Running head: NORDSTROM, INC. PROJECT
Topic: Nordstrom, Inc. project
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Nordstrom, Inc. Project
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Table of content:
Executive summary ....................................................................................................................................... 3
Investment Description................................................................................................................................. 4
Financing Resources...................................................................................................................................... 5
Investment timeframe .................................................................................................................................. 6
Expansion plan justification .......................................................................................................................... 7
Priorities ........................................................................................................................................................ 7
Microeconomic Environment ....................................................................................................................... 8
Comparative Advantage ............................................................................................................................... 8
Opportunities ................................................................................................................................................ 9
Reasoning for Expansion ............................................................................................................................... 9
Internal Risks ................................................................................................................................................. 9
Track Record Financial Performance .......................................................................................................... 10
Ethical Behavior .......................................................................................................................................... 10
Legal Behavior ............................................................................................................................................. 11
References: ................................................................................................................................................. 12
Nordstrom, Inc. Project
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Executive summary
Nordstrom, Inc. is an American based retail store that has continuously succeeded in
being fashion chain stores. The company that started their operations in 1901 after getting
founded by John W. Nordstrom from being a shoe retailer, but from time to time the company
expanded their product portfolio that included handbags, clothing, fragrance, cosmetics, and
accessories.
The firm runs at least 349 retail stores strategically located within forty states among
them being Canada and Puerto Rico that entails 215 Nordstrom Rack stores, 123 full-line stores,
two Jeffrey boutiques, five Trunk Club Clubhouses and two clearance stores. The firm offers
customers the same services through their website, apart from a separate sale site, HauteLook.
The corporation has prospects of business expansion that spans beyond its borders and
set business to new grounds, in what would get referred to as Nordstrom Rock off Sale Division.
The company obtained the loyalty of its consumers because they created an atmosphere that
made its buyer make proactive decisions depending on the available stock and pricing.
Spector and McCarthy, (2013) argued that Nordstrom, Inc. aims at opening its doors to
Indian consumers that would get integrated with their e-commerce website. Although, the
success of the company depends on the firm’s strategic alignment of its logistic plans, sale, and
marketing that target the consumers of within the market. Nordstrom, Inc. has for a long time
dwelt on the American market with little interest in the international market and similar
investments depends on the company’s ability to monitor the trends and the consumer demands
that exist in India.
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Years of continued research made Nordstrom, Inc. gain the confidence that they would
attract and handle the Indian consumers. Although the Canadian dollar fluctuates, the firm never
made losses since it entered the Canadian market. Nordstrom, Inc.’s investment in the global
market as that of India might become much of a problem because the Indian market has no
competitive market as that of America, and when it gets there, no other firms will match their
size and structure. However, the expansion plans would be nothing without the actual
implementation that requires funding from the start to the last bit. The study wants to research
on the capital requirement and the possible funding that would drive the business processes of
the intended expansion plan.
Investment Description
Drey, (2014) pointed that availing the goods to the Indian market comes at a time when
the company wants to increase the spread of their commodities to other parts of the globe.
Investing in the uprising markets like India would increase the presence of Nordstrom, Inc. to
many nations, more so the developing countries that are fashion hungry. India became a
population of interest because they enjoy one of the biggest populations in the world and the
middle-class individuals are steadily increasing making it easy to supply the products since many
people would willingly spend their income on flashy attire.
Plunkett and Plunkett Research, Ltd. (2013) suggested that Nordstrom, Inc.’s Asia
business opportunity requires partnering with Indian based online e-commerce sites whose role
would come handy when it comes to the acquisition of information before fully venturing into
physical shops. The partnership would provide Nordstrom, Inc. with adept information that
makes them strategize for their competitors. Nordstrom, Inc. would then roll out departmental
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stores in three of its biggest cities to learn about the shopping trends as they prepare to engage
the competitors in the market fully.
Spector and McCarthy, (2013) argued that growing markets have embraced American
based companies venturing into their market. Therefore, India is no different, and they would
offer their consumers a range of commodities that they feel would meet their core and luxurious
needs. The chain store intends to obtain returns of at least $ 19 billion from the market alone,
meaning they must conduct a thorough market research and engage personnel from various
positions to make the concise decisions.
Financing Resources
Drey, (2014) pointed that the development of the supply and chain that meets the needs
of the Indian market, the company requires long-term and sustained revenues that would meet all
sorts of demands and result in the attainment of the collection of income. The implementation of
the project would depend on the acquisition of a loan facility that would fast-track the entire
process from its conception till the application and sustain the running of the business till returns
begin to trip. Entering in license with other companies would become necessary because they
would lead Nordstrom, Inc. penetrate access to the market with less difficulty.
Plunkett and Plunkett Research, Ltd. (2013) suggested that Nordstrom, Inc. would
relegate the first phase of the project implementation to a separate company which would act on
behalf of Nordstrom, Inc. to set and run the initial stores, then Nordstrom, Inc. would come and
pick. Nordstrom, Inc. would require $ 3 billion in cash that would fully implement the project
from its beginning in a running state. From the investment, the firm will have at the minimum, $
3.5 million as operational capital.
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Not only a loan but also bonds would come handy after the feasibility reports get
evaluated, and it produces positive results. Insights from the Dubai’s case of competition
indicated that long-term license for stores of 20,000 square feet, then a minimum of 77 million
buyers would come to the store in a year, with others becoming repeat consumers, whereas
others one time buyers. India’s case would take Nordstrom, Inc. at least $ 2 billion to run the
venture into a success. Each store location in India might require between $ 350 and $ 495
million.
Spector and McCarthy, (2013) suggested that Nordstrom, Inc. would develop a brand that
is custom made to suit the Indians, and get into a licensure with a separate investor that runs its
operations. Nordstrom, Inc. intends to develop chain stores and market other commodities
through their e-commerce website that the Indians would access with their tablets, smartphones,
or personal computer. The huge Indian market requires a thorough research and paperwork
before rolling the logistic network, which would benefit the firm’s movement of resources from
a location to the other.
Investment timeframe
Drey, (2014) pointed that Nordstrom, Inc. makes use of its online portal with the
intention of increasing its online presence as a means of letting the company interact with the
Indians before the company begins their formal investment process. The interactions would put
them better placed when it comes to market analysis and thus penetrate the market with the least
pressure and confusion. The company stands a better chance of growth from the depressed
economy and embrace steady growth.
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Plunkett and Plunkett Research, Ltd. (2013) suggested that the attainment of long-term
objectives might require Nordstrom, Inc. to occur additional 1.4 million square feet for
expansion. The development and enlargement of the Indian market would need a timeline of
three consecutive years coupled with hard work and endurance of the problems that a company
undergoes in the market.
Expansion plan justification
Despite the slow economic growth as anticipated by economists, the global economy
might rise in the few years to come. The expansion plans that companies including Nordstrom,
Inc. perform get justified as the company makes an effort to set stores in nearly all countries
around the world. E-commerce has a central role in propelling the growth of the retail store in
foreign markets because it is the same online customers from India are the ones expected to show
up when the stores open.
Drey, (2014) pointed that the growth in India’s economy is an additional element owing
to the extra cash that Indians are willing to spend on their clothing and expensive lifestyle. The
upper and middle class of India had little exposure to the western culture. Therefore, the present
moment would act appropriately in making sure that they reap as much from the uptake of
Nordstrom, Inc. products. India’s economy is first growing as the class of individuals that focus
on western cultures, thus a good market to invest. Nordstrom, Inc. intends to capture at least $ 20
billion in investments as of 2021.
Priorities
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The company ought to grow Nordstrom, Inc.'s retail outlets so as to obtain the best from
the Indian market. In mid to attain their investment goals, the company ought to adhere to their
principles of business with the intention of making proactive and strategic financial moves that
would not let the company fail. Although Nordstrom, Inc. failed in Canada during their
expansion, the company learned much from experience and, they have since then grown
considerably. The company might implement the same conditions with the Indian market.
Microeconomic Environment
The expansion in the Indian market ensures that Nordstrom, Inc. becomes a global
corporation. The Indian market has lots of incentives that they may put into proper use. The
retail stores similarly, would ride from the upcoming middle class and top class consumers
whose intention is to embrace the latest products. The working of tax mechanization in India is
the separate element that would determine the profitability of the American agency. Nordstrom,
Inc. gets advantaged because departmental stores barely exist in India. Thus it may take other
companies much longer to penetrate the same markets.
Comparative Advantage
Drey, (2014) pointed that Nordstrom, Inc. would promote their business through the
opening of several retail stores and acquire several license agreements. Nordstrom, Inc. intends
to offer services that are at par and within the industry requirements through the provision of
quality products to its consumers. Strategic pricing policies are another player in the Indian
market, apart from being friendly to the users. Availing products that consumers prefer to wear
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and running a separate e-commerce store would bring the company products to the customers’
fingertips.
Opportunities
Spector and McCarthy, (2013) argued that E-commerce portals are a simple method that
integrates the physical stores to the customers who do not prefer going physically to make
purchases. The fact that Asia is fast-growing, then Nordstrom, Inc. would be at the forefront
when it comes to serving the market with the range of clothing and fashion related goods that
they find pleasing.
Reasoning for Expansion
The company gives focus on the middle-level income earners in India because India is a
growing nation. The company depends on the middle class because the citizens in the category
have the capacity to spend as much because they earn as much. The spending of the middle class
would result in profits of the company.
Internal Risks
The firm targets sales of $ 20 billion by 2021, however, the company experienced an
overlap of at least 10% up to 20% from their original plans. The study realized that four wheel
expansions of retail stores are a business whose fate did not get established. Reinforcement of the
logistic process aims to help the company determine the quality and nature of services they
obtained from the enterprise. The audit team does not merely leave the risks after their
identification; they would use the same procedure to make sure that appropriate changes get
Nordstrom, Inc. Project
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administered. Adherence to the laws and regulations of the market becomes another problem
that the company might have to deal with because they operate within the international market.
The company would create standards through which Nordstrom, Inc. would attract and
enhance customer loyalty, thus improving the name of the enterprise. The company has since
managed to prosper in the foreign market because of their adherence to the laws and ability to
satisfy the consumers. From the first three divisions, Nordstrom, Inc. intends to grow its
branches from the initial three to spread as many of the large urban areas in India, just like they
did in America.
Track Record Financial Performance
Nordstrom, Inc. has a common trend that let the company operate at the top for the
longest period. The company directs every bit of its efforts towards attainment of revenue despite
weak economic growth. The firm may partner with a local partner whereby the partner makes
sure that the subsidiary gets run within the company in the most efficient manner. Nordstrom,
Inc. would get into formal agreements through writing to complete the deals.
Ethical Behavior
The firm created a code of ethics that has kept the company on track and the
performance of legit business activities. The company has faced many charges related to their
consumers, for instance, the firm has undergone a court case where they got accused of
infringing a bag that he once owned. The firm has to operate within ethical dimension because it
not only empowers the company and the community apart from offering quality products to
consumers.
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Legal Behavior
Nordstrom, Inc. has more than once endured cases within its operations in business, some
of which include price issues and claims. The firm exemplarily corporates with the task force
charged with their judgment leading to their acquittal from the cases.
Nordstrom, Inc. Project
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References:
Drey, T. (2014). America's growth stocks: The 169 strongest performers. Holbrook, Mass: Bob
Adams, Inc.
Harrison, J. S., & St, J. C. H. (2015). Strategic management of organizations and stakeholders:
Concepts & cases. Cincinnati, Ohio: South-Western College Pub.
Plunkett, J. W., & Plunkett Research, Ltd. (2013). Plunkett's apparel & textiles industry almanac
2008: The only comprehensive guide to apparel companies and trends. Houston, Tex:
Plunkett Research.
Spector, R., & McCarthy, P. D. (2013). The Nordstrom way: The inside story of America's Ä1
customer service company. New York: John Wiley.
MBA 640 Final Project Milestone One Guidelines and Rubric
Overview: The final project for this course is the creation of an external capital funding proposal.
Most businesses face a landscape of uncertainty and a never-ending stream of risks and opportunities. Managers must continually project the likely financial
impact of decisions, make recommendations, act on those decisions, determine how to pay for them, and evaluate the costs and effectiveness of what has been
done. Many decisions are short-term, routine, and operational. Others are longer-term investment decisions that require substantial new resources, such as
developing new services, expanding into new geographic markets, or undertaking business combinations or spin-offs. Each requires managers to forecast, plan,
and make decisions based on a thorough understanding of both internal and external factors that can affect a company’s financial success.
For the summative assessment in this course, you will bring your finance and economics knowledge to bear by preparing an external capital funding proposal for
a major international investment at a publicly traded corporation. In order to secure the support of potential financial backers, your proposal will need to lay out
what the proposed investment opportunity is, how it fits within the company’s broader mission and goals, its financial impact, and the amount being requested
and why (including alternative funding mechanisms considered). In addition, it will also need to include information on the organization’s context, risk factors,
and microeconomic assumptions that could affect the success of the investment.
Prompt: You have already chosen the company you will use for your final project, and you have started a narrative description of your expansion project into
another country. In this milestone, you will build on that narrative description providing sufficient detail about the expansion, its costs, and its time frame to give
a loan committee a firm sense of the proposed investment. You will also analyze the impact of the investment proposal on your business by explaining why now
is the right time for this investment given the global context and by explaining how the investment is a good strategic fit with your company. This milestone
addresses all of Section II and Section III (Parts A and B only) of the final project.
Specifically, the following critical elements must be addressed:
II.
Investment Project: Use this section to describe the investment for which you are seeking funding, its costs, and time frame. Specifically, you should:
A. Describe the investment project. Be sure to provide sufficient detail to give the loan committee a firm sense of the parameters of the activity, the
need for it, and what financial metrics are relevant for determining success. In other words, what do you propose to do, where, what marketplace
need will it fill, and how will you measure success?
B. Specify the resources the project will require and where these resources will come from. In addition to noting the amount of the loan you are
requesting, you should also consider human resources, facilities, government approvals, intellectual property, access to natural resources, and other
resources that might be required to carry out the project.
C. Time frame. When will the project start, what is the anticipated economic life of the proposed expansion, and how will you decide if, when, or how
to exit? Justify your choices with appropriate financial metrics.
III.
Justification: In this section, you should analyze the impact of the investment proposal on your business. In particular, you should cover:
A. Why is now a good time for this investment given the global context? Justify your response, citing specific external factors such as trade regulations,
foreign currency considerations, or trends in foreign direct investment that might affect business financial decisions.
B. Strategic fit. Use this section to discuss why the investment proposal makes sense for your company strategically. Specifically:
1. How does the investment align with the company’s organizational and financial priorities? Support your argument with evidence from
company reports and financial statement analysis designed to persuade the lender that the investment is a good strategic fit for your
company.
2. How does the project fit within the global microeconomic environment? Support your response with evidence. For example, would the
expansion tap unmet demand for the company’s key products or services or fill a new niche? How do you know?
3. How does the project build on the organization’s core competencies and comparative advantage? For example, does the company have a
strategic advantage from intellectual property, regional expertise, suppliers, or organizational structure?
Rubric
Guidelines for Submission: Your investment project and justification paper should be approximately 8-10 pages in length (excluding spreadsheets, other exhibits,
and list of references as necessary). It should be double-spaced with 12-point Times New Roman font and one-inch margins, and should use APA format for
references and citations.
Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information,
review these instructions.
Critical
Elements
Investment
Project:
Describe
Investment
Project:
Resources
Proficient (100%)
Describes investment project,
providing sufficient detail to give a
firm sense of the parameters of
activity, market need, and relevant
financial metrics for determining
success
Specifies resources required,
including amount of loan and other
physical and financial resources,
along with where resources will
come from
Needs Improvement (75%)
Not Evident (0%)
Value
Describes investment project, but
description lacks detail, contains
inaccuracies, or omits key
information on parameters, market
need, and relevant financial metrics
for determining success
Specifies resources required,
including amount of loan requested,
other physical and financial
resources, and where resources will
come from, but response contains
inaccuracies or omits key details
Does not describe investment project
13
Does not specify resources required
13
Investment
Project: Time
Frame
Determines when project will start,
anticipated economic life, and exit
process, justifying choices with
appropriate financial metrics
Justification:
Why Now
Evaluates why now is a good time for
this investment in the global context,
citing specific external factors that
might affect business financial
decisions in justifying response
Justification:
Strategic Fit:
Priorities
Persuasively argues how the
investment aligns with the
company’s organizational and
financial priorities, supported by
evidence from company reports and
financial statement analysis
Justification:
Strategic Fit:
Microeconomic
Assesses how the project fits within
the global microeconomic
environment, supported by evidence
Justification:
Strategic Fit:
Comparative
Advantage
Evaluates how project builds on
organization’s core competencies and
comparative advantage in explaining
why the project makes sense
strategically
Articulation of
Response
Submission has no major errors
related to citations, grammar,
spelling, syntax, or organization
Determines when project will start,
anticipated economic life, and exit
process, justifying choices with
financial metrics, but response
contains inaccuracies, omits key
details, or financial metrics are not
appropriate
Evaluates why now is a good time for
this investment in the global context,
citing specific external factors, but
response contains inaccuracies,
omits key details, or links to business
financial decisions are tenuous
Argues how the investment aligns
with the company’s organizational
and financial priorities, supported by
evidence, but argument is cursory,
illogical, contains inaccuracies, or is
poorly supported by evidence and
sound financial analysis
Assesses how the project fits within
the global microeconomic
environment, supported by evidence,
but response is cursory, poorly
supported, contains inaccuracies, or
links between microeconomic factors
and project are tenuous
Evaluates how project builds on
organization’s core competencies and
comparative advantage in explaining
why the project makes sense, but
response is cursory, contains
inaccuracies, or is only tangentially
related to strategic fit
Submission has major errors related
to citations, grammar, spelling,
syntax, or organization that
negatively impact readability and
articulation of main ideas
Does not determine when project
will start, anticipated economic life,
and exit process
13
Does not evaluate why now is a good
time for this investment in the global
context, citing specific external
factors that might affect business
financial decisions in justifying
response
Does not argue how the investment
aligns with the company’s
organizational and financial priorities
13
Does not assess how the project fits
within the global microeconomic
environment
13
Does not evaluate how project builds
on organization’s core competencies
and comparative advantage in
explaining why the project makes
sense strategically
13
Submission has critical errors related
to citations, grammar, spelling,
syntax, or organization that prevent
understanding of ideas
9
Total
13
100%
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