Online Custom «Dynamic Decision Making» Essay Sample
The recent economic downturn has affected virtually all industries. The retail clothing industry in the United States has not been spared since the factors that determine the performance of the industry have been adversely affected by the economic downturn. For instance, the wages and salaries, which determine the amount of disposable income has decreased during these economic times (Starr, 2011). Although these factors affect all the players within the industry, different competitors such as Nordstrom are affected differently.
The economic conditions in the United States have led to a hike in the fuel prices. As a result, the cost of shipping products has increased, leading to an increase in the price of products. One threat facing Nordstrom is losing customers to competitors due to the increased product prices. Nordstrom sells high class products, that are comparatively more costly than products offered by its competitors (Spector and McCarthy, 2000). Since the state of the economy has reduced people’s earnings, they tend to buy products that are lowly priced. Competitors who sell products that are lowly priced are likely to take away customers who can no longer afford products from Nordstrom. This is a threat to its existence that needs to be neutralized and turned into an opportunity. Another threat to Nordstrom is posed by e-commerce competitors such as e-bay. These competitors offer all sorts of merchandise, including fashion products that are core to Nordstrom’s business. The ease of purchasing online makes the e-commerce companies favorable to customers.
These threats can be turned to an advantage by Nordstrom through two different strategies. The first strategy is to locate the stores near suppliers to reduce the effects of the cost of fuel. This way, product prices will remain fairly constant. Secondly, Nordstrom needs to establish an online platform through which customers can purchase its products. This will offer customers convenience and improve the company’s image to the customers since it will appear to keep pace with current trends.