a core competency. Finally, I will identify two
strategic issues from the case related to its internal analysis.
Internal Environment Analysis Model
In order for an organization to be competitive and remain competitive they must conduct
an internal analysis of their organization. A SWOT Analysis, which identifies the
organization’s strengths (S) and weaknesses (W), as well as, their opportunities (O) and
threats (T). This
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analysis is part of the external analysis and the internal analysis (Hitt, Ireland &
Hoskisson, 2013, pp. 40-93). There are essentially three components which are the
foundation of the competitive advantage and they are: (1) Resources (tangible &
intangible), (2) Capabilities and (3) Competencies (Hitt et al., 2013, pp. 79-84).
Resources
Tangible. Tangible resources are the organization’s “assets which can be observed and
quantified, examples are equipment, facilities, distribution centers, etc. (p. 80). It is also
assets which can be appraised at an actual or approximate value. Value is something for
which the product was created to be given to the customer as the foundation for the
