Tayabur Rahman

Id: 2021685

Ans no: 1 (a)

Nordstrom has been following a niche segmentation strategy. Their focus is mainly on a
relatively economic affluent customer base which is looking for affordable luxury in their
lifestyle. People who have less money issue and want to avail a brand product are the main target
segment of Nordstrom.

Ans no: 1 (b)

Since they are doing business on focus group or niche market to avail a particular economically
solvent group of customers, they have been offering several values to their customers to ensure
their standard. They provide exceptional customer service, selection, quality, and value. Their
stores are located in the upscale areas, they offer expensive fittings and fixtures, browsing in
stores that carry an impression of luxury in their customers’ minds. They also offer live music
played on a grand piano help create an appealing atmosphere. Nordstrom’s fashionable and of
high-quality products & legendary excellence in customer service made them a premium brand
in USA.

Ans no: 1 (c)

Nordstrom is pursuing Focus differentiation business level strategy according to Porter’s model.

Focus differentiation strategy means when a company targets a particular segment of customers
or niche customers which allows customized offerings to that particular customers to fulfill their
special needs with different features and functions.
Nordstrom is a very popular fashion retailer company which offers premium shoe collections to
its customers with different value-added offerings. Their products are one type of luxurious
fashion product which is basically shoes and their quality, features, customer services are unique
and satisfying. They offer different premium shoe collections focusing on specific targeted group
of people who do not bother to expense their money to avail their needs. Their customer service
is legendary and unquestionable which is agreed by its fan base. They do not target to any
random customer and offer general product & service. Their market is well recognized and
specific within a certain level of economic group.

Ans no: 1 (d)

Functional-level strategy aims at improving the efficiency of a company’s actions and its
capability to achieve higher effectiveness, superiority, innovation, and customer responsiveness.

Nordstrom has been following several actions to implement its strategy in the long run to be the
unique in the industry and in the customer’s mind. Let’s talk about those a bit:

Nordstrom’s salespersons are classically well trained and outfitted, well-mannered and
cooperative, and known for their courtesy to detail. They are being recruited for their capability
to interact with their customers is such a positive way which makes those customers lifetime fan
of the brand. This is big functional level achievement for any company competing in the
industry. While recruiting those employees, they have been asked about their ideas regarding the
best customer services.

They offer different value-added services to their customers beside just selling their premium
products like thank-you cards, home deliveries, personal appointments, and access to personal
shoppers etc. Their return policy is quite good and impressive since they ask no receipt while
returning the products. They believe that, customer is always right which created a high
impression in their fanbase. They offer their sales persons good amount of commission in term of
their volume of sales. The organization chart is an inverted pyramid, with salespeople on the top
and the CEO at the bottom so we can easily understand how much value they give to their root
level employees so that the even sales person never feels lower and always feel motivated and a
part of the company’s success.
 Ans no: 1 (e)

A competitive advantage is what makes an entity's goods or services superior to all of a

customer's other choices.

It includes differentiating the product by customizing it, where possible, to the requirements of
the individual customer, reducing the time it takes to respond to or satisfy customer needs.

Now if we want talk about the source of Nordstrom’s long-term, sustainable competitive
advantage, we need to find out valuable and rare resources Nordstrom has that its rivals find
difficult to imitate.

Nordstrom first of all has customer’s trust which is the most important thing to do business in
long run. This trust they gained by years through delivering the best possible customized
products with a premium quality, features and brand value constantly. This is, most of the time,
really tough for any company in the market. Otherwise, all the companies could survive with
high profit in the market. Their quality is unquestionable. Their target segment is fixed and
limited. That means, they offer products to a specific group of people who can be monitored,
satisfied and retained easily irrespective to the mass people. This helped them to gain
competitive advantage in the industry.

Now, if we talk about their customer service or after sales service, that is also unique and
astonishing. They offer different value-added services to their customers which is often
impossible for their competitors due to their many internal limitations. But Nordstrom has been
constantly providing the same services and after sales services since long.

They also select their employees, train their employees and motivate their employees in a way
which is quite impressive and most of their competitors do not follow or can not follow in the
long run but Nordstrom has been following constantly. They groomed their employees teaching
them the appropriate salesperson’s manner and motivate them by giving sales commission and
giving them top place in the hierarchy pyramid of the organization. This generates sales more
undoubtedly.

These issues gave Nordstrom a unique and unbeatable competitive advantage than its rivalries.
 Ans no: 2

Value chain refers to the idea that a company is a chain of activities. This chain of activities
transforms inputs into outputs that customers value. The transformation process involves two
types of activities:

1. primary activities and

2. Support activities

These two activities add value to the products or services.

Being a strategic consultant of the Bubble Tea Café, my proposal to design a value chain of her
proposed café consists these two types of activities. Let’s discuss a bit below:

Primary Activities: primary activities include below activities:

a. Inbound logistics: It includes functions like receiving, warehousing, and managing

inventory. Bubble Tea Café needs a dedicated place to receive its raw materials,
managing the supply chain smoothly.
b. Operations: Bubble Tea’s operation includes procedures for converting raw materials
into a finished product which means a procedure of shaking with ice to create the
"bubbles", a foamy layer on top of the drink; chewy tapioca balls are added as well. Ice-
blended versions are frozen and put into a blender, resulting in a slushy consistency.
c. Outbound logistics: Bubble Tea’s outbound logistics includes activities to distribute a
final product to a consumer which includes a place where Ms. Tina can offer her products
to the customers. She decided to establish her café in Dhaka.
d. Marketing and sales: This activity includes strategies to enhance visibility and target
appropriate customers—such as advertising, promotion, and pricing. She needs to have a
clear strategy for her customers to boosts up her sales. She needs to develop an
advertising plan, promotion plan and pricing strategy to attract customers.
e. Service: Service includes programs to maintain products and enhance the consumer
experience—like customer service, maintenance, repair, refund, and exchange. She has to
 fix her customer service plan, plan for overall business maintenance, plan on how to
exchange her sold products etc.

Support Activities: Bubble Tea café’s activities include below activities:

a. Procurement: It concerns how a company obtains raw materials. So, Ms. Tina’s
procurement strategy and activities will be considered here. How she will confirm her
raw materials for the business.
b. Technological development: It is used at a firm's research and development (R&D)
stage- like designing and developing manufacturing techniques and automating
processes. Ms. Tina has to ensure this activity to survive in the market in the long run.
c. Human resources (HR): HR management involves hiring and retaining employees who
will fulfill the firm's business strategy and help design, market, and sell the product. Ms.
Tina has to ensure a good people management in her business to run her café smoothly
otherwise customer will turn their face away.
d. Infrastructure: It includes company systems and the composition of its management
team—such as planning, accounting, finance, and quality control. Ms. Tina needs to have
well defined departments in her café to run the business smoothly.