Nordstrom has come a long way since its humble beginnings as a shoe retailer in the early part of the 20th century. Now with the 4th generation of Nordstroms at the helm, it has positioned itself for the future with its customer-centric focus and rich history of entrepreneurial spirit. This analysis will focus on the transformation of their core operations and the potential for future strategic movement in the world of retail sales.
Corporate strategic and organizational practices From the early stages as a wholly owned family business, Nordstrom was characterized by its ability to provide the highest quality and largest selection of products at very competitive prices. One of the most distinctive corporate traits that helped guide
While the second generation of Nordstroms unselfishly spent their relatively modest salaries expanding the business, when they were ready to retire, the next generation did not have sufficient capital to purchase the business outright. So rather than let their fathers sell the company to a competitor, the decision was made to take the company public. The result was that for the first time in the history of the company, there was not a Nordstrom in control of the organization.
In addition, the breadth of the organization grew too large to continue their "Nordstrom in every store" policy. The executive's informal and casual presence on the store floor was a significant motivator for the sales force that made them feel like part of the Nordstrom family. Due to this style of management the company became very much decentralized. The management had come to rely too much on established processes – a "cookie-cutter way of doing things" – rather than thinking innovatively. They eventually started replicating the habits of their competitors, giving consumers no particular reason to visit Nordstrom. There was no longer any differentiation to set them apart.
Another key factor was the extensive communication breakdown between the buyers and the sales associates. Nordstrom had always solved their problems through the "front line" approach and a "within the