PESTEL Analysis of Nordstrom is a marketing strategy employed by the company to track the environment it is operating in. Whenever the company wants to venture into a new market environment, launch a new product or service, it also uses the analysis.
Nordstrom is a company a shoe company founded by John. W. Nordstrom and Carl Wallin, in downtown Seattle. It offers exceptional services based on its selection, quality and value. Over the years, the company has grown and extended its operations to different parts of the globe. Besides shoes, the company also sales men’s and children’s clothing in different markets.
For successful operations, the company employs a wide range of marketing strategies and it has entered strategic alliances with different companies including Upscale European Faconnable. In 2011, the company realized a record sale of $.10.5 billion and in 2012, it purchased Topshop and Topman, becoming the only retailer in the US to hold these great British brands. Currently, Nordstrom operates 261 stored across 35 states.
Despite its success, the company faces different environmental challenges as discussed in this PESTEL analysisof Nordstrom.
Nordstrom has many executives who hold top positions and holding a name that can become quite controversial. Additionally, the company is facing tight competition from other luxury brands including Niemen Marcus. This means that designers must always stick to their own ideas and avoid the temptation of having to copy the competition.
However, the most pressing political issues affecting the company are based on pricing. Nordstrom tends to charger higher prices for its products. This affects its operations and profitability bearing in mind that other competitors sell similar products, but at a relatively cheaper price.
For Nordstrom sales decrease when the economy takes a downfall. Over the past years, the economic environment in the shopping has suffered due to bad economy thus affecting sales volume of Nordstrom.
It is therefore in the best interest of the company to keep its customer’s incentives and lower the prices of its products to ensure they remain loyal even during bad economic times and it can be quite challenging.
The social idea or aspect of Nordstrom is very important to its success. The company explores its niche markets to focus more on clients that are willing to purchase luxury products. As a matter of fact, the trend has been that cultural and luxury retail stores are tailored for clients that are price insensitive and Nordstrom rack for clients who are price sensitive.
The aspect of technology is additionally an important factor for Nordstrom. This is attributed to the fact that it uses a website that is highly functional and clients can purchase products online. The company updates its website regularly and it keeps changing the design of its products. Therefore, technology will for a long time if not forever play a significant role in the success of the company (it is very crucial for its database and online purchases). It increases its brand visibility and sales volume.
Due to changing economic, external or ecological factors of the environment affect the way in which clients react to the demands they are facing. There are also EPA regulations affecting client purchases.
Nordstrom also has to maintain a sense of legality in its operations. It has to adhere to US labor and manufacturing regulations when dealing with its stakeholders and customers. This affects its profitability because it incurs costs as it tries to avoid issues that can affect its operations and reputation in general.
Carrying out PESTEL analysis of Nordstrom can be a complex task, but a very important exercise for the company. It enables the company to understand its framework and basic influences, therefore, being it a better position to maintain a strategic and organized business approach.
What’s more, company managers make the most of the analysis to create strategies that work best for the organization and make better decisions. Through PESTEL analysis, Nordstrom can also plan better and implement ideas and new innovations to the success of the organization.
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