Nordstom, Inc. Business Analysis Camille Joublin BA 301 Final Term Paper Section 006 May 28, 2023 Table of Contents Executive Summary 3 Situation Analysis 4 Internal Performance 4 Industry Perspective 7 Problem Analysis & Description 8 Solutions, Evaluation, & Recommendation 11 Reference 15 Executive Summary Nordstrom, Inc. is a large company in the fashion and retail industry. Through the department, off-price, and online stores, Nordstrom offers everything from luxury to discounted fashion selections. The purpose of this report is to analyze this company and its business practices in order to discover business problems harming the company and offer potential solutions. After looking at the company as a whole, the …show more content…
primarily operates in the department store industry. “Department stores retail a broad range of general merchandise, such as apparel, jewelry, cosmetics, home furnishings, general household products, toys, appliances, and sporting goods. Discount department stores, which are also included in this industry, retail similar lines of goods at low prices” (Lee, 2022). This definition encompasses Nordstrom and Nordstrom Rack, which are critical players in this market. Due to external competition, the number of department store establishments is declining. As a result, profit is projected to stay low as consumer demand decreases and department stores continue to discount its prices. The department store industry is expected to continue struggling throughout the next five years (Lee, 2022). The key external drivers of the industry are the percentage of business conducted online, e-commerce sales, per capita disposable income, and number of households. Some of Nordstrom’s largest competitors include Target Corporation, Macy’s Inc., and J.C. Penny Company Inc., of which Nordstrom has the smallest market share of 5%. In contrast, Target makes up the most considerable portion, with 67.7% (Lee, 2022). When looking at and comparing Nordstrom’s largest competitors, some common trends include thin margins, minimal growth, and high debt levels. In this highly competitive industry, price competition is key, as this reflects the entire industry, not just Nodstrom’s competitors …show more content…
These criteria represent the main areas that will help improve Nordstrom’s revenue problem and the company's other current issues. The requirements also correlate with the potential solutions, as each solution should help fix Nordstrom’s main issues. This way, the solution with the highest weight should benefit the most, as it will satisfy the company’s needs. As consumer demand appears to be a prominent, notable cause of Nordstrom’s business problems, addressing this issue strategically is of utmost importance to keep up with the industry. The next highest priority is increasing sales, which will also reflect an increase in demand and majorly help the company’s poor revenue performance. Increasing customer satisfaction and experience will also help drive traffic and bring in more sales. Lastly, managing inventory effectively and ending each quarter with low inventory levels will reflect a positive change in Nordstrom’s business operations and predictions of consumer interest. The weighted decision matrix shows that data analysis solves Nordstrom’s revenue problems best. It helps solve the most significant underlying causes of the bigger issue and will help address what the other potential solutions would fix as well. For example, data analysis could be used to improve consumer online shopping