Learner Name Abdulrahman Adnan Mustafa Thekrallah

Learner Registration No.

Study Centre Name Success Point College
Qualification Title OTHM LEVEL 7 DIPLOMA IN STRATEGIC MANAGEMENT AND LEADERSHIP
Unit Reference No. A/616/2724
Unit Title Strategic Management
Word Count 4387
Submission Date 26 / June / 2021

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Date: 26 / June / 2021 Date:

Document Format: Word (.doc, .docx) only

Part 1: Essay Questions: Explain your answers comprehensively for the essay questions listed below.
Provide introduction, body, conclusion format. The concepts from the slides can be a guide (as it is too
short) but not the absolute answer (20 marks – at least 750 words required per question).

1. Explain how an internal analysis is an important part of managing strategically. Emphasize in

your discussion the strategic role of organizational resources and organizational capabilities in
making the internal analysis an effective one. (10 marks)

2. Discuss how corporate strategies are related to functional strategies or vice versa. Why are these
two concerned with the choices of what businesses want to become? (10 marks)

Part 2: Scenario. Avoid the use of bullets or outline format (10 marks – at least 750 words required).

Avon is the world’s top direct seller of cosmetics and beauty-related items. Even with a global economic
recession, the company increased the number of independent sales representatives by 12%. This increase
was especially seen in Russia and China – two markets with an emerging middle class. However, prices
for raw materials have hurt Avon as the firm manufactures and packages nearly all of its beauty products.
As these costs rose, profits were affected.

Avon’s CEO, Andrea Jung, arrived in 1999 and made several major cuts and layoffs throughout the
company (except for advertising and promotion). In addition, a few significant missteps in Brazil and
Europe kept the company from fully recovering. As Avon continues to look for a new CEO, Jung remains
in place. And once the new CEO is found, she will remain as Executive Chairman for the company.

Guide Question: Assuming you have conducted your internal and external analyses, which level of
strategy (functional, competitive, or corporate – select only one) can work as a remedy to their
weaknesses? Explain. (10 marks)

Part 3: Case Study. Explain comprehensively your answers. Avoid the use of bullets or outline format
(30 marks – at least 1000 words required per question).

Case: “Nordstrom”

Nordstrom is one of American’s most successful fashion retailers. John Nordstrom, a Swedish
immigrant, established the company in 1901 with a single shoe store in Seattle. From the very
start, Nordstrom’s approach to business was to provide exceptional customer service, selection,
quality and value. This approach remains Nordstrom’s hallmark today.

The modern Nordstrom is a fashion specialty chain with 240 stores in 31 states. Nordstrom
generated almost $12.5 billion in sales in 2014 and makes consistently higher-than-average returns
on invested capital. Its return on invested capital (ROIC) has consistently been in the mid-teens to
low 20s, and was 16.3% in 2014 - strong performance for a retailer.

Nordstrom is a niche company. It focuses on a relatively affluent customer base that is looking for
affordable luxury. The stores, located in upscale areas, have expensive fittings and fixtures that
convey an impression of luxury. The stores invite browsing. Touches such as live music played
on a grand piano help create an appealing atmosphere. The merchandise is fashionable and of high
quality. What truly differentiates Nordstrom from many of its rivals, however, is its legendary
excellence in customer service.

Nordstrom’s salespeople are typically well groomed and dressed, polite and helpful, and known
for their attention to detail. They are selected for their ability to interact with customers in a positive
way. During the interview process for new employees, one of the most important questions asked
of candidates is their definition of good customer service.

Thank-you cards, home deliveries, personal appointments, and access to personal shoppers are the
norm at Nordstrom. There is a no-questions-asked returns policy, with no receipt required.
Nordstrom’s philosophy is that the customer is always right. The company’s salespeople are well
compensated, with good benefits and commissions on sales that range from 6.75% to 10%
depending on the department. Top salespeople at Nordstrom have the ability to earn over $100,000
a year, mostly in commissions.

The customer service ethos is central to the culture and organization of Nordstrom. The
organization chart is an inverted pyramid, with salespeople on the top and the CEO at the bottom.
According to CEO Blake Nordstrom, this is because “I work for them. My job is to make them as
successful as possible.” Management constantly shares anecdotes emphasizing the primacy of
customer service at Nordstrom in order to reinforce the culture. One story relates that when a
customer in Fairbanks, Alaska, wanted to return two tires (which Nordstrom does no sell), bought
some time ago from another store once on the same site, a sales clerk looked up their price and
gave him his money back!

Despite its emphasis on quality and luxury, Nordstrom has not neglected operating efficiency.
Sales per square foot are $400 despite the large, open-plan nature of the stores, and inventory turns
exceed 5 times per year, up from 3.5 times a decade ago.

These are good figures for a high-end department store. Management constantly seeks ways to
improve efficiency and customer service; recently, it put mobile checkout devices into the hands
of 5,000 salespeople, eliminating the need for customers to wait in a checkout line.

Guide Questions:

1. Critically examine Nordstrom’s segmentation strategy (Who does it serve?) and appraise
which actions it has taken at the functional level to successfully implement its strategy
(15 marks).

2. Using the Porter model, critically analyze which generic business-level strategy is
Nordstrom pursuing and explain the advantages and disadvantages of this strategy (15
points).
Part 1: Essay Questions: Explain your answers comprehensively for the essay questions listed below.
Provide introduction, body, conclusion format. The concepts from the slides can be a guide (as it is too
short) but not the absolute answer (20 marks – at least 750 words required per question).
1. Explain how an internal analysis is an important part of managing strategically. Emphasize in
your discussion the strategic role of organizational resources and organizational capabilities in
making the internal analysis an effective one. (10 marks)

“Designing a winning strategy is the art of asking questions. Experimenting and then
constantly renewing the thinking process by questioning the answers. No matter how good today’s
strategy is, you must always keep reinventing it.” (Constantinos Markides, Author of All the Right
Moves) (1). Nowadays organizations operate in a rapidly changing environment with a high degree
of complexity and uncertainty. Organizations perform their services in a political, economic,
social, technological, ecological, legal and cultural environments that are becoming more and more
complex day by day, creating new opportunities and putting the organizations in front of new risks
that they need to either take advantage of it and capture it or to make all the necessary precautions
to avoid it. This makes the task of strategic management and strategic planning more difficult and
more challenging in achieving the objectives and goals of the organization and requires
organizations to adapt to their internal and external environments in order to survive and make
profits. Therefore, Understanding the business environment is essential to a strategic planning
process and the organizations always trying to monitor and analyze their internal and external
surroundings seeking for new opportunities to capture and threats to avoid.
Strategic analysis for an organization is the analysis of the external and internal
environments of the organization using different tools and techniques in order to identify strategic
position, better make strategic choices and plan for strategic future. SWOT analysis is highly
recommended analysis tool for its simplicity and value in focusing attention on key issues that
affect business development and growth. SWOT analysis is listing of an organization's strengths
and weaknesses by an analysis of its internal environment (resources and capabilities), and listing
of the threats and opportunities that an analysis of its external macro-environment.
In specific, internal analysis is used to study and analyze the organization’s resources and
capabilities, in order to identify its strengths and weaknesses and thus to determine the competitive
advantages that the organization is having to control its internal environment, in a way that helps
management in determining the necessary strategy to achieve the objectives and goals of the
organization. Internal analysis also helps the organization to know how the opportunities available
in the surrounding environment could be captured and how the threats can be avoided. Analyzing
the internal environment of the organization works to support the competitive position of the
organization and to give it a great competitive advantage. As the results of internal analysis can be
employed in achieving and supporting the strategy choices by identifying strengths in order to
support them, revealing opportunities resulting from them, in order to devote the energies of the
organization to exploit them. In addition, identifying weaknesses in order to remove them if
possible, and identifying the threats arising from them, and thus determining the mechanism for
avoiding threats or at least, to reduce their effect. Among the most important tools to facilitate such
understanding is SWOT analysis.
The process of analyzing the internal environment serves the strategic analysis process by
translating its results into mechanisms and actions through which it support the managers in
determining the strategies that will be pursued in order to reach the competitive advantage and
achieve the strategic position. By implementing internal analysis, organization can recognize its
core competencies for decision-making, planning and building strategies.
In the current modern world, the efforts of the organizations to achieve a set of economic
and organizational goals are increasing. Hence, they can achieve these goals only by imposing
themselves in their environment, which is characterized by intense competition, and thus to win
the largest possible number of customers and ensure their continuity. Despite of the value of
SWOT analysis in strategic planning, organizations shall also be caution to the disadvantages in
using SWOT. SWOT factors require deep investigation in order to well understand their
characteristics and implications for the business. In particular, it is preferred that SWOT should be
seen as a support tool to draw managers together to discuss relevant internal issues related to the
organization’s resources and capabilities affecting the business and as such, SWOT becomes a tool
from which strategies may be planned and developed and a tool that enhances management
strategic development. In review of the SWOT analysis, organizations can understand the
opportunities available to capture, which can be in the form of new technology or infrastructure
development that can expand the customer platform. It also allows to build organization’s strength
and to create new opportunities to reach more customers. It is also important to take risks seriously
and carefully.
2. Discuss how corporate strategies are related to functional strategies or vice versa. Why are these
two concerned with the choices of what businesses want to become? (10 marks)

Strategic management consists of three levels: Strategic management at the corporate level
of the organization .At this level, strategic management undertakes the process of planning all
activities related to formulating the mission of the organization, determining strategic goals,
mobilizing the necessary resources, and formulating the strategic plan. Then we have the Strategic
management at the business level (competitive strategy). The strategic management at this level
undertakes the formulation and implementation of the strategic plan for all business units, meaning
that the strategic management is responsible for planning and organizing all activities related to
the strategic plan of the unit and taking the necessary decisions to implement it and concerned with
taking actions against competitors moves. Strategic management at the functional level, meaning
there is a strategic plan for marketing, a strategic plan for individuals and a production plan where
each plan undertakes the process of evaluating the policies, programs and procedures for the
implementation of each job without entering into the details of direct supervision of the daily
activities of these jobs.
At the corporate level, the senior management exercises the strategic planning action of
the organization as a whole, and the focus is on developing a mixture of administrative activities
and trends that relate to everything that takes place in the organization in terms of administrative
and production activities and practices. The focus is also on making decisions related to the work
of the organization, its products and markets. Existing and future levels of financial flows from
and to production units, and the organization's relationship with other parties in the external
environment. There is also a consensus that the study of strategic management focuses on the
function of senior management.At the functional level, strategies formed aimed at maximizing the
productivity of technology, machines and other resources. Strategies are developed at the levels of
higher strategies and the strategic practice at this level aims to increase the effectiveness of
performance in terms of resources, processes and people to serve the holistic objectives of the
strategies developed at the level of higher management.
One might think that every manager can literally be a manager of any department or of any
level at the organization. However, this is not true, from my point of view, because the matter
depends on the qualifications and experience required for each type of management, as well as the
individual skills, scientific specialization and renewed knowledge of the types of activities of those
administrations. In addition to that, leadership of the organization as a whole needs a vision and
perceptions of a person familiar with the dimensions of the fields in which the company operates
and the manager practicing in the same field gains such tacit and explicit knowledge. Purchasing
management differs from marketing management or production management so is managing
people or managing contracts. That is why every organization shall carefully practice strategic
management and hire qualified managers to fill this position. The importance of strategic
management lies in its ability to link between the higher directions of the organization and how
each part/ divisions of the organization can and will achieve these directions and goals as a whole.
Strategic management represents the series of decisions and actions that lead to the development
and formation of effective strategies that help achieve the goals of the organization. These
decisions and actions are strategic decisions. Therefore, it is a process carried out by the senior
management to determine the long-term directions as well as the performance of each business
level by ensuring appropriate implementation and continuous evaluation of the strategy set to
achieve the objectives.
Every organization despite of its field is embedded in a strategy. Accordingly, if all the
levels at the organization does not understand this strategy nor have a clear sense of the overall
strategy or how does every person serve the holistic strategy, then that strategy is not formed
correctly and organizations will not be able to decide if they are doing the right business or if they
are having the right goals to achieve or if the potentials and capabilities are not well used to achieve
the intended goals of the organization and to deliver the ultimate value or competitive advantage.
The questions that each organization must ask themselves and answer are; how do we ensure a
very clear, powerful and continuous connection between the different business levels and corporate
level? How do we ensure the alignment between the different levels and the organization’s core
strategic goals to deliver intended value? By answering these questions, organizations can assure
that all the capabilities are directed to serve the holistic strategies.
Part 2: Scenario. “Avon case study”
Guide Question: Assuming you have conducted your internal and external analyses, which level of
strategy (functional, competitive, or corporate – select only one) can work as a remedy to their
weaknesses? Explain. (10 marks)

Avon Cosmetics (Avon Products Inc.), an American company, was founded in 1886 by
David McConnell in Manhattan, New York. Initially called the California Perfume Company, the
company was renamed Avon in 1930. It started the concept of the direct selling of cosmetic
products, thus providing thousands of women with work opportunities at a time when they could
not even vote. Internationalization of the company started in the 1920s and 1930s when it reached
Canada and Europe. In the 1950s, it arrived in Latin America and in the 1980s in Asia and Africa.
In 2019, the company reported on its sales and distribution operations in more than 70 countries
via its 6 million female sales representatives (2). Strengths and weaknesses focuses on Avon’s
internal factors are that give an organization certain advantages and disadvantages in meeting the
needs of its target market and to build a sustainable competitive advantage in the marketplace.
Opportunities and threats existing in Avon’s macro-environment that are analyzed in view of the
relevant market forces and other factors such as technological, social, health & safety, legal &
environmental, economic , and political.
Based on most of the published SWOT analysis of Avon’s cosmetics, Strengths of Avon
is mostly related to the multiplicity and diversity of its products, which allows it to reach to a larger
number of potential customers and enabling it to target various segments in both the domestic and
the international markets at the same time. This has enabled Avon to have a diverse revenue source.
Avon also has one of the most recognized brands in the cosmetic market. Also the expanded
number of representatives is an important strength. Avon has over 3.7 million sales representatives
in the entire world (3). With such a large number of representatives, Avon assures to reach out to
more number of potential customers. Weaknesses of Avon is mostly related to the customer
dissatisfaction. Despite of the large demand for products, there is an increased sense of
dissatisfaction among the customers of Avon because of the “fair” customer services provided by
Avon. Example, the procedure to return any product is very complicated. The customer have to
wait an extended period of time, and instead of returning the money, Avon offering to give a credit
note and to deduct the amount from the next order, which gives the customer the feeling that he
has been forced in an indirect way to buy again from Avon.
 Opportunities of Avon is mostly related to the evolving market size and growing number
of potential consumers. This presents Avon’s challenges to maintain current loyal customers and
to reach to the new potential customers. Moreover, E-commerce and social media business models
can help Avon if they exploit these options in reaching international market in a stronger ways.
Social media growth can also reduce the cost of marketing campaigns, ease the process of entering
new markets and reaching to more customers at a significantly lower budgets. Avon can also take
advantage of environment consideration which can lead to the satisfaction of customers who are
considering environmental protections and rights as integral concern when buying cosmetic
products. The threats of Avon are mainly connected with the expanded competition in cosmetic
market. Currently, there are many competitors to Avon providing almost the same high quality
value with lesser prices than Avon. The technology used by the competitors also may present a
threat. Growing dominance of digital suppliers such as Amazon, noon and many online cosmetic
sellers can reduce the chances of Avon products to be noticed and also can put pressure on Avon’s
pricing policies. Moreover, Age and life-cycle segmentation of Avon shows that the company still
hasn’t able to well penetrate the millennial market.
After analyzing data about Avon Company and its competitors, we observed that Avon
clearly need to put more efforts on working at the corporate level strategy. Most of the issues
arising from weaknesses and threats and the opportunities need to be captured are connected with
the overall scope of Avon. Issues mostly related to geographical scope, diversity of products, how
resources are allocated, market segmentation and how new technologies may be acquired and used
to enhance the reach of Avon’s brand to more segments of potential consumers and thus to create
viable options in order to enhance the market position of Avon. Moreover, Innovation is one
method by which a company may increase market share. Also Avon need to work more on
strengthening customer experience and relationships by implementing enhancements in the
customer service. Organizations always must work to protect their existing loyal customer and
preventing them from going to the competitors. Let’s do not forget that the best marketing tactic
is making your satisfied customers speak about their positive experience to their friends and
relatives who then may become your new customers.
Part 3: Case Study. Explain comprehensively your answers. Avoid the use of bullets or outline format
(30 marks – at least 1000 words required per question).
Guide Questions:

1. Critically examine Nordstrom’s segmentation strategy (Who does it serve?) and appraise
which actions it has taken at the functional level to successfully implement its strategy
(15 marks).

Market Segmentation targeting and positioning plays an important role in the development
of the organization’s marketing strategy. Market segmentation concerned with dividing the target
market into subsets of consumers based on preferences, needs and wants. There are typically four
ways to segment a market; geographic, demographic, psychographic, and behavioral. After the
organization breaks a large market into smaller segments, it starts to target its specific segment of
customers that the company want to satisfy or for whom product is manufactured, price is set and
distribution network is prepared. It defines a segment of customers based on their unique
characteristics and focuses solely on serving them. Nordstrom, developing products based on
lifestyle, age, and occupation of the customers. Nordstrom, usually follow demographic
segmentation, it targets men, women and kids, ages from newly born and onwards, bachelors and
families, medium and high income occupations and especially to affluent people who wants classy,
quality and nice products. Market segmentation offers a variety of potential benefits to the
organization business such as better matching of customer expectations and needs, enhanced
financial profits for business, more opportunities for growth domestically and internationally,
retain current customers and reach to more segment of potential customers and target marketing
communications goals more efficiently as the target customers can be reached more often.
Functional level strategies are the actions and goals assigned to various departments that
support the business level strategy and corporate level strategy. These strategies specify the
outcomes you want to see achieved from the daily operations of specific departments (or functions)
of the business (4). Nordstrom value proposition is mainly to introduce a unique customer
experience throughout the entire purchase cycle. There always dedicated to keep this value
differentiated and unique from those which the competitors can provide to the same segment of
customers and are backed by reasons and serious steps taken by Nordstrom to prove the
organization’s value proposition. As per Nordstrom marketing strategy, “Everything we do starts
with the customer” (5). They have taken many actions at the functional level to implement their
strategy. For example, the human resource strategy by hiring more salespeople selected for their
ability to interact with customers in a positive way. Take employees as the core, salespeople are
well compensated, with good benefits and commissions to raise the efficiency of employees at
work. Nordstrom also provide their employees with good and healthy working conditions so that
they contribute to the success of the organization. Nordstrom’s human resource department deals
with many activities like personal learning and development, personal wellbeing and keeping the
employees motivated.
At another functional level, marketing at Nordstrom at its core helps them engage with
their customers through better services and greater access to products no matter how they choose
to shop. Nordstrom combined there digital capabilities with their local assets of people, product
and physical locations to help reimagine the shopping experience for customers and serve them on
their terms. This strategy enables increased customer engagement through services and greater
access to merchandise selection with faster delivery and at a lower cost (5). Creating greater choice
and convenience around pick-up, delivery, returns, service points, and fulfillment methods and
speeds, enabled by an increased in-market network of Nordstrom and Nordstrom rack stores,
Nordstrom Local neighborhood service hubs and supply chain facilities. Nordstrom moving
physically closer to customers' homes and communities in their most important markets, providing
order pick-up, returns and services at many locations. Nordstrom also focus on service innovation,
such as a return policy, that does not require a receipt for return. Moreover and at the same
marketing level, Nordstrom always launching new branches at new locations which enables them
to retain their current customers and reach out to more segment of potential customers. The list of
all stores slated to open from now until 2023 is available at Nordstrom website (6). Nordstrom
always focused on finding ways to make customer experience even better. They are thinking about
things like having a tailor next to order pick up so an alteration isn't a separate step to make things
easier for their customers.
At another functional level, Financial at Nordstrom includes raising capital for the
organization, investing in new market fields such as restaurants as they operates 218 restaurants
across the Unites States (7), creating and implementing annual budgets, sourcing and utilization
of relevant funds for investments, management of available working capital and profit utilization.
Nordstrom generated almost $12.5 billion in sales in 2014 and makes consistently higher-than-
average returns on invested capital (8). Improving brand recognition and reach to more segments of
customers also a fundamental pursuit at Nordstrom by supporting many social cases and concerns
such as anti-racism against color or gender, support Communities in response to Covid-19, creating
corporate partnership with the National Urban League, a historic civil rights organization.
Nordstrom’s private-label brands, donates 2.5% of sales to organizations focused on empowering
youths, (9). Biological wise, Nordstrom distribution centers recycle 98% of their waste on average.
Such actions led to the satisfaction of customers who are considering such cases as integral concern
which allows Nordstrom to attract new customers that they have not historically prioritized while
not losing sight of their existing customers. Combined with Nordstrom’s excellence in customer
service, they are committed to provide high quality products that confirm the brand image they are
trying to maintain. Accordingly, Nordstrom is always producing themselves as one of the most
premium brands out there and always targeting a less price-sensitive, wealthy people, innovators
and people with good jobs.
With reference to the above, functional level strategy will have the most details compared
to the higher level strategy types (corporate level and business level). Thus, functional level
strategies have to be always aligned with the upper level strategies. In addition to the vertical
alignment, functional level strategies should also be integrated horizontally within and among the
different departments. Such coordination and alignment is clear in Nordstrom strategies which
allow them to capture a great strategic position in their competing market and led the brand to the
current success and well recognized brand image.
2. Using the Porter model, critically analyze which generic business-level strategy is
Nordstrom pursuing and explain the advantages and disadvantages of this strategy (15
points).

“Diamond Model” also called “Theory of National Competitive Advantage”, is a term

developed by Michael Porter and first mentioned in his book "The Competitive Advantage of
Nations". It is a diamond-shaped model that focuses on explaining the reason for the high
international competitiveness that some industries located in certain countries have but others
don’t. It also explains the reason for the sustainable innovation ability of some companies located
in some countries or belong to certain regions. Porter explains how organization's ability to
compete in the international arena depends primarily on the interconnected set of advantages
present in the location in which it operates. The four components of the Diamond model are local
factor conditions, home demand conditions, local related and supporting industries, and from local
firm strategy, industry structure and rivalry. In addition, Porter's model is a model designed to help
in understanding how governments can act as main player to improve a country's position in a
globally competitive economic environment.
Business-Level strategies are a mechanism for an organization to achieve a desired
competitive advantage. The main features around which a business strategy is formulated is how
the organization competes in the market in which the organization operates and how it positions
itself among competitors, so it is often called a Competitive Business Strategy. A successful
organization is the one that can create a competitive advantage for it by matching its distinctive
internal capabilities with the opportunities available to it in the market in order to determine the
foundations on which the organization will compete.
Porter has introduced three types of generic business strategies in which a business strategy
can be cost leadership strategy, product excellence strategy or focus strategy on a part of the
market. The organization, or one of its strategic business units can choose a competitive strategy
from among the three above-mentioned business strategies of Porter or a hybrid one in which it
employs its competitive advantage over its competitors in order to achieve a competitive position
in the industry sector. Decisions made at the strategic business level are essentially similar to those
made at the corporate level of the strategy. At the corporate level, resource allocation and profit
source management are between strategic business units, while at the business unit level, this is
done between functional divisions or activity areas within the strategic business unit.
 Nordstrom is an example of a firm pursuing a Differentiation Focus strategy as they are
providing high quality products while ensuring a unique customer experience throughout the entire
purchase cycle while that it is focused on a narrow segment (niche marketing) of the market.
Typically, firms with such Orientation and strategy will concentrate on building unique features
serving their narrow market segment to win in the marketplace. They also usually charge a higher
price to their customers, to offset the cost of being unique.
Local factor conditions are necessary inputs to support the competitiveness of an industry
over its competitors in other regions. Such factors may include but not limited to availability of
qualified human resources, good infrastructure and effective administrative structure, availability
of encouraging scientific and technological infrastructure, sustainable natural resources, scientific
knowledge and technological innovation. Nordstrom is taking advantage of local factors such as
the technological awareness of their targeted segment of customers to pursue their competitive
strategy. Such advantage allowed Nordstrom to introduce the option of online shopping. By
combining their digital capabilities with their local assets of people, product and physical locations,
it helps to reimagine the shopping experience for customers and serve them on their terms.
Home demand conditions are determined as the conditions and sophistication of domestic
demand for industry’s products. The nature of the domestic customers has a significant impact on
the organization’s competitive advantage. According to Porter, home demand is determined by
three major characteristics; their mixture (the mix of customers’ needs and wants), their scope and
growth rate, and the mechanisms that transmit domestic preferences to foreign markets. (10)

Nordstrom is taking advantage of home demand conditions as the affluent customer base that is
looking for affordable luxury has always motivated Nordstrom to continuously improve the quality
and design of their fashion products and services.
Local related and supporting industries is explained as one internationally successful
industry may lead to advantages in other related or supporting industries. Competitive supplying
industries will reinforce innovation and internationalization in industries at later stages in the value
system. Besides suppliers, related industries are of importance. These are industries that can use
and coordinate particular activities in the value chain together, or that are concerned with
complementary products (e.g. hardware and software) (10). Nordstrom competitive advantage
development has always been in close relationship with many other sectors such as garments and
embellishments, textile and apparel, sewing machinery. It’s an inter-related system whose
members continuously pushed each other to improve and innovate for mutual benefit.
Local firm strategy, industry structure and rivalry are the conditions in a country that
determine how companies are established, are organized and are managed, and that determine the
characteristics of domestic competition here. This will provide advantages and disadvantages for
particular industries. Typical corporate objectives in relation to patterns of commitment among
workforce are of special importance. They are heavily influenced by structures of ownership and
control. Family-business based industries that are dominated by owner-managers will behave
differently than publicly quoted companies. Porter argues that domestic rivalry and the search for
competitive advantage within a nation can help provide organizations with bases for achieving
such advantage on a more global scale. With pressure from competitors such as Macy's (M),
Dillard's (DDS), Neiman Marcus, and Saks (11), online sales increase and technology disruption,
Nordstrom business strategy is to grow through providing a unique customer services and
experience.
By reviewing the results above, it is observed that the four components of Porter’s
Diamond model gives an increased competitive advantage to some regions more than any other
competitors in the same sector. As Nordstrom product’s cost considered to be high means they are
better able to absorb cost increases in raw materials. Moreover, Nordstrom’s market segment
(buyers) doesn’t have a notable force in price reductions because they can’t get the extraordinary
customer experience which Nordstrom is offering elsewhere. Brand loyalty and uniqueness stops
Nordstrom’s customers from switching to new entrants, prevents customers from switching to
alternatives and will prevent competitors from taking Nordstrom’s market share.
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