How would you characterize the competitive strategy of a high-end department
store chain such as Nordstrom? What are the key customer needs that Nordstrom
aims to fill?
The Nordstrom web site states the following. Over the years, the Nordstrom
family of employees built a thriving business on the principles of quality, value,
selection, and service. Today, Nordstrom is one of the nation’s leading fashion
retailers, offering a wide variety of high-quality apparel, shoes, and accessories
for men, women, and children at stores across the country. We remain committed
to the simple idea our company was founded on, earning our customers’ trust one
at a time.
Nordstrom fills customer needs for high quality fashion merchandise and
outstanding levels of customer service. Price is no object for the typical
Where would you place the demand faced by Nordstrom on the implied demand
uncertainty spectrum? Why?
Implied demand uncertainty is demand uncertainty due to the portion of demand
that the supply chain is
, not the entire demand. A high-end department
store chain such as Nordstrom falls on the high end of the implied demand
uncertainty scale. The fashion items that Nordstrom stocks have extremely high
product margin, high forecast errors and stockout rates, and once the season is
over, these items are sold at deep discounts at their Nordstrom Rack outlet stores.
What level of responsiveness would be most appropriate for Nordstrom’s supply
chain? What should the supply chain be able to do particularly well?
Supply chain responsiveness takes many forms, including the ability to respond to
a wide range of quantities, meet short lead times, handle a large variety of
products, build innovative products, meet a high service level, and handle supply
uncertainty. The Nordstrom supply chain must be highly responsive in the areas
of handling highly innovative fashion products, customer response, and service
level; they are effective in supplying well-heeled customers with merchandise and
their return policy is legendary in the Pacific Northwest.
How can Nordstrom expand the scope of the strategic fit across the supply chain?
Scope of strategic fit refers to the functions within the firm and stages across the
supply chain that devise an integrated strategy with a shared objective. By
adopting an intercompany interfunctional scope strategy, Nordstrom will
maximize supply chain surplus. Nordstrom can move in this direction by working