Strategic Management Comparison Between Walmart and Nordstrom

Strategic Management Comparison between Walmart and Nordstrom

Qing Wang

Westcliff University

Bus 525

Prof. Saouli

04/30/2016

Table of Contents

Table of Contents        

Mission Statements        

Competitive Strategies        

Long-term Strategies for Growth and Sustainability        

References        

Strategic Management Comparison between Walmart and Nordstrom

Walmart stores is a US based multinational retail company as well as the largest retailer in the world in terms of revenues and number of employees. It is also the largest private employer and one of the most valuable companies in the world. Walmart was founded at July 2, 1962 by Sam Walton and has been controlled by the Walton family since then. As of March 31, 2016, it already has 11,527 locations worldwide. As of 2015, the number of employees is over 1.4 million in the U.S. and 2.2 million in the world. Walmart’s main inventory includes home and furniture, electronics, movie and music, health and beauty, pets, sporting good, jewelry, toys and grocery etc. Its main competitors include: Costco, Dollar General, Dollar Tree, Kohl's, Macy's, Sears, Target and many other companies.

Nordstrom is a leading fashion specialty retailer as well as the largest fashion retailer in the Western U.S. It was founded at 1901 by John W. Nordstrom and Carl F. Wallin at Seattle. At the beginning, Nordstrom was a shoe retailer until 1958 and then it started expanding based on customer service and now it has become a full inventory fashion retailer which sells shoes, clothing, handbags, cosmetics, jewelry, accessories etc. Apart from 121 full-line stores in the U.S. and Canada, Nordstrom also operates 200 clearance store Nordstrom Racks, 5 personalized styling service Trunk Club, 2 Jeffrey boutiques and an online private sale site HauteLook.com.  

Mission Statements

Mission statement is normally use to describe an organization’s purpose of being. Walmart’s Mission statement is “saving people money so they can live better”. It is synonymous to the company’s slogan, “Save money, Live better”. It is apparently a customer-oriented mission statement. It clearly tells people that they can save money by shopping at Walmart which is its biggest competitive advantage. I have been shopping at Walmart for years and my experience well matched with my expectation to Walmart. It has planted the impression of “cheap store that sells everything” in customers’ mind and became the very first choice when people need to shop. However, I also feel that the mission statement is too short and should include more values of the company. It provides little information as to what is the core purpose of the business (Jurevicius, 2013) but only contains customer and self-concept components.

 Nordstrom’s mission statement is “In store or online, wherever new opportunities arise, Nordstrom works relentlessly to give customers the most compelling shopping experience possible. The one constant? John W. Nordstrom's founding philosophy: offer the customer the best possible service, selection, quality and value.”  My first impression of Nordstrom’s mission statement is that they really care about customers and focus on providing customer great services and experience. Not like some other companies, customer services is just the name of a department, Nordstrom has seen it as a vital means of achieving strategic competitive advantage (Adams, 2013). With my experience of shopping at Nordstrom, I can see that customer service is part of its culture.

Both of their mission statement has been developed and refined for decades to show the world who they are and what they do. A successful mission statement can create a strong image in customers’ brain, at the same time, set their expectation to your business. To make sure that you can meet the expectation is a key to build customer loyalty and create competitive advantage.

Price Points & Positioning

Strategic positioning is what separates a company from its competitors, also is a key component of a successful business strategy.

Walmart’s general strategy is to place itself as the low-cost leader when compared to its competitors. With no doubt, Walmart has built an image that make customers believe that they can trust Walmart has the lowest price for a product. This is their brand promise, which can also tell from their mission statement. On the other hand, Walmart does not have a good reputation on customer services as well as employee treatments. However, Walmart has never included customer service to its brand promise so customers wouldn’t expect outstanding services from Walmart like they would expect from other store like Nordstrom. Therefore I believe the experience wouldn’t affected by its customer service too much.

Nordstrom positions itself as an upscale fashion merchandise as well as a leader in customer service. On top of that, it has implemented omnichannel for years. Its multi-channel allows salesperson to have the ability to help a customer find a specific product that is not available in this store from another location. On top of that, the multi-channel includes full price stores (Nordstrom), full price online stores (Nordstrom.com), off price stores (Nordstrom Rack) and off price online store (HauteLook.com).

To properly position and differentiate a company from its competitors is one of the most difficult part of strategic management. In order to let people know you, remember you and choose you when they need products or services your business provides, you need a unique value that help you stand out from others. I believe both Walmart and Nordstrom has achieved it.

Competitive Strategies

Walmart’s first competitive strategy is low-cost leader and it has successfully been known for its low prices of goods and services. In order to maintain the low prices, Walmart has to keep high sales volume, large-scale operations and low operating costs (Ferguson, 2015). These bring up the other competitive strategies. Differentiate strategies is another one of Walmart’s main strategy which make sure to provide its customers products in a price and warranty that none of its competitors can offer. Other than that, Walmart also created other strategies includes: become a truly global company; understand the business challenges that retailers will face and solve them; Play an even bigger leadership role on social issues that matter to our customers; Keep our culture strong everywhere (Ark, 2010).  The general strategies are the same between its “bricks-and-mortar” and its online stores. However, the major competitors is a little bit different. For Walmart.com, one of its major competitor is Amazon. In order to compete with Amazon, Walmart is trying to providing a great user experience that stretches from the online store, to mobile site and in-store shopping (Milnes, 2015). Basically customer can order online and go pick it up immediately in store which is something that Amazon couldn’t achieve. Also, customer can find a product location in the store by its mobile application. After all, the brick-and-mortar is Walmart’s biggest competitive advantage.