Case Analysis: Nordstrom
Primary Issue:
After years of struggling with high debt, unorganized internal processes, and increasingly negative feedback from customers, Nordstrom initiated a drastic overhaul of both its image and internal business processes that resulted in the company returning to a position of financial strength and popularity. The company is now in a secure position with an excess of cash on-hand, and must decide how to move forward. Nordstrom’s president, Blake Nordstrom, must decide on the best way to proceed with managing the company’s cash flow and utilizing excess cash.
Associated Issues: * The Board of Directors is pushing for Nordstrom to pay out dividends and initiate a share repurchase plan in order to utilize idle cash. * The Executive Team is uncertain how to proceed with further expansion; they must decide if the company should expand internationally, reach out to small town domestic customers, etc. * Nordstrom is also considering expanding their offerings to include household goods and other services. * Department stores are declining in popularity, as more shoppers are turning to online retailers and are seeking exclusivity, rather than mass-marketed department store offerings.

Issue Analysis:
Though it seems intuitive that any extra cash generated from the company’s profits should be paid out to the shareholders, Nordstrom has the option to take advantage of its positive ratings and strong position in the market and reinvest that cash in the company. Competition in the retail industry is high, and though the company has found its niche and is currently popular among its target consumers, it must keep pushing forward and keep on top of industry trends in order to maintain its favorable position.
Because of the significant planning time and capital investment required, expansion into new geographic areas must be carefully considered. The company is primarily located in more urban areas, and has the option to expand into small town America. Though this would enable Nordstrom to reach more customers, they would be placing themselves in direct competition with more affordable department stores that likely appeal more to middle class Americans. This demographic is not especially fashion-forward, and Nordstrom could have trouble generating the necessary revenue to keep the store profitable. International expansion is potentially a better option, though extensive market research would need to be conducted to determine whether the business environment in the chosen country is favorable, and if there is a niche in the market that could be filled by Nordstrom’s offerings. Canada is the logical first choice, due to its geographic proximity.
After years of trouble forming Nordstrom’s brand identity – fluctuating between a stuffy image that did not appeal to younger markets, and a high-fashion image that turned off long-term older customers – the company has finally found