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Transcript of Nordstrom
The Brutal Facts
Strengths: Nordstrom’s strengths are extremely well matched to the industry key success factors. Many stores try to provide their customers with good customer service. Nordstrom definitely exceeds their customer service goals
Weaknesses: Nordstrom is considered a higher end store. There may be different price points, but for the most part, Nordstrom has many high-end items that are considered to be expensive. In result of higher prices, people will go to other stores to check prices and possibly buy the item if it is found cheaper somewhere else.
Opportunity: Nordstroms is the only one out of their competitors to have a branch in Europe. This takes the fact of web-site translation so the products could be sold world wide.
Threat:We believe all stores “threaten” each other in some way or form. When one store has a sale, the other store may try to have their own sale or some kind of event to attract customers. However, in the retail industry, there must be competition in order to survive.
What are you deeply passionate about:
Nordstrom is passionate about customer service and providing them an outstanding service
What can you be the best in the world at:
Nordstrom can be the best in the world at selling designer clothes at a reasonable and fair price.
What drives your economic engine
: Nordstrom's economic engine is driven by providing designer clothes to people who may not have enough money to buy designer clothes at other retail stores.
Flywheel and Breakthrough
Good, Great, or In Trouble
Nordstrom is a Great company
5 Competitive Forces
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 conveinence to it's 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.
Level 5 Leader:
John W. Nordstrom
Came to New York from Sweden at age 16
Determined to succeed
Worked in mines of Alaska for two years
Made $13,000 and traveled to Seattle to invest
The Right People:
Friend of John's from Alaska mines
Together they opened a small downtown shoe store in Seattle called Wallin & Nordstrom
John's business approach: provide exceptional service, selection, quality and value
Shoe store became largest in the country
They opened 8 more in Washington and Oregon
Wallin & Nordstrom became largest independent shoe chain in the U.S.
Level 5 Leader
The right people on the bus
Buildup to Breakthrough
Nordstrom's flywheel has been strong enough for a breakthrough
1901 Started as a small shoe store
1963 Added women's clothing with the purchase of Best Apparel
1966 Men's and childrens clothes added
1971 Company went public in and formally renamed Nordstrom, Inc.
Two years later the company's annual sales surpassed $100 million
Continued to acquire partnerships
2000-07 Nordsrtom owned Façonnable
2005 Purchased Jeffry, two luxury fashion boutiques in Atlanta and New York City's Meatpacking District
2011 Acquired Los Angeles-bases HauteLook
2012 Nordsrtom invested in Bonobos, a menswear brand
Nordstrom and technology
Offers 24-hour-a-day shopping access at Nordstrom.com since 1988
Free shipping and returns
Mobile shopping apps: on-the-spot item location and register-free transactions
Nordstrom has put their entire experience in the hands of the customer; giving them numerous ways to share it, Tweet it, Pin it and make it their own
They have stuck with their consistent philosophy by John W. Nordstrom: offer the customer the best possible service, selection, quality and value
They started as a small shoe company and slowly added more and more departments instead of all at once
Each generation has built on the work of previous generations
Today Nordstrom is on their fourth generation of the Nordstrom family
In 2011 the company achieved an all-time record for total net sales at $10.5 billion
Year over year, Nordstrom Inc. has been able to grow revenues from $9.3B to $10.5B. Most impressively, the company has been able to reduce the percentage of sales devoted to cost of goods sold from 66.27% to 64.98%. This was a driver that led to a bottom line growth from $613.0M to $683.0M.
Mission and Vission
We continue to cherish our shared experiences, celebrate our achievements and appreciate one another — just like family.
Use good judgment.
We trust each other’s integrity and ability.
We want you to take the initiative, and we'll support your efforts to deliver exceptional service.
Setting goals matters.
At Nordstrom, you can determine your own success and make a real difference by accomplishing the goals you set.
It's your business.
Our employees have a personal, financial and professional stake in the success of our company.
Healthy competition is good.
We love to win.
We value open, honest and respectful communication.
We value people who drive results, and we regularly recognize outstanding performance — whether you're serving customers or supporting those who do.
Be a good neighbor.
Our company and our employees support hundreds of community organizations through contributions, outreach programs, special events and volunteering their time.
We work hard to offer great service to each and every customer and we believe great service begins with showing courtesy to everyone, customers and coworkers alike.
If you're passionate about fashion, this is the place for you.
Our door is always open.
It's important to us that every person who works here feels valued, welcome and cared for."
History of Nordstom...
In 1887, 16-year-old John W. Nordstrom came to New York City from Sweden with $5 in his pocket. He traveled to Alaska to work in the mines, where he met a man named Carl Wallin, who owned a shoe repair shop in Seattle. Nordstrom then moved back to Seattle and in 1901, Nordstrom and Wallin named Wallin & Nordstrom. Eventually, both partners sold their share to Nordstrom's sons.
Nordstrom is already one of the nation's leading, top department stores. Nordstrom employees send thank you cards, offer free drinks to customers, welcome everyone-customers and co-workers, presents products with knowledge, and ALWAYS goes above and beyond!
A few thoughts for improvement....
-Coupons (i.e. during sales or a customer's birthday)
-A few more different price points