...Harvard Business School 9-191-002 Rev. October 15, 1999 Nordstrom: Dissension in the Ranks? (A) The first time Nordstrom sales clerk Lori Lucas came to one of the many “mandatory” Saturday morning department meetings and saw the sign—”Do Not Punch the Clock”—she assumed the managers were telling the truth when they said the clock was temporarily out of order. But as weeks went by, she discovered that on subsequent Saturdays the clock was always “broken” or the time cards were not accessible. When she and several colleagues hand-wrote the hours on their time cards, they discovered that their manager whited-out the hours and accused them of not being “team players.” Commenting on the variety of tasks that implicitly had to be performed after hours, Ms. Lucas said, “You couldn’t complain, because then your manager would schedule you for the bad hours, your sales per hour would fall, and next thing you know, you’re out the door.”1 Patty Bemis, who joined Nordstrom as a sales clerk in 1981 and quit eight years later, told a similar story: Nordstrom recruiters came to me. I was working at The Broadway as Estee Lauder’s counter manager and they said they had heard I had wonderful sales figures. We’d all heard Nordstrom was the place to work. They told me how I would double my wages. They painted a great picture and I fell right into it. . . The managers were these little tin gods, always grilling you about your sales. . . . You felt like your job was constantly...
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...Nordstrom, Inc. Comprehensive Overview Davenport University BUSN520 Management and Marketing Professor Philip Shaps Shyla Allers August 12, 2015 Table of Contents Introduction 3 Organization, subsidiaries and business units, history 4-5 Scope of the business and current products or services provided 5-6 Scope of market distribution-are they local, regional, global 7 Leadership and management structure and individuals 7 Current issues that may affect the future of the organization 7-8 Description of Strengths 8-9 Description of Weaknesses 9-10 Description of Opportunities 10 Description of Threats 10-11 Description of External Factors Impacting Decisions 11 Description of Possible future scenarios 12 Recommendations for changes in culture, leadership and/or structure 12 Description of project company’s primary market 12-13 Description of project company’s secondary market 13-14 Description of one target group and demographic profile 14-15 Description of project company’s market position 15-16 Recommendations for leadership and organizational structure 16-17 Recommendations for placement 18-19 Conclusion 19-21 References 22-23 Appendix A 24 Introduction/Overview Nordstrom, Inc. is an upscale fashion retail company that approaches a broad variety of fashion clothing, shoes, accessories and cosmetics. It started out...
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...Nordstrom “Fashion changes. Shopping changes. Our commitment to happy customers doesn't.” Nordstrom today is currently operated by a fourth generation of the Nordstrom family, an executive team, and a talented team of innovators and fashion leaders. Nordstrom has grown from a small downtown Seattle shoe store into a nationwide fashion specialty chain. It offers a tremendous selection of shoes, accessories and an extensive range of services to make shopping a fun, efficient and convenient process. In 2011, the company was recorded as achieving an all-time record for total net sales at $10.5 billion. In 2014, Nordstrom “serves customers in 38 states with 118 full-line stores in the United States and one in Canada, 167 Nordstrom Rack locations. We also serve customers online in 96 countries through Nordstrom.com” (Nordstrom Website). This company clearly has shown their business philosophy to provide exceptional service, selection, quality and value has lasted over time. Nordstrom’s organizational structure is set up a little different than most companies. Individually, each employee must excel to reach their personal selling goal on a daily basis. This is important because each group, or department an individual works in, must also reach their selling numbers to prosper as an organizational or company level. Nordstrom uses an inverted social structure. Since Nordstrom prospers on their ability to sell to their customers, selling employees are at the top of their pyramid...
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...Demographic Segment * Population The percentage of urban residents was increased from 54% in 1941 to 81% in 2011. The most popular cities are Toronto, Vancouver and Montreal. Montreal and Vancouver accounted for 35% of Canada’s population. Since more and more Canadians move from rural areas to urban areas, department store retailers can reach more customers if they open their stores in urban areas. * Age Structure Canada is facing population aging. In 2014, the median age of male Canadians was 40.4 years old and the median age of female Canadians was 42.9 years old. Moreover, it is reported by the latest population projections, the proportion of Canadian aged 65 years old and older will increase to 20.1% of Canada’s population in July, 2024. According to Sotheby’s International Realty, the average household income of baby boomers is from $300,000 to $500,000. After a lifetime hard work, they want to enjoy upper class lifestyles. Thus, baby boomers have the ability and motivation to purchase high-end brands. * Geographic Distribution In 2013, 86.2% of Canadians lived in Ontario, Quebec, British Columbia, and Alberta. In 2015, there were 13,792,100 Canadians who lived in Ontario. Quebec had the second largest population size in 2015 at 8,263,600. British Columbia had the population size at 4,683,100 in 2015 and Albert had the population size at 4,196,500 in 2015. People live in Ontario, Quebec, British Columbia, Alberta play a large part of the Canada’s entire...
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...It all started with a man named John W. Nordstrom. I n1887, a 16 year old boy from Sweden left his home country for New York City, with only five dollars in his pocket, and not speaking a word of English. John crossed the United States working to make ends meet, and after two years he earned 13,000 dollars, and was ready to go into a partnership with a man named Carl Wallin. In 1901 the two opened their very own shoe sore, Wallin & Nordstrom, in downtown Seattle. John’s business philosophy was based on exceptional service, selection, quality and value, which ended up becoming a retail legend, also allowing them to build a customer base, and open their second store in 1923. In 1928, John Nordstrom sold his share of the company to his sons, and in 1933 Carl retired and sold his shares to the Nordstrom brothers. Nordstrom’s began building their reputation becoming the largest independent show chain in the U.S. In 1960, the company expanded offering customers shoes and fine apparel, called Nordstrom Best. Then in 1966, they offered men’s clothing and children’s wear. The company went public in 1971 just after the sales passed $100 million mark, and the company was recognized as the largest volume West Coast fashion specialty store. This same year, the name was changed to Nordstrom, Inc. Nordstrom’s today focuses on catering to customer’s needs, and individuality. They do not categorize their merchandise by departments, but by individual’s lifestyles. Nordstrom’s now...
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...customers of Nordstrom, not leaving out certain groups because of industry ‘norms’. This speaks volumes to all customers that Nordstrom recognizes them as individuals, but also, as O’Connell mentioned in an interview, “people with disabilities represent a significant marketing opportunity with $225 billion in discretionary income… and companies that understand this will have a competitive advantage.” (http://www.santacruzsentinel.com/business/ci_26254983/models-disabilities-star-nordstrom-catalog) * Has a customer first attitude to differentiate Nordstrom from other high-end retailers and department stores and build customer loyalty. They are in a highly competitive market involving high fashion, quality items at a premium price, but their service is what drives their business in. They invest in high quality staff, greet customers by name, write personal thank you notes, make follow up calls about satisfaction with products, have large well lit stores and fitting rooms, have a price match system, as well as a very lenient no questions return policy, all combined to keep their customers as satisfied as they can. (http://wwwiebe.com/nordstrom-customer-service-first/) * Nordstrom has different brands and product lines to reach different market segments and keep up with trends. These include: Rack, Haute Look, Treasure & Bond, and Trunk Club. This offers mid price markets opportunities to join with regular high price markets, online exclusive shoppers to join the Nordstrom network...
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...singular coin has marked the online collective consciousness and “pennyhunters” boast of a ludicrous following on social media. We’re not talking about cheap crap either. $200 designer shoes for a penny! Ding! A Rag & Bone sweater that retails for $350 for a penny? Ding, ding! A Dyson vacuum for $0.01 cents? Ding, ding, ding! Toys, clothes, shoes, jewelry, appliances, home goods -- the list goes on to infinity and perhaps even further. You the customer- you WIN. You just beat the system! And with the addictive seduction, the rush of adrenaline once you hit one of these penny unicorns, you will be a penny crackhead in no time, I guarantee it. The first time it happened to me, I found a pair of brand new shoes that retailed for under $50 at Nordstrom Rack. It was...
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...Nordstrom Market Selection 1.) I feel Nordstrom’s is opening more Nordstrom Rack stores, as they trying to target customers who are middle class and may not have a very strong cash flow. They may be customers that would shop at Nordstrom and spend money on the name brands in the store, but they do not have the money so they shop at the Rack. This may help move customers to shopping Nordstrom’s, if their financial situation improves. I feel with the economy in the past 10 years there are thriftier shoppers and the majority of people are probably middle class or lower. These people are able to afford items at the Rack and save money. I personally will go into Nordstrom to check out the more specialty items and to be shocked to look at the clothing prices. However, I am more likely to buy clothes from the Rack, but I still find some of the Rack prices to be high. 2.) It appears Nordstrom’s market expansion strategy is producing positive results. The annual sales have increased, however profit seemed to decline. That may be expected when putting money into expanding stores and opening in new territories. For a while I feel business may have to lose a little money to before the profits start coming in. By now the profits may have already started in as the research is from 2011. It appears inventory is turning over and more discounted stores are opening. Also they did open more stores from 2008 to 2011. This may have helped them to get in better business districts...
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...Paper Communications 530 Aug-Monday 12th, 2013 Organizational Behavior and Communication Paper Nordstrom Inc., started as a small shoe store in Seattle, Washington in 1901. Since that time it has become one of the leading and successful shoe and apparel retailers in operation today. After reviewing different information regarding Nordstrom Inc. espoused values and enacted values, it is apparent that they are in alignment. Espoused values are the core values of the company. The history and organizational beliefs, developed into policy for the company. The goal of the espoused values is to create standard of behavior for the company. The enacted values are norms exhibited by employees (Answers, 2013). If the espoused and enacted values are misaligned problems could occur within the organization. If the Nordstrom leadership does not live up to the espoused values of the organization, the employees become disassociated and will not work to their potential. Nordstrom Inc. has a strong communication and organizational behavior characteristic of the brand. A generation family business, Nordstrom has grown the company into 240 stores, in 31 states with 11 full line stores, 119 Nordstrom Racks, two Jeffery Boutiques, and Treasure & Bond. This paper will review Nordstrom’s mission and organizational behavior and the communication used in their continued success. Nordstrom does not have a mission however they do have a goal. Their number one goal is: to provide outstanding service...
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...MGT/230 October 8, 2012 Organizational Structure Nordstrom Incorporated has a history that dates back to 1901, when John W. Nordstrom and Carl Wallin joined forces and opened the first Wallin & Nordstrom, Inc. They opened their first shoe store in downtown Seattle, Washington, and found that they needed to look for new and innovative ways for their company’s growth. They ventured into the clothing market and started selling fine apparel and added men’s clothing and children’s wear to expand the needs of their customers. In 1971 they went public, and the company was recognized as the largest-volume West Coast fashion specialty store, and the company name was formally changed to Nordstrom, Inc. From the beginning, John Nordstrom shared a business philosophy that was exceptional service, selection, quality, and value. Today the philosophy remains the same (“Nordstrom.com,” n.d.). The vertical structure is very apparent in the Nordstrom, Inc. organization. The company has key executives, board members, and executive key committees that run the organization. According to Bateman & Snell, (2011), corporate governance is a role of the corporation’s executive staff and board of directors in ensuring that the organizations activities meet the goals of the stakeholders. The board of directors’ selects, advises, and oversees management and is responsible for the day-to-day operations of the company. Although Nordstrom, Inc. is a vertical organization, its structure is quite...
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...Executive Summary Introduction History of Nordstrom, Inc. NAICS: 448140 SIC: 5651 Ticker: JWN Current Stock Price: 62.45 In 1887, 16-year old John W. Nordstrom emigrated from Sweden with the promise of New York City, five dollars and not a word of English to his name. The first couple of years were hard for John but he made a living working in mines and logging camps while crossing the country to reach Washington State. One morning in 1897, he picked up a newspaper with the headline “Gold Found in the Klondike in Alaska”; he immediately made the decision to pick up and leave for Alaska and bought his ticket the next day. Even though things were not easy, John worked and within two years, earned $13,000 from a gold-mine stake. John returned to Seattle ready to invest his money. He reunited with Carl Wallin, a friend he had met in Alaska who owned a shoe-repair shop in Seattle. In 1901, they opened Wallin & Nordstrom, a small shoe store located in downtown Seattle. This was the beginning of the Nordstrom, Inc. Company. From the start, John's approach to business was to provide exceptional service, selection, quality and value. The idea resonated with a devoted customer base, and in 1923 the partners added a second store. In 1928, John retired and sold his share of the company to his sons Everett and Elmer. Carl Wallin retired a year later and also sold his share to the Nordstrom sons. John's third son, Lloyd, joined the team in 1933. By 1960, the downtown Seattle shoe...
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...Nordstrom has been around for 113 years. Nordstrom has been able to stay in business because of its groundbreaking and future oriented development. They are not only targeting high-end luxury consumers, but they are also targeting consumers with more humble means. Nordstrom sells high-quality products such as jewelry, clothes, shoes, home décor, and cosmetics. Nordstrom Rack offers discounted products that were unsold at the main store. These two set of stores are major growth drivers for Nordstrom. Nordstrom has succeeded in positioning itself as a quality brand by making customer service the good they are really selling. They offer their consumers what they need with positive customer satisfaction. Nordstrom has taken the necessary steps to distinguish themselves from other retailers, such as Target. Nordstrom values customer satisfaction over all. Their full price online store is as attractive to consumers as walking into their well-designed stores. Customers are able to have free delivery and have the flexibility to return products to a store. When customers have the option of returning their purchase at a store, they then take a look at other things they can get with their exchange. At the Nordstrom stores, customers are greeted and assist customers immediately. Nordstrom also engages in customer research with personalized shopping companions that make suggestions to customers based on their preferences. Nordstrom attracts fashionable consumers by constantly updating their...
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...Founded by J.W. Nordstrom in 1880 as a small shoe store, by 1995 Nordstrom had become a giant retailer with net earnings of $203 million and over 35,000 employees. Nordstrom remains a family operation to date. The idea of the ‘Nordstrom Way’ - with strong commitment to the firm, emphasis on proactive service, no external hiring, and a decentralized management structure (e.g., Nordstrom has no CEO) - is central to their employee relations, and is seen as central to their success. Average compensation within the company is above industry average. Despite this, the company has encountered problems over the years with its employees, leading to high turnover rates and lawsuits. While some employees are very happy with the way company operates, others criticize Nordstrom for unjust labor practices. As the company continuous to expand, the labor-force becomes further divided on whether or not the working conditions and compensation systems are fair. Improvements that would increase employee job satisfaction and organizational commitment can be made on the basis of two basic issues: the company’s compensation system and management style. The following factors contribute to the two major problems described above, and must be dealt severally in order for them to be a positive outcome for firm. 1. Sales per Hour (SPH): double edged sword. SPH is a commission structure based on which the “employees receive either their commission percentage times their total sales for that...
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...In 1901 John W. Nordstrom opened the first Nordstrom store in Seattle Washington. His approach to business was to “provide exceptional service, selection quality and value.” Nordstrom went public in 1971 and became recognized as the largest-volume fashion specialty store on the West Coast. In 1973 a clearance version of the store called Nordstrom Rack was opened in Seattle as well and by 1975 the company had expanded to Alaska and later on in 1988 the first store on the East Coast was opened in Virginia. Nordstrom is in the services sector and in the apparel stores industry with about 73,500 full time employees, which specializes in apparel, shoes, cosmetics and accessories. It also owns and operates stores for shoes, accessories for men, women and children. The store has two segments that it operates through: Retail and Credit. The Retail segment includes full-line stores, off-price stores, clearance, and boutiques. Private label and brand name merchandise that is focused on shoes, cosmetics, accessories and apparel. Nordstrom’s Credit segments is the company’s wholly owned federal savings bank, called Nordstrom FSB in which is provides a private label credit card Nordstrom VISA debit cards and credit cards. As of June 2015, the company has more than 115 Nordstrom department stores, 125 off-price outlet stores in 38 states and in Canada. It also operates a pair of Jeffrey luxury boutiques, a “Last Chance” clearance store, and has recently acquired the online private...
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...Nordstrom Case Analysis The main issue identified by the case study is the harsh treatment of the employees by the management at Nordstrom. This included the usage of unfair SPH (sells per hour) metric and “off the clock” work encouragement to keep that metric high. The case provides polar view points among the employees - Pati, Lori & Cindy (-ve) vs. Bob, Doris and Tim (+ve). This polar view points to the difference in deriving motivation from the same situation. Lets take a look at the view points and see how different theories of motivation could have been applied to solve the dissension that employees felt. In analyzing the root of the problem we need to acknowledge that the concept of evaluating performance of sales personnel on the basis of SPH isn’t inherently evil. As a matter of fact, SPH metric implementation at Nordstrom had proven effective since its introduction, its high profit margins and customer satisfaction ratings speaks to that. As stated by Tim Snow in the study, it was a matter of pride to be working for a company where people loved to shop. But the SPH metric shouldn’t have been the only metric. Other KPI’s such as punctuality and customer satisfaction (CSAT’s) should also be weighted into the equation as performance standards. The lack of distinction between “sell” and “non-sell” hours also proved to be an issue. The employees “off the clock” hours were routinely treated as “sales” hours, thus effectively reducing their SPH ratio. This practice...
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