Nordstrom – College Essay Example
Nordstrom – College Essay Example

Nordstrom – College Essay Example

Available Only on StudyHippo
  • Pages: 9 (2393 words)
  • Published: May 29, 2017
  • Type: Case Study
View Entire Sample
Text preview

Established in 1901 by Swedish immigrant Mr. John W. Nordstrom, Nordstrom initially operated as a small shoe store located in downtown Seattle. Despite arriving in the United States as a teenager with minimal funds and no understanding of the English language, Nordstrom gradually expanded to become an internationally recognized fashion specialty chain renowned for its commitment to delivering exceptional customer service. Presently, Nordstrom comprises two primary divisions: Retail and Credit.

Nordstrom, a retailer in the Retail sector, operates a total of 242 stores across 31 states. These include 117 full-line stores, 121 Nordstrom Racks offering discounted items, two Jeffery Boutiques, treasure & bond store, and one clearance store. Alongside its physical stores, Nordstrom.com is rapidly growing as an online business. The company is dedicated to providing customers with convenient and enjoyable shopping experiences through these diverse retail channels. They offer a

...

wide range of high-quality brand name and private label products that focus on clothing, shoes, accessories, cosmetics, and various services.

The Credit segment of Nordstrom consists of a federal saving bank, as well as two Nordstrom VISA cards and a debit card. Its purpose is to enhance customer connections through a loyalty program centered around shopping, which aims to boost customer visits and spending. Additionally, the Credit segment generates revenue for the company through financial charges and fees associated with the Retail segment.

This essay will analyze various aspects of Nordstrom as a company and provide a recommendation. These aspects include the company's mission and goals, organization structure with an emphasis on team utilization, business environment, change management, organizational culture and ethical values, management training, and leadership styles.

Nordstrom's vision, mission, and goals center around delivering exceptional service

View entire sample
Join StudyHippo to see entire essay

to customers on a daily basis. The company was founded by Mr. Nordstrom with a business strategy focused on prioritizing excellent selection, quality, and value for customers.

Nordstrom has stayed true to its mission for over a century, prioritizing customer service and creating an exceptional experience in this competitive industry. They focus on price, value, fashion, quality, selection, convenience, technology, product fulfillment, service, and store location. The culture at Nordstrom revolves around dedicated and enthusiastic employees. With about 61,000 employees working full-time or part-time due to seasonal demands of the business (with increased employee count during July and December for Anniversary Sales and holidays), Nordstrom believes in maintaining a diverse workforce - consisting of 42% people of color and 72% women. The company's structure is represented by an Inverted Pyramid model where customers are at the top followed by salespeople and supporting staff ensuring customer satisfaction. This hierarchical setup aligns with the company's core values while providing support to those directly engaging with customers.

Nordstrom, a prominent fashion retailer in the United States, is committed to serving their customers' best interests. They operate primarily in the U.S. retail industry and are subject to various factors analyzed through PEST analysis (political, economic, sociocultural, and technological). With a total of 234 stores including 113 Nordstrom Rack locations across the U.S., Nordstrom is influenced by U.S. commerce policies and laws. Although they don't have international physical stores currently, Nordstrom has managed to reach customers in 44 different countries through their online store (Nordstrom, 2013).

Nordstrom's expansion strategy suggests that it is going international. However, barriers in different countries may hinder its expansion. For example, in 2014, Nordstrom will enter the Canadian

retailing industry, potentially impacting flagship stores such as HBC, Holt Renfrew, Harry Rosen, and Sears (National Post’s Financial Post ; FP Investing, 2013). Nevertheless, Nordstrom faces other challenges in its Canadian market expansion. The instability of the Canadian dollar indirectly affects Nordstrom's expectations.

When assigning employees from the United States to Canada, Nordstrom may face challenges due to Canadian immigration and labor laws. The Great Recession, which began in late 2007, had a significant impact on the US economy and is still in the process of recovering. According to World Bank statistics (2013), the GDP growth rate of the US was -0.4% in 2008, -3.5% in 2009, and 3.0% in 2010. Although there was some growth in 2010, the US economy did not reach its pre-recession level of 2007; however, the population continued to increase during this period.

According to Heidi Shierholz, an economist at the Economic Policy Institute, there is a need for 8.6 million more jobs in the economy compared to its current state. This is because there are 2.6 million fewer jobs since the recession occurred (USCB, 2013). In 2011, the median household income in the United States was $50,054. However, this amount decreased by 1.5% in real terms when compared to the median income in 2010 and by 8.1% when compared to the median income in 2007 (the year before the most recent recession). Furthermore, it is also 8.9% lower than the highest recorded peak of median household income in 1999 at $54,932 (Carmen DeNavas-Walt et al., 2012). It should be noted that socioculturally speaking, the United States is a Multilanguage country.

The United States has four main language groups: Spanish, other Indo-European languages,

Asian and Pacific Island languages, and all other languages. According to the United States Census Bureau data from May 1st, 2013, the population of the country was 315,773,955. In every eight seconds, a new birth occurs; in every twelve seconds, a death occurs; and in every forty-four seconds, an international migrant arrives. Approximately 24% of the population is under 18 years old while around 36.5% falls within the age group of 18 to 44 years. Another approximately26% belongs to the age group of45 to64 years.And finally,theagegroupofover65yearsaccounts forapproximately13%ofthepopulation.

California and Texas are the two largest states in terms of population in the United States, with about 60% of the country's people living in the southwest. The majority of the U.S. population, making up 72.4% of the total, consists of Whites, including both White non-Hispanic or Latino individuals and White Hispanic or Latino individuals. Other racial groups in the country include Black or African American, American Indian or Alaska Native, Asian, and Native Hawaiian or Other Pacific Islander (USCB, 2013). The social class structure in the United States is described as a rhombus.

The United States has a hierarchical class structure based on income. The upper class, which makes up 1% of the population, receives about 5% of the income and has a household income of $1 million or more. Next is the upper middle class, comprising 15% of the population and typically earning over $100,000 per household. The lower class represents 20% of the population and usually holds low-paying jobs. The working class accounts for 30%, making it the second largest group. Lastly, the lower middle class consists mainly of white-collar workers and is the largest group at

34%. Their household income generally ranges from $50,000 to $100,000 (USCB, 2013).

The retail industry heavily relies on the purchasing and selling process, where retailers buy from manufacturers and sell to consumers. A widely used system for this purpose is the Sophisticated Point of Sales (POS) system, which allows retailers to track purchase history and units sold. Additionally, understanding customer preferences is crucial in retail due to the significance of customer service. It's important to mention that by 2012, there were over 2.4 billion internet users globally, accounting for more than one-third of the global population.

The popularity and convenience of online shopping have increased in recent years, allowing individuals to easily purchase various products with just a few clicks. Nordstrom, which started its online business in 1993, is an example of this trend. Electronic Data Interchange (EDI) is extensively used in e-commerce for transferring data between computer systems or networks. Both online shopping and EDI have wide application within the retail industry and other IT systems across the entire retail sector.

All major high-tech companies like IBM, Dell, and Microsoft are entering the development of organizational use systems. No one system can be considered superior; instead, each organization should choose the system that suits them best.

Among all industries, the retailing industry is seen as the most competitive. The United States Department of Commerce reports that sales from over 3.6 million retail establishments in the United States reached approximately $2.5 trillion in 2011. Additionally, retailers in the United States employed over 42 million people.

Despite expectations of increased sales in 2012, spending in the apparel retail industry has consistently declined each quarter since Q3 of 2008. The same store

sales data for 2009 revealed that consumers were opting for more affordable items, despite some signs of improvement in 2010. As previously mentioned, the combination of high unemployment rates and reduced discretionary spending suggests that a downward trend is likely to persist within the apparel retail sector.

Bloomingdales, Lord & Taylor, Neiman Marcus, and Saks Fifth Avenue are all competitors of Nordstrom. However, Nordstrom stands out with its exceptional customer service, giving it a competitive advantage in the department store industry. In 2012, Nordstrom unveiled its expansion strategy into Canada to counter the challenging economic conditions and formidable rivals in the United States. As part of this initiative, Nordstrom will launch four stores in Calgary, Ottawa, Toronto, and Vancouver from autumn 2014 onwards.

Colliers International Consulting reports that Canadian malls saw a nearly 50% rise in sales per square foot in 2011, surpassing American malls. This noteworthy sales growth has the potential to attract American retailers such as Nordstrom. Nevertheless, expanding into a foreign country comes with its own obstacles. As Blake Nordstrom, president of Nordstrom, highlights, proximity and language similarity alone do not ensure success. It is crucial to consider that Canada has two main languages: English and French.

The Canadian dollar is weaker than the American dollar and Canada's population is only one-tenth that of the United States, resulting in higher costs in Canada compared to America. Moreover, Colliers' director of retail consulting states that Canada has a more conservative financing and development industry, making it difficult to obtain capital for retail and shopping center development. Additionally, Nordstrom, an apparel retailer, would encounter difficulties meeting the unique demands of both Canadian and American customers. It

is important to mention that Canada is classified as a Frigid Zone country.

Costco, which began operating in Canada in 1985, is a prime example of this approach. In Canada, Costco stores start offering children's snowsuits as early as July and have seen successful sales of skiwear and snowshoes. Following suit, Nordstrom is taking over three former Sears Canada locations. According to Blake Nordstrom, Nordstrom stores in Canada will establish unique distribution arrangements for the brands they currently carry. When it comes to cultural and ethical values and practices, Nordstrom's business vision can be summarized as "leave it better than you found it." The company takes pride in prioritizing the satisfaction of both customers and employees.

The significance of organizational culture in driving a company's success cannot be emphasized enough, as it benefits both customers and employees. Nordstrom highlights that their culture extends beyond providing outstanding customer service; they aim to create an ethical business environment that attracts skilled employees. This culture is formed by a combination of shared values and norms that shape individuals' perceptions, interactions, and problem-solving methods.

According to Chatman and Cha (2003), culture is essentially about execution and a successful culture is connected to business strategy. Nordstrom emphasizes that employees hold themselves accountable by setting goals, showing progress, and acknowledging achievements and opportunities in order to ensure effective execution of the strategy. Dolan and Lingham (2011) emphasize the significance of culture in managing organizational-wide change.

Creating a strong culture is a result of employees acting on their belief in doing the right thing. In developing a comprehensive plan, feedback from both employees and customers holds great importance for the Nordstrom Company. Their main priorities focus

on supporting communities, preserving the environment, safeguarding human rights, and taking care of their employees. Nordstrom Company demonstrates its commitment to diverse communities by giving back to those who have supported them.

Nordstrom has a variety of programs that focus on different communities. The main areas they prioritize are the Nordstrom Scholarship Program, United Way, Global Social Development, and Supplier Diversity. The Nordstrom Scholarship Program aims to recognize students nationwide for their academic achievements and community involvement. Each year, Nordstrom awards $10,000 scholarships to 80 students (Nordstrom). In addition to this program, Nordstrom has been a longstanding supporter of United Way. They have donated over 9.3 million dollars to United Way campaigns across the country since 2012 (Nordstrom).

The Nordstrom Company has made efforts to increase sustainability and eliminate environmental impact in several areas. These areas include resource conservation, recycling and waste management, and packaging and product innovations. To reduce energy consumption, Nordstrom has implemented heating and cooling systems along with technologies, resulting in a 4.1% reduction in per-square-foot-energy (Nordstrom). Additionally, Nordstrom has placed recycling bins in their locations, allowing the recycling of aluminum, cardboard, plastic, and glass.

Nordstrom prioritizes environmentally friendly packaging and uses recycled materials. The company places great emphasis on safeguarding human rights, valuing the workers involved in producing Nordstrom-label products. Training programs are offered to suppliers on the subjects of the Code of Conduct, social responsibility, and productivity and efficiency. Regular audits are conducted to closely monitor supplier operations and ensure compliance with guidelines.

Nordstrom collaborates with other companies to improve factory workers' welfare and safety, thus enhancing conditions in factories. The company's primary emphasis is on prioritizing employee care as part of

their social responsibility and acknowledging them as the most valuable resource. Nordstrom firmly believes that every employee has the opportunity to achieve their full potential and positively contribute to the company's success. Driven by a strong dedication to providing exceptional customer service, Nordstrom enables its staff to use sound judgment when assisting customers.

According to Chatman and Cha (2003), it is essential to take risks and go beyond the call of duty in order to satisfy customers. Simply adhering strictly to formal rules and policies will not lead to exceptional service, innovation, or quality. To fully accomplish strategic goals, employees must be empowered to break free from these rules. This empowerment is closely linked to fostering a strong organizational culture where individuals are willing to take risks and exceed expectations because they believe it is the right approach. Commitment to achieving objectives is crucial for successfully executing strategy.

At Nordstrom, the formation and maintenance of a strong culture are achieved when employees share values and demonstrate a high level of passion for these values. The company fosters collaboration with its employees, enabling their valuable ideas to drive positive change and contribute to overall success. Despite frequent organizational changes, a strong culture can triumph over them. The crucial factor in achieving success lies in aligning employees' personal values with the mission and values of the company.

Get an explanation on any task
Get unstuck with the help of our AI assistant in seconds
New