Nordstrom SWOT Analysis the Intent Research Proposal

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Here are the recommendations for Nordstrom:

Concentrate information systems spending on pricing analysis and execution. Clearly from the financial statements Nordstrom needs more control over pricing. The inclusion of ProfitLogic for pricing optimization is one alternative for example, to better harvest demand at the optical price point.

Go after the $300+ denim market globally more aggressively and with more concerted strategies today. In their latest financials and in their latest earnings calls, Nordstrom reports that even they are even surprised by the number of $300+ jeans being sold. As Nordstrom has a stable $100+ range of denim, the company needs to consider building out a strategy of bringing in a new designer to add more flair to the jeans.

Focus on multi-channel management to ensure all customers have an identical high-quality experience with each Nordstrom touch point. The many channels that Nordstrom sells through including the Web, their stores, discount stores and boutiques makes for a challenging strategy of unifying responses across all channels. Nordstrom needs to focus on preserving their culture in these channels and actually promoting it.

Continued expansion plans yet focus on sales per square foot of $400 or more. The trending on this specific metric is critical if the company is to continue growing profitably and with a maximizing of their retail floor space. In 2007, sales per square foot were $365, high for the last twenty years, much far above the low of $319 per square foot in 2001.

Summary

Nordstrom is an excellent example of a company that has turned their culture into a strong competitive advantage and differentiator (Antonacopoulou, Kandampully, 2000).

Nordstrom's culture reinforces a much stricter set of norms and values than any manager could impart or enforce; that's because the employees tell each other they are different than any other retailer in that they focus on doing what in their good judgment will assist the customer best (Spector, McCarthy, 2001). While the company has challenges with growth in the future, their key metrics of performance, customer loyalty, customer lifetime value, and sales per square foot continue increasing due to the prudent and insightful use of pricing, supply chain, and product information quickly.

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Appendix a Fiscal Year-based Financial Analysis

Nordstrom Inc. Ratio Analysis

Profitability Ratios

Return on Equity (%)

Return on Assets (%)

Return on Investment

Gross Margin

EBITDA of Revenue (%)

Operating Margin (%)

Pre-Tax Margin

Net Profit Margin (%)

Effective Tax Rate (%)

Liquidity Indicators

Quick Ratio

Current Ratio

Working Capital/Total Assets

Debt Management

Current Liabilities/Equity

Total Debt to Equity

Long-Term Debt to Assets

Asset Management

Revenues/Total Assets

Revenues/Working Capital

Interest Coverage

Source: Mergent Online

Nordstrom Annual Income Statement Analysis

Net sales

Cost of sales

Gross profit

Selling, general & administrative expenses

Finance charges & other (income) expenses, ne

Gain on sale of Faconnable

Operating income (loss)

Earnings before interest & income taxes

Interest expense - short-term debt

Interest expense - long-term debt

Total interest expense

Less: interest income

Less: capitalized interest

Interest income (expense), net

Other income including finance charges, net

Earnings (loss) before income taxes

Current federal income tax expense (benefit)

Current state & local income tax expense

Total current income tax expense

Deferred income tax expense

Deferred federal income tax expense

Deferred state & local income tax expense

Total deferred income tax expense

Income tax expense

Earnings (loss) before accounting change

Net earnings (loss)

Source: Mergent Online

Appendix B:

Complete SWOT Analysis

Strengths

First, the company's robust growth is quantified in their revenues' compounded annual growth rate of 30% between 2004 and 2008, with revenues growing from $334M to $1.2B. These revenue gains are attributable to the concentrated focus on women's and children's clothing and the build-out of low-cost stores in middle income areas of the country. In addition to these product and distribution strategies, Nordstrom has increased their investments in analytical software and sales techniques to increase same-store sales. Due to this strategy of combining analytics software and sales training focusing on cross-sell and up-sell strategies, there has been a steady increase in sales in the Nordstrom Rack chain over the last four years.

At the center of Nordstrom's success is their ability to create a culture that focuses on enhancing the lifetime value of the customer by delivering exceptional service and an attitude to do.....

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