Competitive Intelligence and Benchmarking
Nordstrom and the U.S. Department Store Industry
Alexander Bognot
Operations Analysis
Nordstrom Inc.
Competitive Intelligence and Benchmarking
Part 1: Industry Analysis
Step 1: Industry Trend Analysis
Step 2: Concentration and Competition Intensity
Step 3: Value Chain Analysis
Part 2: Competition Positioning Analysis
Step 1: Profit Frontier
Step 2: Enterprise Ranking
Step 3: KPI Examination
Part 3: Enterprise Diagnosis
Step 1: Strengths and Weaknesses
Step 2: Value Driver Analysis
Step 3: Breakdown Analysis
Industry Classification
Nordstrom Inc. will be classified under the Department Store Industry
Will compare the Apparel Retail and General Merchandise stores with the Department Store industry
Will compare Dillard's Inc., Kohls Corporation, and Macy's Inc. with Nordstrom Inc.
Part 1: Industry Analysis
Step 1: Industry Trend Analysis
Step 2: Concentration and Competition Intensity
Step 3: Value Chain Analysis
Step 1: Industry Trend Analysis
Will evaluate the industry trend of Apparel Retail, Department Stores, and General Merchandise Stores based on industry size and profitability.
Step 2: Concentration and Competition Intensity
Will evaluate the competition intensity by measuring how multiple companies within the same industry apply tension on one another, specifically by comparing the market share analysis of various companies within the industries of Apparel Retail, Department Stores, and General Merchandise Stores.
Step 3: Value Chain Analysis
Will conduct a value chain analysis on the industry of Department Stores (U.S. and Global) to evaluate which other types of industries are involved in this supply chain.
Part 2: Competition Positioning Analysis
Step 1: Profit Frontier
Step 2: Enterprise Ranking
Step 3: Key Performance Indicator Analysis
Step 1: Profit Frontier
Will evaluate the most profitable companies in each revenue class and determine the competition's positioning in terms of profitability, specifically by looking at:
Step 2: Enterprise Ranking
Will examine a company's placement (in this case, Nordstrom Inc.) in relation to other companies using various metrics. Will assess Nordstrom Inc.'s financial measures (total revenue and net margin) against Macy's Inc., Kohl's Corporation, and Dillard's Inc.
Step 3: Key Performance Indicator (KPI) Analysis
Will evaluate the activities that are essential for firms to achieve their intended goals.
Part 3: Enterprise Diagnosis
Step 1: Strengths and Weaknesses
Step 2: Value Driver Analysis
Step 3: Breakdown Analysis
Step 1: Strengths and Weaknesses
Will evaluate how competitive the company is in the market by determining the company's strengths which are internal techniques that work well, as well as determining weaknesses that need to be improved upon.
Step 2: Value Driver Analysis
Will identify the drivers and levers that may directly affect the company's performance metrics, including assets, margins, and operating cash.
Step 3: Breakdown Analysis
Will compare firm's revenue breakdown, assets, and liabilities before, during, and after the Covid pandemic to diagnose root causes for its problems.
Observations and Analysis
The Apparel Retail industry and Department Stores industry both suffered losses in total revenue, operating income, and total net income in 2020, likely a result of the pandemic. The General Merchandise Stores industry did not have as a significant impact from Covid as the other two industries.
Nordstrom Inc. ranked 3rd in total revenue among the 4 companies evaluated in the Department Stores industry.
Nordstrom, Inc. had a very low net profit margin and return on assets, indicating either a significantly reduced revenue, ineffective cost structure, or poor pricing strategies.