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Running head: NORDSTROM, INC. PROJECT Topic: Nordstrom, Inc. project 1 Nordstrom, Inc. Project 2 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 3 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. Nordstrom, Inc. Project 4 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 Nordstrom, Inc. Project 5 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. Nordstrom, Inc. Project 6 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. Nordstrom, Inc. Project 7 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 Nordstrom, Inc. Project 8 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 Nordstrom, Inc. Project 9 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 10 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. Nordstrom, Inc. Project 11 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 12 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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Running Head: EXTERNAL CAPITAL FUNDING

Nordstrom, Inc. Project
Name
Course
Tutor
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EXTERNAL CAPITAL FUNDING

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Nordstrom Inc. External Capital Funding Proposal
Executive Summary
Nordstrom is an American retail company that has consistently triumphed in being one of
the best clothing chain stores. It has been in existence since 1901 after it was founded by John
Nordstrom. It was initially a shoe retailer, but with time the company grew regarding product
portfolio that involves clothing, cosmetics, fragrance, handbags as well as accessories. The
future prospect of the business means spreading its business operations nationally and in the
onset of a new sales department referred to as the rack off sales staff. The company has for years
gained customer loyalty through ensuring they establish a network where clients can make their
choices grounded on the available products. The company plans to expand its business operation
to developing countries in Asia and Africa. Specifically, the company targets India and South
Africa. Analysis indicates that the corporation the backing the sales plan with a robust electronic
commerce strategy will ensure the company achieves its sales forecast.
After years of planning, the organization is prepared to go international with the focus on
developing nations. Understandably, the company profits have been on the rise since it ventured
into the Canadian market when the Canadian dollar was fluctuating. The company growth would
significantly challenge other retail enterprises in the electronic commerce business to spread their
coverage to attain more from the enterprise. This would need partnering. To create a successful
partnership in distinctive areas more funds will be necessary to supplement the arrangement;
therefore, a request for capital funding proposal is essential.
Project Description

EXTERNAL CAPITAL FUNDING

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Recently, international expansion has been getting some attentions. There are several
critical factors that need to be taken into consideration before making some decisions such as
entry models, business strategies, opportunities and threats. The company has allocated over a
billion dollars to the expansion of stores in Manhattan and Canada (Nordstrom, 2015). However,
the company needs to consider other developing countries like India and other advanced African
countries like South Africa. These countries have a growing middle class that desires to live the
western lifestyles. Expanding to these regions would diversify Nordstrom business operations in
the globe. The developing countries like India present a ready market that the company would
serve.
Nonetheless, given that these regions do not know of the company existence, the
company will have to partner with other business operating in these areas. These companies will
include large supermarkets and malls. This will enable the business to understand how these
markets operate. When they have the full information, they will decide on their next move. If the
markets are willing to buy the company products, then they will open their stores in these regions
(Nordstro...


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