Nordstrom Company Analysis, Research Paper Example

Question 1

Nordstrom Full-line Store Distribution 2004

By the year 2004, Nordstrom had operational stores in 94 of the biggest malls in the United States.

Question 2

Nordstrom’s customer base ranges and varies across the board to include all the customers who can afford Nordstrom’s products. The customers are:

Women: these are the predominant target customers for Nordstrom. This is because the mainstay of Nordstrom’s business is women’s shoes. This forms the largest part of their production lines.

Men and Children: this is a smaller department within the company. It is a subsidiary production line that sells shoes for men and children.

The target market for Nordstrom’s products is the upscale customer. The company aims for the customers living within the higher price bracket end of the market. This is evident in the 5^th Avenue store that forms one of the largest stores for the company.

The company can also be seen to be targeting the upscale customer through its production of limited edition products. This strategy is usually employed only if the company seeks to provide their products with prestige and status, attracting the upscale customer who is willing to spend extra dollars to have a unique and stylish product. In this case most of these products are women’s shoes, handbags, jewelry, accessories, cosmetics and even fragrances. This is also because women are considered the most fashion sensitive segment of the market.

Personally, I do not shop at Nordstrom. This is because the pricing of Nordstrom’s products are too high and at times not sensible for the products to which the prices are tagged. These products are for prestige rather than to satisfy given wants.

Question 3

The inverted pyramid model that has been employed at Nordstrom has appeared to work for the company. Nordstrom’s inverted pyramid model has the sales people at the very top with higher ranking managers being fewer as one goes down the inverted pyramid. This is how the pyramid looks like:

This model allowed for the steady improvement of sales performance as the years went by. This system provided for incentives for sales personnel to undertake etxtra and dedicated techniques to increases sales. This made the store manager to mentor and train successful sales personnel in their stores. This led to increased sales and revenue for Nordstrom in general.

Question 4

Prior to the turnaround strategy implemented by JWN, Nordstrom had been experiencing a series of problems that threatened the company’s performance across the boards. The company was recording mixed results in different geographical locations due to one main reason, Management.

The management of Nordstrom was rather loose ended with certain management functions not exerting any monitoring techniques for the different department stores. The overall management of Nordstrom had let the stores to operate and run free without any measures to check standards and performance.

Question 5

Marketing

Inconsistent Same Store Sales: this was where prices varied in different stores within the same geographical location. This represented the lack of communication in the sales departments of these given stores that resulted in each store setting its own price. This led to customers taking their business elsewhere as the inconsistencies drove clients away.

Merchandizing

Questionable Appeal on Merchandizing: here the stores started to employ different merchandizing techniques and models. This led to inconsistencies and disparities in stores within a given geographical location.

Finance

Little to No Financial Control: the different stores in different geographical locations were not under any form of financial control, leading to the department stores being able to formulate and forge their own financial records. These loopholes led to the misappropriation of company revenue, leading to the erratic results posted across different geographic locations.

Purchase

Low Volume Buyers: this is where vendors would have to conduct transaction with low volume buyers for the different department stores. This frustrated the vendors as they opted to deal with a single large volume buyer for the whole company.

Question 6

Nordstrom’s competitive advantage in the retail industry today is the merchandizing. Nordstrom has managed to create a unique brand that helps them to push for the merchandizing policies. The company has managed to target the upscale customer by opening stores across the United Sates in potent location that allow the company to make increasing sales and stay at the top as one of the leading chain stores in fashion products and commodities.

Question 7

The company is currently performing well with the management making well informed decisions as compared to the 1995 management team. Nordstrom acquired HauteLook in February 2011. HauteLook is an online retailer that usually offers flash sales for purely designer goods. Tis has allowed the company to employ new and modern sales techniques that incorporate the online buyer, thus expanding its customer base.

In August that same year, the company opened Treasure & Bond in SoHo, New York. This store was more of a test store to see how the upscale department store market in New York would fair for the company. This was also a marketing technique as all the proceeds of the store would go to charity.

The company now seeks to expand to Canada, having already opened in 4 prime locations as the company looks to expand its horizons.