Introduction
The preparation of this memo has involved the input of vice president of governmental affairs at Nordstrom Inc. and is being addressed to Jack Harris who is the president of a consulting firm known as Crisis Consulting. The intention of the memo is to try to address the wage issue, especially minimum wage and hours currently faced by Nordstrom Inc. in its operations. In providing more information to Jack Harris and his consulting firm, this memo addresses a number of issues namely business profile, governmental action, organization and teams in the company, stakeholders and the current business environment of the company both financial and otherwise.
Business Profile
Nordstrom Inc. is involved in business operations as a specialty and retailer in matters of fashion in the United States. The sale of its products takes places with the assistance of various channels of distribution such as Nordstrom Rack off-price stores, Nordstrom full-line stores, Jeffrey boutiques and Last Chance clearance stores. The presence and geographical reach of Nordstrom Inc. involves more than 340 full-line stores as well as rack store distributed across more than forty states of the United States. Additionally, other Nordstrom full-line stores are present in other places such as Canada. Nordstrom Inc. occupies an industry and market that are characterized by highly competitive environments considering the rapid changes in consumer expectations and the growing introduction of new players into the market. Nordstrom Inc. is one of the leading companies in the industry due to its exceptional service delivery to its customers coupled with a product offering that is broad to the extent of reaching targeted customers from various regions (Spector and McCarthy, 2010).
Delegate your assignment to our experts and they will do the rest.
The market in which Nordstrom Inc. is currently operating contains a number of opportunities as well as threats for the company. The opportunities available for this company include new markets and global markets that have been able to come up owing to the expansion experienced in its industry and sector. Moreover, there are opportunities for Nordstrom Inc. to introduce new products considering the current trend of emerging products being able to attract a significant number of consumers and customers. The company could also increase its sales by a significant margin if it reconsiders its earlier decision and begins to carry out marketing operations aimed at reaching out to minority as well as middle-class groups. When it comes to threats, the operations of this company are considerably threated by the existence of instances competition within the market from its strong competitors such as Macy's Inc. and Kohl's Corp among others. Further, the ever-increasing interest rates occasioned by bad economy and turbulent economic times pose another threat to the existence and growth of Nordstrom Incorporated. In terms of businesses market share and competitors, Nordstrom Inc. enjoys the largest market share (Porter, 2017; Meadows, 2013).
As such, it has been able to report an increase in its total revenue in the second quarter of the year of the previous year by 3.80%. On the other hand, its major competitors experienced a reduction of about 1.2 % in their total revenue. In addition, with a net margin of about 2.9 %, Nordstrom Inc. has been able to achieve a significantly higher profitability in comparison to its main competitors. Nordstrom's credit division accounts for about 2% and takes care of the ownership of Nordstrom Inc., which is a federal savings bank. The operation of the credit division enables it to offer Nordstrom VISA cards that are co-branded, credit cards with private labels and debit cards meant for carrying out Nordstrom purchases. These cards also involve a loyalty program carried by the company with the objective of rewarding shoppers according to the levels of spending. The full-line stores at are responsible for generating slightly more than half of the company’s net sales. The contribution to net sales made by Rack store is represented by approximately 25%. Other channels that make significant contributions to the company’s net sales include Nordstrom.com, which accounts for 15% as well as a combination of Haut look and others accounting for about 5%. Considering products, women's apparel assist the company in generating more than 30% of the net sales it obtains. The rest is generated from a combination men's apparel, kid’s apparel, cosmetics and other items (Pasiuk and Vault, 2005).
Governmental Action
Actions from the government as well as political decisions are highly likely to affect the operation and performance of Nordstrom Inc. in its current situation characterized by issues of minimum wages and working hours. Some of the challenges that may result from governmental actions include the risks associated with regulatory and legal actions. The operation of Nordstrom Inc. remains subject to certain regulatory decisions, litigation, and laws as incorporated in policy formulation by the government. The policies, practices, and procedures that are normally implemented by Nordstrom Inc. are designed and expected to be in full compliance with the laws and requirements put forward by state, federal and local government. Additionally, there are certain regulatory agencies such foreign countries and the banking industry that are likely to impose certain regulations and rules in the industry that are also likely to influence the issues of minimum wages and workers hours that are currently being faced by Nordstrom Inc. (Palepu and Healy, 2013).
In this regard, significant changes in legislation include the ones related to matters of employment of the workforces among others such as general welfare of workers. Some of these governmental regulations would increase the expenses for the operation of Nordstrom Inc. thus lowering their revenues considering they will be operating in adverse legal and financial environments. Furthermore, failure by the company to comply with the required regulations and laws or failure to implement social, environmental and business requirements as set out by various government authorities could subject it to various risks. Such risks may include high fines imposed on regulatory incompliance, facing lawsuits, facing civil or criminal liability, settling high legal costs and disruption of business as well as damaging the reputation of the company. The overall outcome of operating in adverse conditions occasioned by unfavorable governmental actions or political decisions will include loss of customers, low morale of the workforce, high costs associated with employing or maintain the workforce and increased cost of business operation among others. Further, the company may be forced to deal with increased tax liabilities thus reducing its net income (Meadows, 2013).
Organization and Teams
The organization of the company involves a vertical structure where Nordstrom Inc. has major executives, members of the board and project teams led by key executive committee members. In responding to previous government regulations, the board of directors and the executive staff members of this organization have been on the forefront by raising various concerns on matters affecting the company. Furthermore, the various project teams at Nordstrom Inc. have been actively involved in ensuring that the operations and the activities of the company are able to meet the goals and objectives of its stakeholders. Nordstrom Inc. is organized in such a way that its corporate offices are situated in Seattle, Washington, and its distribution centers are present in Dubuque, Iowa; Newark, California; Gainesville, Florida; Portland, Oregon; Ontario, California and Upper Marlboro, Maryland. The direct order center of the company operates from the Nordstrom Credit, Inc. and Cedar Rapids (Wood, 2008).
In the past, this company has regarded government regulations with a great sense of importance urgency. As such, the members of the board of directors have been charged with the responsibility of overseeing and advising the company on the appropriate and important matters that require deliberations by government officials and the regulatory authorities. On the other hand, the team of management at Nordstrom Inc. has been more concerned with overseeing the daily operations and activities of the company and ensuring that they remain in compliance with government regulations and requirements. Moreover, the organization of the company is such that it operates under two divisions namely credit and retail. The retail division is responsible for bring in a vast majority of the revenue collected by the company accounting to about 98% and that includes sales from nordstromrack.com, Nordstrom.com, Nordstrom Rack stores, Jeffrey, Hautelook.com and Canadian operation as well as all its full-line store (Spector and McCarthy, 2010).
Stakeholders
Nordstrom Inc.’s internal stakeholders comprise the management as well as the subordinate and non-subordinate staff. These internal stakeholders play critical role in determining and sustain the daily operation of the company as well as influencing various levels of engagements between Nordstrom Inc. and different external stakeholders. The internal stakeholders led by the management have been very active and instrumental in formulating and advancing business’s interests of Nordstrom Inc. in a manner that has led to the realization of numerous business opportunities both at the national and international levels. The external stakeholders are majorly comprised of the community members, customers, shareholders, investors as well as various business partners and government agencies among others. As a way of influencing the political process, the external stakeholders have several engagements with government representative as well as government authorities to deliberate on how different political process are likely to affect or influence the company’s operations (Porter, 2017).
They have also been able to take part in the organization of sales with aim of empowering various sections of members of the community. Such actions have played a crucial role in promoting the company’s brand among a wider section of members of the society at the local, national and international levels. Moreover, the actions of both internal and internal stakeholders at Nordstrom Inc. in relation to advocating for the business’s interests and influencing political processes have resonated well with customers’ expectations thus providing an enabling environment for business to thrive. In addition, the commitment by the internal and external stakeholders at Nordstrom Inc. to the mission and vision of the company has significantly contributed to the realization of strong relationships among the management, employees, community members and investors for the benefit of all of them. On the other hand, Nordstrom Inc. has been able to do an incredible work in offering excellent services to all its stakeholders thus broadening its customer base. The role of different stakeholders in influencing political decisions and advocating for business interests of the company at Nordstrom Inc. have been made effective by the fact that the company respects and considers their various opinions and contributions (Spector and McCarthy, 2010).
Current Environment
The current financial environment at Nordstrom Inc. is characterized by a largely positive performance, which is demonstrated by a huge increase with regard to net sales. However, the company has also experienced a sharp decline with regard to net income and this is attributable to various investments and expansions recently undertaken by the company as well as new acquisitions and new technologies. Further, there has been a steady increase in company’s administrative, general and selling expenses as well as its cost of sales. The other aspect of the current environment for Nordstrom Inc. includes the current market situation characterized by competitive forces. This kind of environment has resulted from the consolidation of a number of retail stores such as Macy’s and Foleys as well as changes that have taken place among consumers and vendors. In this regard, some of the competitors of Nordstrom Inc. have managed to broaden their customer base thus giving them some advantages over Nordstrom Inc. with regard to the market share (Spector and McCarthy, 2010).
Nonetheless, Nordstrom Inc. has been in a good position to respond effectively and in a timely manner to such market changes in its current environment. It is expected that the company will continue responding in the same manner as long as the current environment continues to prevail. Otherwise, they might be faced with the risk of losing most of their customers to their strongest competitors and hence experience a considerable decline in their net sales and profitability. The current internal environment at Nordstrom Inc. is also characterized by an ongoing development of the technology system. This development is meant to strengthen customer service delivery and ensure that the company remains on top of its competitors in terms of its operations and activities as well as its overall performance (Palepu and Healy, 2013).
Conclusion
In conclusion, it is worth noting that the memo has tried as much as possible to highlight and address some of company issues and details that are critical for consideration by Crisis Consulting. It is highly expected that Jack Harris and his consulting firm will find the above-provided information useful in advising Nordstrom Inc. with regard to the minimum wage and hours that it is currently facing. Nordstrom Inc. looks forward to an efficient and fruitful engagement with Crisis Consulting on the issues raised in this memo for consultation.
References
Meadows, J. G. (2013). Nordstrom, Inc: A strategic analysis . Jaral G Meadows.
Palepu, K. G., & Healy, P. M. (2013). Business analysis & valuation: Using financial statements . Mason, OH, USA: South-Western, Cengage Learning
Pasiuk, L., & Vault (Firm). (2005). Vault guide to the top retail employers . New York: Vault Inc.
Porter, G. A. (2017). Using financial accounting information: The alternative to debits and credits . Cengage Learning.
Spector, R., & McCarthy, P. D. (2010). The Nordstrom Way: The inside story of America's Ä1 customer service company . New York: John Wiley.
Stempel, J. W., & Knutsen, E. S. (2016). Stempel and Knutsen on insurance coverage . New York: Wolters Kluwer
Wood, R. (2008). Into the value zone: Gaining and sustaining competitive advantage . Lanham: University Press of America.
