business homework

1.) Executive summary

2.) Situation Analysis

a. The company

i. Perception in the market

ii. Product line

iii. Company culture

iv. Technology

b. Customers

i. Market share

ii. Product information

iii. Consumer needs and gaps

iv. Consumers purchasing process

c. Competition

i. Pricing by competitors

ii. Alternative products

iii. Potential threats from direct competitors

iv. Market share

d. Business climate

i. Market liberalization

ii. Government policies and regulation

iii. Technological advancement

iv. Economic issues

v. Society’s culture

3.) Problem Analysis and description

a. SWOT Analysis

i. Strengths

ii. Weaknesses

iii. Opportunities

iv. Threats

b. Market dynamics

i. Increasing competitive market share

ii. Gaps in market regulations

iii. How to build company image

c. Costs reduction

i. How to reduce operational costs

ii. Production costs

iii. Marketing and distribution costs

4.) Solutions, evaluation and recommendations

a. Capitalization on competitive advantage

i. Leveraging on strengths and opportunities

ii. Improving on weaknesses

iii. Threats mitigation strategies

b. Market expansion strategies

i. Customer promotion

ii. Product redesign

iii. Competitive pricing

c. Cost cutting strategies

i. Waste reduction strategies

ii. Company downsizing

iii. Elimination of unnecessary cost overheads

5.) Implementation plan and success metrics

a. Implementation team

i. Work documentation and procedures

ii. Communications of reports and reviews

iii. Staff training

b. Performance review

i. Market size review

ii. Customer perception

iii. Cost reduction and effectiveness

iv. Product review and performance in the market

c. Overall company performance review

References

Appendix

Executive Summary

Nordstrom is a

Nordstrom

Situation Analysis

Assignment Overview

Nordstrom started out as a shoe store. The first store opened in 1901 in Seattle Washington and was named “Wallin & Nordstrom” after the owners, Carl Wallin and John W. Nordstrom. They opened a second store in 1923. The shoe store expanded its product offering in the 1960s and by the end of that decade, Nordstrom had expanded into the store we know today. In 1971 the company went public and formerly changed its name to Nordstrom Inc. Today, Nordstrom is a nation-wide specialty fashion chain that has a reputation of having superior customer service, the finest product selection and excellent relationships with all of their employees. Their corporate philosophy has been the same since 1901: “offer the customer the best possible service, selection, quality and value.” (site) This philosophy has enabled Nordstrom to create a CRS program that effectively serves the community their consumers and employees live and work in. (Company History)

Business Strategy

Rivalry - Nordstrom's rivals are Bloomingdales, Macy's, Dillard's, Saks Fifth Ave, and Neiman Marcus.

Threat of New Entrants - Threats of new entrants is low. Many specialty retail stores have working relationships with their suppliers. Nordstrom also carries exclusive products made by Facconable. It would be hard for new entrants to gain licensing for exclusive products.

Threat of Substitute Products - Outlet malls and stores that sell "off-brand" items are threats. Buying directly from a designer, instead of Nordstrom, is also a threat of substitute products.

Bargaining Powers of Buyers - Power of Buyers is moderate because of brand image, and buyers are willing to pay what the price is set at for high-end products. As a convenience to its customer and to stay in competition, Nordstrom price matches with other retailers.

Bargaining Power of Suppliers - Power of Suppliers is moderate because there are limited specialty retail stores. Department stores also need to carry certain brands. This gives the suppliers bargaining power for their products to sell at a reasonable price.

Mission, Brand Declaration, Values

Mission

"At Nordstrom, our goal is to provide outstanding service every day, one customer at a time."

Brand Declaration

"We Work hard to make decisions in the best interest of our customers and those serving them."

Values

Nordstrom provides further guidance to its employees about how to achieve the Nordstrom mission in a practical way every day with a clear description of the Nordstrom culture and what Nordstrom values

Corporate Citizenship

Since Nordstrom’s financial success depends on consumers purchasing products from their stores, Nordstrom appreciates the importance of establishing trust and loyalty with its customers and employees. In 2007 the company created a “multi-divisional group of leaders to come up with a comprehensive social responsibility strategy.” (Nordstrom Cares) After talking to employees and customers, Nordstrom decided to concentrate on four areas: community, the environment, protecting human rights and caring for our people. (Nordstrom Cares) Nordstrom hopes to further develop relationships with consumers and set a global model for other companies to follow.

Stakeholders

Employees: In 2011, Nordstrom's average worker earned more than $19 per hour, nearly 60% higher than the industry average.

Shareholders: members of the Nordstrom family still own between 20% and 25% of the company's shares, even at a market cap of more than $11 billion.

Performance

The following graph compares the cumulative total return of Nordstrom common stock, Standard & Poor’s Retail Index (“S&P Retail”) and Standard & Poor’s 500 Index (“S&P 500”) for each of the last five fiscal years, ending January 30, 2016. The Retail Index is composed of 31 retail companies, including Nordstrom, representing an industry group of the S&P 500. The following graph assumes an initial investment of $100 each in Nordstrom common stock, the S&P Retail and the S&P 500 on January 29, 2011 and assumes reinvestment of dividends on the Nordstrom common stock as well as the S&P Retail and S&P 500 Indexes.

SWOT Analysis

Strengths

1. Nearly 120 Full-Line stores and 110 Nordstrom Racks 2. Revenue performance is strong and has a good market reputation among customers 3. 52,000+ employees 4. Operates in Clothing, footwear, bedding, furniture, jewelry, beauty products, cafe, and House Ware category

5. Offers free shipment options to customers which adds experience and value

Weaknesses

1.Presence in other continents is very low 2. Presence of many similar stores means market share is stagnant

Primary Competitors

Nordstrom has notable competitors in the retail industry that offer high fashion in a similar department store format. Other retailers specializing in high-end fashion include Saks, Neiman Marcus, and Bloomingdale’s INC. From this chart, I can see that Nordstrom earn more net income than Neiman Marcus, even Neiman Marcus negative growth. Compare revenue with Neiman Marcus and Bloomingdale’s INC, Nordstrom are most higher than other company.

Industries

Nordstrom is a comprehensive shopping center; it operates clothes, shoes, watches, and bags.

Industry Outlook

The rate depends upon the type of borrowing incurred, plus in each case an applicable margin. This applicable margin varies depending upon the credit ratings assigned to Nordstrom long-term unsecured debt. At the time of this report, Nordstrom long-term unsecured debt ratings; outlook and resulting applicable margin were as follows:

Should the ratings assigned to Nordstrom long-term unsecured debt improve, the applicable margin associated with any such borrowings may decrease, resulting in a slightly lower borrowing cost under this facility. Should the ratings assigned to Nordstrom long-term unsecured debt worsen, the applicable margin associated with Nordstrom’s borrowings may increase, resulting in a slightly higher borrowing cost under this facility.

External Factors Influencing Performance

The environmental factors noted could have far reaching effects on the marketing operations of Nordstrom’s stores. The financial policies adopted in the current U.S political government to control for prevent re-occurrence of the banking crisis could for instance have far reaching effects on the entity’s federal savings bank (Nordstrom, INC, 2009a). The outcome of such legislation could have the potential curtailing the entity’s sales since it was through the bank that the company offered its “private label card…visa cards and debit cards for its purchases” (Nordstrom, INC, 2009, p. 29). Further massive regulatory policies that have been instituted, and the possibility of close scrutiny by many agencies charged with this regulation could also increase the cost of compliance for the company thus affecting its revenue (Nordstrom, INC, 2009, p. 29).