The significant microeconomic factors that may impact Nordstrom global expansion to China would involve the state of the economy, industry competition, and the price elasticity of its products. Concerning microeconomics, a downturn or financial subsidence may influence Nordstrom's business since fewer customers are probably going to search for excellent things in their stores and on sites (Nordstrom, 2016). China is still principally overwhelmed by national and local chains much the same as how Department Store retail was in the United State where Nordstrom could set up a successful cross-border e-commerce channel; this ultimately, gives the organization preference to picking up a dependable balance all through China. As a key segment of a …show more content…
Price elasticity is a risk that Nordstrom may encounter since it is often difficult to predict how customers will respond to price changes which can impact a retail item’s rate of sale (Gallo, 2015). The worries over these kinds of arrangements, make these exchange of expenses of shipping merchandise to the buyer for all intents and purposes unthinkable in the whole district which makes the need to make calculated systems to lessen the cost of delivery stock to stores a fundamental. The idea of price elasticity is for the most part estimated at a rate change of how much a buyer will purchase if the cost of an item expands (Gallo, 2015). Besides, neighborhood retailers than to have a superior comprehension of pricing strategies to attract customers to brands that consumers are familiar; for Nordstrom, the organization must offer comparable adaptability and brands to stay aggressive. At last, Nordstrom must have the capacity to assess the flexibility of interest keeping in mind the end goal to make suitable changes expected to remain aggressive and enhance general
The industry we have chosen is the department store-retail industry. Within this industry, we have chosen the department stores of JCPenney and Macy’s. We find this industry, as well as these two companies, interesting from a strategic perspective. JCPenney has recently undergone a massive strategic restructuring in regards to its pricing, brand offerings, and store layout, pushing it away from the typical department store strategy of discounts and coupons. Its new strategy has become much closer to Wal-Mart’s strategy of every day low prices. Macy’s, on the other hand, has restructured with a push from the economic
This report presents data describing the differences amongst the two department stores, their fundamental visions, and comparative statistics. Macy’s or Dillard’s: Differences amongst these competitors There are several aspects you can analyze from each department store. Major pieces do set each one apart from the other. Brand names carried by Macy’s and Dillard’s from an average shoppers point of view can go completely unnoticed unless price is involved. For trend shoppers brand names can either make or break a retail store. It can easily determine if he or she will walk to Macy’s or Dillard’s because they already know the store does or does not carry that brand. This is consistent with each department throughout both stores and
More recently, the recession impelled many bricks-and-mortar retailers towards a damaging focus on discounting that eroded not only many stores’ price positioning but also any point of differentiation or exclusivity.
In this segment, the retailer J.C. Penney will be analyzed against the department store retail industry, with particular emphasis placed upon their competitors, Macy’s and Kohl’s. The major components to be discussed will include the general external environment (i.e. demographics, economics, politics, legal requirements, technologies and global expansion), the industry environment, the competitive environment, the driving forces and the key factors for success within the industry. In terms of the general external environment, the retail industry is a multi-trillion dollar business in the United States alone and maintains operations primarily due to consumer spending. Such purchases rely upon the disposable income of
Price Elasticity of Demand is the theory of elasticity that focuses on the relationship between the price and the demand for a good or service. The study of how sensitive consumers are to a price change, is the study of Price Elasticity of Demand (Anderson). The idea is that when there is a change in the price of a good or service the demand will also change. In order to predict consumer behavior suppliers will study the consumer’s responsiveness to price change. Price Elasticity of Demand is measured by a difference in percent changes. The difference between the percent change in demand and the percent change in price (Anderson). If there is a larger respond in the amount demanded due to the price change the good or
If the product coast a large percentage of the average consumer’s income, people will pay more attention to sale prices because they may be afraid of a fact that if the price keeps rising, they can’t afford it because it is expensive and costs most of their income. It is common that we spend more than $200 on one pair of Nike shoes, which are quite expensive. However, the price of bread is low. Furthermore, one pair of Nike shoes costs more percentage of clients’ income than a piece of bread. If the price declines, people would like to buy more Nike shoes because they can’t afford it in normal time. However, people won’t buy too much bread than before because the bread may go rancid quickly. So people are more sensitive to the price of Nike shoes. As a consequence, all Nike shoes sold in Canada have more elasticity than all bread sold in Canada.
In the previous Milestone One paper, the description of the proposed expansion project of Nordstrom, Inc. to China was discussed in detail. From the expansion itself, the shape of the project envisaged, the differentiation of the Nordstrom move from the many Western as well as Japanese and Korean retail giants who have preceded Nordstrom ( as people will definitely expect something different from Nordstrom), the competitive advantage which Nordstrom may gain from the project to the reasons behind the project as well as its appropriateness at that time, were discussed. The fit of the project in the organizational culture of Nordstrom as well its core competencies were also discussed thoroughly. Continuing in the same vein, this Milestone Two will concentrate on the risks and uncertainties of this expansion project, like any project, and will attempt to analyze all the risks that the proposed expansion project may face and what will the different scenarios be. Once an idea of the risks is obtained, then factors can be built in the expansion plans to counter high risks, or hedging can also be done if the risks are found to be high enough to justify the same.
In a day of, “I want it now and I’m willing to pay for it,” a shopping center has to offer a variety of stores, and also have several options. The shoe shopper will go to the place with 5 shoe stores before they go to the place with only 1. They may not realize that of the 5 available shoe stores; only 1 is in their price range, but satisfying a wider variety of consumers will help the mall broaden the shopper’s experience. But it is important to remember that shoppers are price sensitive, so not only do you need a variety of stores offering a variety of products, but you also need to be able to provide a variety of price points so you don’t limit your shopper demographics.
The price elasticity of demand shows the relationship that exists between the price of a product and the quantity demanded. The PED can also be used to calculate the effects of the change in product price on the amount of the product demanded. The rate at which a change in price affects the quantity demanded varies considerably. The PED coefficient
Companies in the retail industry operate in a high price elasticity environment as there is not much product differentiation to leverage. Buyers face almost no switching cost if they chose a substitute offering better value. On the contrary, large and diverse population making small purchases works in favor of the industry. No one individual or a small group has the power to significantly impact the industry, but overall buyers enjoy have a high bargaining power in the industry.
This is partially motivated by Ma’s acknowledgement that “the Chinese economy is slowing and that the company 's explosive gains in revenue and user additions in China have slowed.” While the Chinese market may still have some growth potential, reaching these massive goals will require global expansion to new markets. The US has a population of well over 300 million, and according to Pew Research, in the year 2015, 84% of American adults used the internet regularly (http://www.pewinternet.org/2015/06/26/americans-internet-access-2000-2015/ ), compared to China’s tightly restricted internet. Thus, Alibaba would be wise to expand into this country full of technologically active potential users. Relatedly, American firms Amazon and eBay both once sought a greater share in the Chinese e-commerce Market. Examining these companies provides an interesting lens for Alibaba’s potential expansion into the United States, as these companies faced a similar culture shock between China and the US. eBay attempted this entry in 2004, but failed due not comprehending the needs and wants of Chinese consumers (http://onlinelibrary-wiley-com.uml.idm.oclc.org/doi/10.1002/tie.21739/full ), while Amazon entered in 2004 by purchasing Joyo.com, a book and music vendor. Although Amazon did not flame out in the manner of eBay, its share of the Chinese e-commerce market has hovered down around 1.5%. Both Amazon and eBay encountered
After this analysis, we are going to take a look at the characteristics of the Chinese retail
2. Implications for each of the computed elasticities for the business regarding short-term and long- term pricing strategies.
Walmart and Carrefour are giant retailers. They have different perceptions in different markets. This case study focuses on these perceptions. Walmart failed in Chinese market since they lacked of convenient supply chains, adapting to cultural infrastructure of Chinese Market. Carrefour did some stuff better than Walmart. But Chinese market is not pretty beneficial market for both.
It is important to remember that no retailer, however clever, can design a strategy that will totally insulate it from competition. This is true even if the retailer has done an excellent job in developing and following its mission statement, setting its goals and objectives, and conducting its SWOT analysis; customer still have shopping choice. The rapid growth of discount department stores, convenience stores, and catalog and internet retails attest to this fact. Some merchandising innovations can be easily copied and