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Milestone Two: Risks
NEUROstorm by Nordstrom
P. Leanne Mahoney
MBA 640 Finance, Economics, and Decision
Dr. Brandon Foor
May 28, 2023
2
Milestone Two: Risks
IV. Risks
Internal
A significant internal risk for NEUROstorm by Nordstrom is the possibility of higher-
than-anticipated personnel and training expenses. As the concept store intends to cater to the specific needs of the neurodiverse community, the employees will need specialized training to comprehend and effectively meet those needs (Colley, 2023). This may incur additional costs for recruitment, training programs, and ongoing employee development. These increased costs can influence the financial projections by increasing the total operational expenses and possibly lowering the profit margins. To mitigate this risk, Nordstrom should undertake a comprehensive cost analysis and budget in order to precisely estimate the required personnel and training resources. Additionally, they can investigate partnerships with local organizations or institutes that specialize in training and supporting neurodiverse individuals, which can help reduce expenses and ensure effective employee development.
A further internal risk for NEUROstorm by Nordstrom is the possibility that customer adoption and revenue generation will be lower than anticipated. While there is significant market
demand for a retail environment that caters to the neurodiverse community, the concept store's success depends on attracting and retaining consumers. If the store fails to resonate with the target market or encounters difficulties in generating awareness and engagement, it may fall short of its projected revenue goals (Grand View Research, 2021). This can influence the financial projections by reducing expected sales and possibly resulting in losses. To mitigate this risk, Nordstrom should invest in extensive market research and consumer insights to comprehend
the preferences and requirements of the neurodiverse community in the United Kingdom. Additionally, they should develop targeted marketing and promotional strategies to effectively
3
Milestone Two: Risks
reach and engage their target audience. Regular customer feedback and satisfaction surveys can assist in identifying areas for enhancement and ensuring that the store consistently exceeds customer expectations.
External
Significant external qualitative risks that could affect the success of the NEUROstorm by Nordstrom project include cultural and political factors in the target country as well as natural disasters. These hazards can influence the financial success of the proposed investment in a variety of ways. For instance, cultural factors may influence consumer preferences and purchasing habits, which could impact demand for the NEUROstorm by Nordstrom product concept (Grand View Research, 2021). Political instability or changes in government regulations can also create uncertainty and have an impact on business operations, including import/export or labor laws (UK Government, 2021). Furthermore, natural disasters such as floods, earthquakes, and extreme weather can disrupt supply chains, damage infrastructure, and cause economic instability (Grand View Research, 2021).
To mitigate these risks, Nordstrom must conduct extensive market research and analysis to comprehend the cultural and political climate of the target country, in this case, the United Kingdom. This research can assist Nordstrom in identifying any cultural nuances or preferences that may influence the NEUROstorm concept's acceptance and/or success (McKinsey & Company, 2018). By understanding the political environment, Nordstrom can anticipate potential
regulatory changes and develop contingency plans to mitigate their impact (UK Government, 2021). Engaging with local experts and consultants can also provide insightful guidance for navigating cultural and political factors (McKinsey & Company, 2018).
4
Milestone Two: Risks
Nordstrom should develop a comprehensive risk management and disaster recovery plan for natural disasters. This strategy should incorporate measures to ensure the resilience of the supply chain, such as diversifying suppliers and establishing alternative distribution channels (Grand View Research, 2021). Additionally, adequate insurance coverage can help mitigate the monetary impact of natural disasters (Grand View Research, 2021). In addition, Nordstrom should invest in infrastructure and store design that take into account the specific risks of the target country, such as earthquake- and flood-resistant building structures (Grand View Research,
2021).
Microeconomic
The microeconomic factors that could influence Nordstrom's proposed investment in NEUROstorm are market competition and price elasticity. The retail industry in the United Kingdom can be highly competitive in terms of market competition, with numerous competitors competing for market share. To determine the potential challenges and opportunities of entering the neurodiverse retail market, Nordstrom must evaluate the existing competition and their market position. It is essential for Nordstrom to distinguish itself from competitors by providing a shopping experience that is unique and tailored to the needs of the neurodiverse community. By
providing sensory-friendly environments and individualized service, Nordstrom can gain a competitive advantage in this niche market (Grand View Research, 2021).
Another important factor to consider is price elasticity. Depending on how sensitive consumers are to price changes, demand for a product or service can fluctuate. In the case of NEUROstorm, Nordstrom must assess the price sensitivity of the neurodiverse community and ensure that the pricing strategy aligns with their willingness to pay. Through market research and
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