January 10th, 2018
Marketing case study|Nordstrom stores – Impact of environmental factors on Nordstrom’s stores’ marketing strategy
The environmental factors noted could have far reaching effects on the marketing operations of Nordstrom’s stores. The financial policies adopted in the current U.S political government to control for prevent re-occurrence of the banking crisis could for instance have far reaching effects on the entity’s federal savings bank (Nordstrom, INC, 2009a). The outcome of such legislation could have the potential curtailing the entity’s sales since it was through the bank that the company offered its “private label card…visa cards and debit cards for its purchases” (Nordstrom, INC, 2009, p. 29). Further massive regulatory policies that have been instituted, and the possibility of close scrutiny by many agencies charged with this regulation could also increase the cost of compliance for the company thus affecting its revenue (Nordstrom, INC, 2009, p. 29).
Most economic factors noted also have a great impact on Nordstrom’s line of business. The prevailing economic environment for instance affects the ease of credit acquisition and its cost thus could delay the entry of the organization into a given market when such is funded via this funding mode. Economic status of the population also influences the amount that these are willing to spend on such products as apparel items which the company trades in. In cross boarder trade the entity would also be affected by the foreign exchange rates prevailing which could further be influenced by both the economic situation and the government instituted measures to correct trade imbalances. The loss in value of the domestic currency would for instance lead to the company spending more on items procured from the external markets thus increasing the cost of goods sold and reducing the profit margins if selling prices are not altered.
Socio-cultural factors are also important mediators of Nordstrom’s business. Such factors for instance determine the fashion trends that lead to a boom in sales of the items in fashion while making those that are not obsolete. Failure to identify and align to such socio-cultural trends is adequate to drive the entity out of business. Socio-cultural aspects would also include religious affiliations that account for different seasons throughout the year hence different sales levels in different months. By identifying the changing values in the society the company could structure its marketing strategies to conform to these changes.
Technological factors affecting marketing of the firm’s business are also worth of note. The availability of information in the internet on alternative solutions to customer needs could impact on the market share Nordstrom enjoys. Technology could also help create a customer network that would be used to evaluate customer loyalty and offer rewards to motivate customer behavior. Adverse effects of technology however would arise as regarding the safety and privacy of information which when disclosed has the potential of destroying the firm’s reputation.
Other important factors to Nordstrom’s success would be the legal issues affecting various aspects of its business. Employment laws that vary according to state for instance would influence human resource hiring. Laws that relate to wages and working hours as well as those dealing with discrimination could bear substantial implications for the company. Failing to comply with some of these could result into costly court cases in terms of both monetary expenditure and time wastage. Such cases have the potential of plummeting the entity’s perception among customers to levels that are harmful to business performance. Other laws dealing with stock market operations also could prevent the organization from raising funds for expansion through such channels.
Various elements of the competitive environment also influence business performance. Strategic partnerships between competitors and vendors could for instance minimize the market share that the entity enjoys (Nordstrom, INC, 2009b). Such partnerships would lead to strong distribution channels that could overwhelm the company’s sales stores already in place. Further competitive environment factors such as the company’s alignment with suppliers and developers could impact on the timing of entry in different markets. Delays in developer mediated store expansions would for instance lead to delays in market entry which could have been planned for a boom season (Nordstrom, INC, 2009b). These then would impact on the expected returns when such stores are eventually opened.