1. What is Nordstrom’s segmentation strategy? Who does it serve?

2. With regard to its core segment, what does Nordstrom offer its customers?

3. Using the Porter model, which generic business-level strategy is Nordstrom pursuing?

4. What actions taken at the functional level have enabled Nordstrom to successfully implement its strategy?

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?

6. Is Nordstrom organized for success?

 

 

Nordstrom is one of American's most success- ful fashion retailers. John Nordstrom, a Swedish immigrant, established the company in 1901 with a single shoe store in Seattle. From the very start, Nordstrom's approach to business was to provide exceptional customer service, selection, quality, and value. This approach remains Nordstrom's hall- mark today. The modern Nordstrom is a fashion specialty chain with 240 stores in 31 states. Nordstrom gener- ated almost $12.5 billion in sales in 2014 and makes consistently higher-than-average returns on invested capital. Its return on invested capital (ROIC) has consistently been in the mid teens to low 20s, and was 16.3% in 2014-strong performance for a retailer. Nordstrom is a niche company. It focuses on a relatively affluent customer base that is looking for affordable luxury. The stores, located in upscale areas, have expensive fittings and fixtures that convey an impression of luxury. The stores invite browsing. Touches such as live music played on a grand piano help create an appealing atmosphere. The merchandise is fashionable and of high quality. What truly differ- entiates Nordstrom from many of its rivals, however, is its legendary excellence in customer service. Nordstrom's salespeople are typically well groomed and dressed, polite and helpful, and known for their attention to detail. They are selected for their ability to interact with customers in a posi- tive way. During the interview process for new em- ployees, one of the most important questions asked of candidates is their definition of good customer service. Thank-you cards, home deliveries, personal appointments, and access to personal shoppers are the norm at Nordstrom. There is a no-questions- asked returns policy, with no receipt required. Nor- dstrom's philosophy is that the customer is always right. The company's salespeople are well compen- sated, with good benefits and commissions on sales