To:
From:
Date:
Subject: Nordstrom Inc. UK Expansion
The fundamental reason for writing this memo is for requesting funding for the expansion of Nordstrom Inc. UK. In this regard, the funding will assist in the achievement of efforts that would ensure that the organization becomes more profitable. The funds will enhance the daily activities that involve serving more clients globally. This firm is committed to the provision of good quality products that are inclusive of shoes and clothing for adults and children in a considerable number of countries (Patterson, 2009). The company has experienced successful growth in the areas that it is operating in, which is a provision that has led to the increment of its profits. For this reason, it would be essential to consider putting up more stores in the Canadian market to take advantage of the opportunity that the market presents. Additionally, the increasing growth in internet access in the various markets that the firm operates has led to the increment of its sales since customers prefer using the company’s website due to the convenience that it offers.
It would be possible to determine that the industry in which the company operates has a positive economic history. However, some of the competitors that are inclusive of Dillard’s Inc. significantly threaten the company. The competitors receive their products from major fashion suppliers, which is a provision that enables them to make huge profits. According to Stock, Speh and Shear (2006) , their relation with Nordstrom Inc. enables them to make the significant profits. Based on this provision, Nordstrom Inc. requires funding to expand in different regions that are inclusive of Canada since there is an opportunity to open large fashion stores needed to sell the different clothing products as well as shoes. Canada is considered as a market that has a huge potential because of a number of reasons. For instance, the growing population in the market presents a huge market for the company’s products, which means that it will be possible to achieve the desired profits.
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Nordstrom also uses the internet to market or sell its products. From the company’s website, customers can purchase merchandise. The online platform also serves as an outlet that the company can use to clear merchandise from its stores as well as other retail channels. This platform ensures that the company remains competitive and realizes profits. The online stores will assist in filling the gap brought about by the negative trends that characterize sales volumes in the full-line stores (Reuters, 2017). All the company’s full-line stores, all of which have positive cash flow, is an indication that the firm is doing well financially. For this reason, the additional funding will be invested in the Canadian market to improve the firm’s profits.
On the other hand, it would be essential to consider the competition available in the new market, which is insignificant. For this reason, it would be possible for Nordstrom to increase sales, consequently making it easy for the company to achieve the desired profits. In this case, since the company offers a wide variety of products (Nordstrom, 2017), the customers will consider the quality and the standard prices offered to ensure that they attract more customers to purchase the offered products. Additionally, since Canada exhibits growth in technology, it will be possible to incorporate online advertisement, which is one of the ways through which the company can attract more people to purchase its products (Healy & Palepu, 2012). Using online advertisement is one way through which the company can attract a significant number of customers.
Finally, since the funding will assist in the expansion of a considerable number of stores, it would be essential to tap into the new opportunities presented by the Canadian market. It would be a timely decision since few corporations have discovered the Canadian market, which is a provision that would be advantageous since there is the possibility of attracting more customers. Additionally, the discovery is timely since the competition from other companies in the industry will be minimal, consequently ensuring that the firm will be more popular. For this reason, taking advantage of the expansion opportunity presented by the new market will be fundamental since it will ensure the increment of the company’s profits.
References
Healy, P. M., & Palepu, K. G. (2012). Business Analysis Valuation: Using Financial Statement . Cengage Learning.
Levine-Weinberg, A. (2016). This is what Nordstrom needs to do to succeed in Canada . Business Insider . Retrieved 7 July 2017, from http://www.businessinsider.com/nordstrom-toronto-canada-target-2016-9?IR=T
Nordstrom. (2017). About Nordstrom . Nordstrom . Retrieved 16 July 2017, from http://shop.nordstrom.com/c/about-us
Patterson, M. C. (2009). The impact of e-commerce on traditional retailers: case study: Nordstrom: an honors thesis (HONRS 499).
Reuters. (2017). Nordstrom on conf call- FY forecast assumes continuation of negative trends in full-line stores offset by upsize online growth . Reuters . Retrieved 17 July 2017, from https://www.reuters.com/finance/stocks/JWN/key-developments/article/3534551
Stock, J., Speh, T., & Shear, H. (2006). Managing product returns for competitive advantage. MIT Sloan Management Review , 48 (1), 57.
