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Strengths for Black Canyon
Black Canyon Coffee (BCC) has several strengths associated with its business. As stated in the text, Black Canyon has a wide-range of locations unlike other coffee giants such as Starbucks. Starbucks has made obvious efforts to locate its stores in high-end areas, and we have all seen how the company is not afraid to place one store directly across the street from another. BCC’s layout of local stores creates a self-made, homely environment for the business – this helps to lay the foundation for the company’s unique autonomy of operations. This particular aspect allows for flexibility, creativity, adaptation to community interests and demands, which all contributes to better products and services. Another strength stemming from the varying locations is BCC’s ability to undercut competitor pricing. The text states that while coffee giants are located in tourist-flooded areas like the Night Bazaar district, BCC is camping out in residential shopping malls with prices THB20 cheaper than Starbucks.
Perhaps the greatest strength of BCC is its awareness and realism. Pravit, the founder and manager of BCC, is well aware that they cannot beat companies like Starbucks at their own game. This means that they must compete with them indirectly by capturing opportunities without letting them go unnoticed. Another strength of BCC is the company’s theme, name and décor. By choosing this theme they took advantage of Thailand’s interest in cowboys and Native Americans, along with the United States’ Old West culture. Although many Thai people mistook BCC for another American chain, it’s safe to say that they have embraced the local business with open arms. Other strengths for BCC include a strong, loyal customer base, along with the demand trends for their products. Coffee and food can be considered to be necessity goods; if the economy takes a fall, it will be safe to assume that people will still buy food and drinks out of need, let alone the products’ affordability. BCC also benefited from the strength of being self-made and forcing owners to push through tough challenges in the beginning. This helps develop confidence and experience. The owners also claim that there is a great company culture, and they are surrounded by a family of good partners, shareholders, managers, staff, etc. This also contributes to BCC’s flexibility and closeness as a whole.
Weaknesses for Blue Nile
Blue Nile, Inc. has many strengths that seem to be offset by its weaknesses, creating the perfect scenario for average operations and being “stuck in the middle.” By now it’s well known that Blue Nile’s greatest strength is online operations and global outreach; well, it is at least well known in certain areas of the world. The climb from the middle requires crossing global boundaries, which is made difficult because of different cultures around the world. According to the text, many countries have not fully adopted the online American consumer habits. Although many parts of the world have become great sources for E-commerce giants to gain market control, other countries have great potential and are yet to enter this market. According to the 2013 Global Retail E-Commerce Index, China occupies the top spot for online consumption, while the other “G8” countries all place within the top 15 (Atkearny.com). India is the world’s second-most densely populated countries in the world, offering a great source of retail sales for companies like Blue Nile to grow. However, the only problem is they cannot be reached. Of its 1.2 billion inhabitants, only about ten percent of them have access to the internet. This can be attributed by poor financial resources and even poorer logistical infrastructure (Atkearny.com).
Apart from external factors, Blue Nile also has internal weaknesses. The absence of physical store locations makes it difficult for the company to penetrate local markets, many of which have extremely loyal customers that every business needs to sustain itself. Blue Nile’s narrow distribution channel creates great risk should issues arise. The company’s single carrier partnership allows it to reach an economies of scale in shipping expenditures, but more importantly it increases the risk of delivery halts. The book uses the UPS strike as an example in which more than 185,000 Teamster members went on strike against UPS on August 4, 1997 (Isreview.org). This could put a huge halt on Blue Nile deliveries and potentially destroy its reputation for convenience, as well as affordability. Blue Nile’s JIT inventory system is another “strength” that also has a complementary weakness. Inventory is not ordered until sales are made, creating a time between the order and delivery for issues to prevent the customer from actually getting the product. As compared to physical locations, customers get to handle and try on jewelry, as well as leave the store with their purchases. Blue Nile’s product affordability results in relatively low or average gross profit margins. Larger companies are able to mark up their goods and earn reasonable returns, especially since their target markets are willing to pay for brand names.
Another weakness for Blue Nile is the availability of technology and online presences. The company was one of the first of its kind, but selling goods primarily online is not enough to adequately differentiate yourself from competition. Other core competencies must be exercised and innovation is imperative. The book states that companies such as Zales, signet, Tiffany and Helzberg are all following Blue Nile’s footsteps and making their online presence be known. Technological imitation is an even bigger problem when DeBeers is entering the online markets and controlling forty percent of the world’s diamond supply at the same time.
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