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Tutorial 6 Chapter 5: Business-Level Strategy: Task 2 Case Discussion Questions 3,4 and 5. Pg. 168-169

Nordstrom pursues a differentiation strategy by focusing on providing an upscale shopping experience for affluent customers. It differentiates itself through high quality merchandise, well-trained salespeople, a no-questions-asked return policy, and luxurious store environments featuring live music and fancy fixtures. This strategy allows Nordstrom to charge higher prices and withstand pricing pressure from competitors despite carrying niche and luxury products.

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113 views

Tutorial 6 Chapter 5: Business-Level Strategy: Task 2 Case Discussion Questions 3,4 and 5. Pg. 168-169

Nordstrom pursues a differentiation strategy by focusing on providing an upscale shopping experience for affluent customers. It differentiates itself through high quality merchandise, well-trained salespeople, a no-questions-asked return policy, and luxurious store environments featuring live music and fancy fixtures. This strategy allows Nordstrom to charge higher prices and withstand pricing pressure from competitors despite carrying niche and luxury products.

Uploaded by

Ong CH
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Tutorial 6

Chapter 5 : Business-Level Strategy

Task 1
1. Define the generic business-level strategies companies pursue.

2. Compare the main differences between low-cost strategy and a differentiation strategy.

3. Explain why is market segmentation is an important step in the process of formulating a


business-level strategies.

4. List the features that need to be included to improve differentiation.

Task 2
Chapter 5 Closing Case: Nordstrom
Case Discussion Questions 3,4 and 5. Pg. 168-169.
Chapter 5 :Hill,C.W, Schilling,M.A and Jones, G.R. 2017. Strategic Management: Theory &
Cases: An Integrated Approach, Asia Edition, 12th Edition. Cengage Learning.
Q3. Using the Porter model, which generic business-level strategy is Nordstrom pursuing?

Nordstrom is approaching to the niche market and emphasizing the differentiation strategic.

Niche market - Nordstrom has many, smaller, independent customers will have an easier time
charging higher prices to increase profitability. For example, Nordstrom is a niche company
which focuses on a relatively affluent customer base that is looking for affordable luxury. 

Strategic emphasis differentiation – Nordstrom’s salespeople are typically well groomed and
dressed, polite and helpful, and known for their attention to detail. They are selected for their
ability to interact with customers in a positive way.

Absorb price increases from customers without losing market share - Nordstrom’s
philosophy is that the customer is always right whereby no-questions-asked returns policy, with
no receipt required.

Withstand pricing pressure from powerful buyers and increasing prices without buyer
resistance - The stores, located in upscale areas, have expensive fittings and fixtures that convey
an impression of luxury. The stores invite browsing. Touches such as live music played on a
grand piano help create an appealing atmosphere. The merchandise is fashionable and of high
quality.

Withstand substitute goods, as a result of brand loyalty - Nordstrom has not neglected
operating efficiency. Sales per square foot are $400 despite the large, open-plan nature of the
stores, and inventory turns exceed 5 times per year, up from 3.5 times a decade ago. These are
good figures for a high-end department store.

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