Nordstrom Case Study

With 50,000 employees and 170 stores throughout the United States Nordstrom is a major player in the luxury goods department. Founded originally as a shoe store by John W. Nordstrom and Carl Wallin, Nordstrom became the largest independent shoe chain in the United States. By 1960, Nordstrom decided to enter the clothing arena by purchasing Best Apparel, and continued to expand it markets through the acquisition of other luxury goods.

Nordstrom’s continued growth and success stem from their business philosophy based on “exceptional service, selection, quality and value” (About Nordstrom, 2011). Today Nordstrom “has grown from one downtown Seattle shoe store into a nationwide fashion specialty chain with renowned services, generous size ranges and a selection of the finest apparel, shoes, and accessories for the entire family” (About Nordstrom, 2011). For over 100 years, the focus continues to be the same; catering to customer needs, individually. Nordstrom’s business philosophy could not be achieved without its exceptional employees.

Nordstrom has an excellent record in the advancement of women and minorities. In their commitment to diversity they “cultivate an environment where the contributions of every employee, customer and vendor are respected” (Nordstrom Cares, 2011). Their focus on caring for their people even goes to creating a wellness program. The wellness program designed to help employees focus on better eating, better living, and a better sense of balance. Their wellness program provides support through on-site health screening, coaching, and online resources. Nordstrom employees are treated as a part of a family.

It is no wonder why Nordstrom continues to be voted Forbes 100 Best Companies to work for. Their empowering of the employees is what stimulates the excellent customer service they provide. Their reverted pyramid is a representation of their philosophy and structure. At the top, of the pyramid are their customers, followed by sales and support people. In the middle are the department managers followed by the merchandising group, store managers, and regional managers. At the bottom, of the pyramid is where you will find the executive team and board of directors (Nordstrom Our Structure, 2011).

Nordstrom’s outstanding efforts have helped steer this luxury retailer from the economic problems in 2008 and 2009. The 2010 annual report card shows an increase in net sales, earnings before income and taxes, net earnings, earning per basic share, earning per diluted share, and cash dividend paid per share. To be specific, net sales for 2010 have increased by 12. 7% from last year and net earnings have increased by 39%. Nordstrom came out of the Great Depression and will continue to come out of the many financial crises they encounter because of their approach to dealing with customers.

The implications of their philosophies can be seen in their annual report. In times of recession were customers choose to spend their money wisely, they choose to spend it in a place were their experience is maximized. “Nordstrom knows it’s not the price but the customer service that gains and retains loyal customers that generate strong profits” (Nelson & Quick, 2011). Conflict is “any situation in which incompatible goals, attitudes, emotions, or behaviors lead to disagreement op opposition for two or more parties” (Nelson & Quick, 2011). Dealing with dissatisfied customers can be a great source of conflict for retailers.

Conflict can be considered as “ a breakdown in the standard mechanism of decision making, so that an individual or group experiences difficulty in selecting an alternative” (Rahim, 2000). Given Nordstrom’s approach to customer service and customer relationships the “breakdown” causing difficulties does not occur. They diffuse conflict situations by choosing to take the blame or burden of proof away from the customer. Their ability to deliver happy customers has led them to continue for over 100 years through the various ups and downs of the economy.

One of the major problems affecting Retailers with their success is customer satisfaction. Retailers know that satisfied customers are loyal customers” (Ahmad, 2009). Nordstrom’s approach to customer service and customer relationship management is intended to build relationships that result in customers returning to make more purchases. Nordstrom seeks to enhance customer relationships by carrying the right products that satisfy client needs, their presentation of goods generate interest in their clients, and their ability to provide extraordinary customer service been proven to be appropriate with the release of their 2010 annual report.

Customers are the most important assets of a company, therefore, the “competitive leadership goes to those companies that are customer-oriented. Customers are increasingly demanding unique, individualized buying experiences that enhance existing relationships as well as provide fresh, exciting sources of value” (Ross, 2008). Customers today perceive value arising from their experience they receive to be greater than the actual goods they acquire.

Nordstrom’s approach to customer service and customer relationship management allows Nordstrom to continue to be a competitive giant in the retailer industry. One way of classifying styles of conflict management styles is to examine the styles’ assertiveness (the extent to which you want your goals met) and the cooperativeness (the extent to which you want to see the other party’s concern met)” (Nelson & Quick, 2011). Nordstrom’s management culture states, “ healthy competition is good” (Nordstrom Cares, 2011). Competing is a style that is assertive in nature and usually uncooperative. This is not the case with Nordstrom. Management encourages winning through a team environment.

Competition in small doses is stimulating; competition encourages people to go above and beyond to meet their goals. The key to Nordstrom competing style is that they do not achieve their goals at the expense of others. They recognize outstanding performance but value kindness above all. “We still believe the golden rule has a lot of merit: Treat others as you’d like to be treated. We work hard to offer great service to each and every customer and we believe great service begins with courtesy to everyone, customers and coworkers alike” (Nordstrom Cares, 2011).

Their style also reflects collaboration. Nordstrom works towards collaboration arriving at a solution that is satisfactory to both their customers and employees. Their focus is providing customers with the best possible service. They meet client needs and while doing so accomplish their desire of excellent customer service. It is a win-win style for the organization and the client. Nordstrom also approaches customer relationship management through compromising. In a compromising style, both parties are equally powerful. A compromising style is used “ for avoiding protracted conflict” (Rahim, 2000).