Nordstrom Dissension in the Ranks

In: Business and Management

Submitted By tiagomecarvalho
Words 813
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Nordstrom is an example of business success, work force efficiency and is still a family owned company with a highly present founder vision: providing the best possible service to costumers. This case focuses on the relation with its salespeople (“Nordies”), which are one of the company’s greatest assets.

The rivalry and competition within the industry is heavy and there are many retailers struggling for the same goal – increase the volume of sales, but on the other hand it is easy to differentiate from competitors by the costumer’s service for example. The bargaining power of suppliers is not very high as these big chains usually buy in large quantities and benefit from quantity discounts between others. The buyer’s power is low as these retailers have a strong brand recognition, product differentiation and above all costumer service differentiation. The threat of new entrants is high as no costumer will stick to the same brand or chain if there is another one that provides a much better service, despite the existence of economies of scale and cost advantages for the existing players. The threat of substitutes is high as other products can outperform Nordstrom products (e.g. a tennis shoe from Nike can substitute a shoe from Nordstrom).

The key success factors of this department store retail industry are: the costumer’s service, variety of products, price and constant innovation, and being always flexible and willing to change. Nordstrom strengths are their strong brand name as well as their good reputation and a fantastic relationship with customers, wide range of products and their high turnover, and also a large market segment, but especially their staff management and productivity. Customer service was Nordstrom’s strongest competitive advantage and consequently a major source of its financial success as it is said in the case. One of their main problems…...

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