January 10th, 2018
Marketing case study|Nordstrom stores
Analysis of both the internal and external markets is important in development of appropriate marketing and expansion (growth) strategies. The internal environment comprises the strengths and weaknesses that are a characteristic of the organization. Identification of these strengths and weaknesses enables the organization to exploit opportunities and mitigate threats presented by the external environment. A number of external environmental factors such as the political, legal, technological and economical factors in a given market would also influence the success of an entity. In this paper the external environment of Nordstrom stores is evaluated. The marketing environmental factors and their impact on the entity will be evaluated. Recommendations on how best the organization can respond to each factor and on a promotional strategy to enter the Mexican market will be advised. Finally recommendations on the distribution channels that can be best used to access the Mexican market will be made.
Marketing environmental factors affecting Nordstrom stores
Various environmental factors would influence the success of Nordstrom stores. Such includes political, economic, socio-cultural, technological, legal and competitive environmental (PESTLE) factors. Political factors for instance include policies adopted by the government in respect to financial services and those governing registration of subsidiaries. Further differences in political policies between different regions (states) and countries could curtail the application of a synchronized marketing strategy in these regions thus adding on to the marketing cost.
Economic situation is also a significant determinant of the company’s performance. Adverse economic times would for instance curtail the amount of expenditure by various customers. Further economic situation bears a direct relationship with fluctuations in foreign exchange thus influencing the purchase price from cross boarder suppliers. Such could increase the cost of goods sold thus fueling price increment that may harm the stores’ market share. Further economic environment influences the availability of credit for expansion purposes which is vital for the stores’ expansion out of saturated markets.
Socio-cultural factors influencing Nordstrom’s business would be those that lead to the dynamic nature of fashion trends. Lifestyle changes would thus affect the business of the stores if the company was not able to identify and align to such changing tastes. Further the social trends influence the seasons (Christmas, Valentines and New Year celebrations) that are associated with varying sales levels.
Technological aspects also influence the performance of Nordstrom stores. Technological aspects that specifically address marketing and sales activities and those that ensure the security and privacy of customers, employees and the entity’s data are core to the company growth. In marketing technological advancements would for instance influence on-line shopping whereas the security of customers’ credit card data could prove vital in sustaining consumer loyalty. The adoption of technology also may be delayed on the basis of feasibility analysis thus costing the company in terms of clientele.
Existing legislation also could have an influence on the stores progress. Of note the laws governing the Exchange of securities as represented by both the Securities and Exchange Commission and New York Stock Exchange rules and the banking and foreign countries’ legislation would influence the company’s performance. Other legal matters that would influence the company’s performance include employment (labor) laws governing hiring and dismissal of employees and the working environment.
The competitive environment for Nordstrom’s business is also a dynamic aspect that could influence the company’s performance. For instance the competition could enter into partnerships with distributors which could affect the company’s market share. The strategic location of competitors could also influence the company’s performance in some markets. Further competitors with manufacturing affiliates could have a competitive advantage in respect to manufacturing costs and timely supply which might prove important in securing the market share.