Business Level Strategy - Paper Sample

A business level strategy involves searching for a competitive advantage. It also involves doing research on how it positions in the marketplace to gain competitive advantage and various positioning strategies used in the industry setting. Essentially, this approach involves the individuals the company decides to serve in line with their needs and desires. The business level strategy also entails how the company decides to satisfy the needs of the customers. According to Porter Michael, two competitive dimensions are the important keys to the business level strategy. The first dimension is the primary source of a companys competitive advantage. The aspect involves whether a company is trying to gain an edge on the rivals by keeping the prices down or offering a unique item in the market. The dimension is the scope of the firms operations. This aspect entails whether the company tries to target the general customer or it aims at attracting only a segment of the consumers. There are various business level strategies, which emerge from the decisions including differentiation, value innovation, and cost leadership. It is in rare cases that a firm offers to lower the cost of its goods and services and maintain the quality as desired by the customers. It is evident that the companies practicing this strategy are following best price strategy. The competitive strategy of Nordstrom is differentiation through product, continuous improvement, superior customer service, and quality. The president of Eric Nordstrom stated that fashion is what sells. Additionally, he said that the company could be the retailers customer trust with unyielding commitment and compelling merchandising to customer service. The company has personalized sales associate, which research consumers and assist them with their shopping. The company is building in a culture such that when a customer walks into the store the sales person knows the type of clothes they need and guides them to the department, which compliments their style. The stores products are of the highest quality, and they are presented in an appealing way to the consumers. It is important for the company to keep up with the current trends, latest technological innovations, and competitor activities to have a competitive advantage.

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Integrating and outsourcing

More than one industry participation by the departmental store in the value chain leads to vertical integration. Vertical integration is faced as some parts of activities are left unconducted within their firm because they do not produce their fabric. Departmental stores participate in manufacturing, retailing, and after sales services. Backward integrated is also faced by the company by purchases and sells of products from other suppliers.

Diversification

Nordstrom values the richness that diversity brings to the company and this it better and the community they serve stronger. The business is deeply committed to cultivating an environment where contributions of every employee, customer, and vendor are respected and appreciated. They are committed to working with diverse-owned businesses. For it is vital to have partnerships with viable suppliers that provide the firm with a competitive advantage and provide customers with the products, services, and experiences they want. Through the Supplier Diversity Program, it recruits and introduces vendors to all areas of the company, including merchandise, services, and supplies. The program offers opportunities for businesses owned by minority individuals, female, gay, bisexual, transgendered, service-disabled veteran, and disabled people so that they can provide services and products to Nordstrom and their customers. Their hope is that the business opportunities that come from this program will also aid in boosting the economic growth of the communities in which they serve. The program has grown substantially since its inception in 1989, spending more than $14 billion with diverse-owned businesses.

Cost Leadership

The aim of any firm is to have a low-cost leadership strategy with the means to provide a product or service at a lower cost than the competitors. However, I believe that Nordstrom steers from this particulate form of strategy, finding other ways of applying a cost to appeal to customers. Nordstrom provides free shipping online for its products. The strategy costs them more money in the end but promotes customer loyalty. They have a liberal return policy, which means that practically any item can be returned with the receipt. If the client lacks receipt, employees have the priority to look at the customer's record of the purchase to compensate them. Nordstrom is aggressive about market price matching. They sell high-end brands, but the prices, which compared to other high-end retail stores. Any association with the departmental store brand is rectified.

Differentiation

The second basic strategy is product differentiation. Product differentiators often sell a very unusual product or service. Take Nordstrom for example, it offers unsurpassed service, and often, it offers a great and high-quality selection of items. However, Nordstrom goods cost more than most but consumers happily pay the extra amount because they get so much more for their money.Nordstrom also fosters a company culture that is based on building an exceptional customer experience when entering the store. A firm that relies on a differentiation strategy competes by the unique features of its products or services. The aim of making this strategy work can charge the customers more for their unique features than how the special features cost the firm. Differentiation needs to produce increased revenues more than higher costs.

Value Innovation

Nordstrom recently published its annual report emphasizing its efforts to be on the leading edge of retail innovation. Its customer attention for instance customer care in the store, ease the shopping steps. Caring for the client adds momentum to sales and recognizes consumer priorities. Here are a few Nordstrom has been pursuing in recent years. Textile is a new service at Nordstrom that facilitates shopping by text with a sales associate. This is a secure way for customers to makes purchases from a salesperson or a personal stylist. Curbside delivery is another innovation at Nordstrom. At full line stores, customers can now drive up to a specific spot the store and pick up the merchandise they ordered by email. IVY PARK, a new line of active wear for women developed by Beyonce and Sir Phillip Green, has been introduced in Nordstrom. In recent months, Nordstrom has announced retail partnerships with successful brands such as Topshop, Topman, and Madewell. The company has redesigned stores to make transactions faster and more convenient to customers. Nordstrom has launched SPACE in some of the cities including Seattle, Chicago, Vancouver, and San Francisco. Space is a new shop curated by Olivia Kim, and it features the new young designers. Nordstroms innovation is geared to serve young, working women and men the millennial customer who has little time and less patience. Customers recognize innovations and new fashion ideas presented in stores and on the internet and will continue to do so as long as management continues making customer their priority.

Corporate strategy

Nordstrom business strategy is to differentiate themselves from competitors by offering superior customer service and product quality. Over the years they have expanded as opportunities have become available, both geographically and in the retail supply chain. At the turn of the century, they had no physical presence outside of the U.S. and minimal online presence. Through continuous expansion, the firm has managed to increase its number of customers who can be served in the store while they try to rebuild their online business for the consumers who they cannot reach. Nordstrom will continue expanding whenever it see any opportunities and pushing out the out suppliers all through the value chain in case they believe that it will give them the opportunity of providing better quality products and services to the consumers.

Technology strategy

Developing and successfully leveraging the technology at their disposal is certainly at the front of the executive's minds at Nordstrom. During the 1990s, Nordstrom started putting more effort in invest in technologies with the aim of empowering their employees. The investments considered included Nordstrom.com and long-term inventory system encouraging Nordstrom to offer a consistent multi-channel experience on its 2002 vision.While many brands are heavily invested in new technologies, active on all the right channels, and committed to using digital media as a way to engage with consumers, few manage to connect technologies, platforms, and channels to the same extent as Nordstrom. Currently, E-commerce is the fastest growing line of business for the company. Additionally, the firm is making investments in the web customer checkout and interaction plus the speed of the order fulfillment and delivery. Nordstrom is also a leading retailer in digital wallet technology. Nordstrom is investing in supply chain software to improve its handling of online orders. The stake in this company would allow them to fulfill some online orders without sacrificing profits as it reduces retailers costs requiring them to hold less inventory. Furthermore, the company offers a cloud service, which makes it easier for the suppliers to ship orders directly through their various retail partners. For instance, in case a consumer purchases a handbag through Nordstroms website the order is routed to the manufacturer who then ships the product from its warehouse to the premises of the customers. This method of is referred to as drop shipping.

Nordstroms investment in the technology company comes as retailers are racing to compete with e-commerce companies such as Amazon.com to provide convenience and speedy delivery to customers while keeping costs down. Excellent customer service is a strategy that is practiced in the culture of the company, having significant backing by technological innovations. For instance, the company recently introduced a mobile point for selling capacities that enables the consumers to check the products of the company wherever they may be which reduces the issue of queuing and reducing the issue of second thoughts about purchase or even transaction abandonments. The introduction of mobile point of sale was effective in that the company experienced a 15%increase in the sales of first quarter in 2012. The other examples of clients experience that are enhanced by this technology includes the issue of keeping a personal book for all the clients of Nordstrom. The technology is important because it tracks the personal information and transactions of the consumers have made from a retailer. This strategy enables the marketing team of the organization to do various activities that impress the consumers including sending birthday messages and making excellent recommendations for the clientsthrough the email marketing campaigns. The company has also managed to appeal the important audiences through Twitter with more than 540,000 followers. Nordstrom is one of few brands who actively participate on Reddit brand forum. Nordstrom also uses Pinterest to gauge consumer opinions and measure the popularity of their products. The company launched new e-commerce platforms to cater to specific user needs, such as mens brands Bonobos and Trunk Club, and the retailers dedicated flash sale site, HauteLook. Nordstrom has taken an ongoing, committed approach to delivering Omnichannel digital experiences. Nordstroms app is also integrated with both Nordstrom.com, the retailers inventory management system, which enables users to check stock levels for the ite...