Nordstrom
Summary: Nordstrom is one of American’s most successful fashion retailers. From the very beginning, Nordstrom has been
focused on providing exceptional customer service, selection, quality, and value. It is a niche company. Nordstrom's salespeople
are generally well-dressed, polite, and helpful. Thank-you cards, home deliveries, personal appointments, and access to
personal shoppers are the norm at Nordstrom. Nordstrom’s philosophy is that the customer is always right. Nordstrom hasn't
neglected efficiency even though it emphasizes quality and luxury.
Lesson and future application: The customer has to be given utmost importance to run a successful business.
1. What is Nordstrom’s segmentation strategy? Who does it serve?
Answer: Nordstrom focuses on affluent consumers who desire fashionable high-quality merchandise. Nordstrom’s approach to
business was to provide exceptional customer service, selection, quality, and value. This approach is still the hallmark of
Nordstrom today.
Nordstrom is a niche company and focuses on a very specific group of customers. They chose to focuses on upper income
customer looking for affordable luxury. Nordstrom attempts to satisfy the desires of this customer segment not only through
merchandising, but also through excellence in customer service. Nordstrom has been successful in this market segment.
2. With regard to its core segment, what does Nordstrom offer its customers?
Answer: Nordstrom’s philosophy is that the customer is always right. Nordstrom’s offers outstanding customer service to its
customers, who appreciate things like home deliveries and thank you cards from Nordstrom employees, as well as Nordstrom’s
liberal return policies.
3. Using the Porter model, which generic business-level strategy is Nordstrom pursuing?
Answer: Nordstrom serves a niche market. The company follows a focused differentiation business model to attract and retain
high-end customers.
4. What actions taken at the functional level have enabled Nordstrom to successfully implement its strategy?
Answer: Nordstrom constantly emphasize the importance of customer service in order to build a companywide culture that
internalizes its key value. Nordstrom’s successful differentiation is due to its excellent customer service, which is an element of
customer responsiveness. Nordstrom pays close attention to recruiting and training salespeople who behave consistently with
Nordstrom’s customer service values.
5. What is the source of Nordstrom’s long-term, sustainable competitive advantage? What valuable and rare resources does
Nordstrom have that its rivals find difficult to imitate?
Answer: Nordstrom’s long-term, sustainable competitive advantage is their superior customer service.
Competitors find it difficult to imitate the quality of Nordstrom’s workforce, which is a valuable and rare resource. In addition,
Nordstrom’s “luxury” touches in stores, such as having a piano player in most of their locations, are also valuable and rare
resources, although they might be a little easier to duplicate than other Nordstrom resources.
6. Is Nordstrom organized for success?
Answer: Yes, Nordstrom is organized for success. Nordstrom is a niche company and one of the successful fashion retailers and
consistently makes higher-than-average returns on invested capital. Their unique shopping experience combines customer
satisfaction and the shopping environment. Nordstrom’s approach to business was to provide exceptional customer service,
selection, quality, and value. This approach is still the hallmark of Nordstrom today. Nordstrom’s philosophy is that the
customer is always right. They also committed to providing quality product and make sure their employees are well
compensated. This could lead to higher retention of qualified and knowledgeable salespeople. Despite its emphasis on quality
and luxury, Nordstrom has not taken its eye off operating efficiency. Finally, on top of these things, Management is constantly
looking for ways to improve efficiency and customer service that ensure Nordstrom's success.
