Investment Project of Nordstrom Company

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Nordstrom Company comprises of departmental stores in America with its headquarters in Washington. John W. Nordstrom established the company in 1901 (Spector, 2017). During that time, the company was dealing with shoe retailing. The company has advanced over time to deal with cosmetics, jewelry, handbags, clothing, accessories, handbags and fragrances. Some stores deal with home furnishings and wedding facilities. The company comprises of 349 branches which are operating in the United States, Canada, and Puerto Rico (Spector, 2017). This advanced firm serves its customers' needs through websites such as and (Spector, 2017). This research work is presentation of the project that covers the project description, investment project resources together with justification of the project.

Description of the Project

Nordstrom intends to expand its stores to Hong Kong, a project whose estimates of capital is $45000000. The expanded branch to Hong Kong will require shipment of various cosmetics. Various kinds of cosmetics that Nordstrom deals with have different costs. For instance, different varieties of MAC cosmetics varies in cost per unit, prime skin smoother costs $16.75, cream blend blush for $13.97, dual lash comb for $4.75 (Kopelman & Chiou, 2012). Besides, huggable lip color for $10.97, mineralize foundation for $20, casual color for cheeks and eyes for $ 13 and pro past twisted lash for $13 (Kopelman & Chiou, 2012). The average cost of the rest 93 kinds of cosmetics that Nordstrom deals with is $10. A shipment of a whole container of 10 tonnes net is $ 4 million (Kopelman & Chiou, 2012).

Besides, Nordstrom needs to extend its sale of handbags to Hong Kong. It deals with a various variety of handbags with different prices. The sale of handbags target the ladies population who term it fashionable to own one. The cost per handbag that Nordstrom deals with varies. For instance, leather crossbody bag costs $ 895, removable shoulder bag costs & 570; leather satchel costs $800, a leather wallet which is small trifold cost 195 and flower applique cross body bag costs $600 (Kopelman & Chiou, 2012). In addition to this, rogue leather tote costs $500, block leather rogue color costs $ 800, the swagger chain leather cross body bag costs $6oo, and cross body clutch metal tea leather handbag costs $ 500 (Kopelman & Chiou, 2012). The average cost per item of sixty different kinds of leather handbags that Nordstrom intends to ship to Hong Kong costs $600 per item (Kopelman & Chiou, 2012). This implies a shipment of a whole container of thirty cubic meters would cost $ 5 million.

The market for jewelry is booming especially when Nordstrom company target to reach for women and young girls, men kids who wear this jewelry and also purchase them for home and gifts. The cost per item of jewelry that Nordstrom deals with varies. For instance, the cost per gold bracelet cost $ 400, disk pendant Necklace design for Dana Rebecca costs $ 300, semiprecious stone and diamonds cost $700, Lana Jewry Blake chain necklace costs $ 400, and David Yurman bracelet costs $500 (Kopelman & Chiou, 2012). In addition to these kinds of jewelry, oval large David bracelet costs $500, thin bracelet David Yurman costs $1000, Gucci icon thin band ring costs $800, and small kick-off bracelet costs $1000. The average cost per other ninety-three varieties of jewelry costs $ 600 (Kopelman & Chiou, 2012). Each piece is enclosed in a package that is about 0.01 meters cubed box (Kopelman & Chiou, 2012). This implies that shipment of a thirty cubic meters container would cost $ 6 million.

Besides, Nordstrom also intends to extend its market for clothing to Hong Kong. Nordstrom Company deals with dresses, sweaters, plum-size, petite, bottoms, active wear, coats and jackets, swimwear, jeans, maternity clothing, jumpsuits, and rompers (Kopelman & Chiou, 2012). The cost per item of clothing that the company deals with varies. For instance, the cost of a halter bikini top is $12, tropical Bikini Top costs $16, Isabella rose costs $30, bikini lab costs $ 14, Becca covers up dress costs $20, and Despi Swimwear cost $25 (Kopelman & Chiou, 2012). The average cost of the other 90 kinds of clothing that Nordstrom deals with is $ 20 (Kopelman & Chiou, 2012). This implies that shipment of a thirty cubic meters container of clothing to Hong Kong would cost $6 million.

Also, Nordstrom intends to expand its market for Fragrances to Hong Kong. Fragrances cater to the needs of both male and female populations. Various kinds of fragrances have different costs. For instance, the cost price of Narciso Rodriguez spray set costs $30, Issey Miyake costs $40, and Burberry toilet spray costs $25, Michael crosses perfume costs $65, Donna Karan love rollerball perfume costs $15, and Gucci Flora costs $65 (Kopelman & Chiou, 2012).  Besides, Calvin Klein Euphoria piece set costs $55, Burberry for men spay goes for $35 and Burberry perfume intense costs $65 (Kopelman & Chiou, 2012). The average cost of the other ninety kinds of fragrances is $ 40. This implies that shipment of a whole container of fragrances would cost Nordstrom Company $ 8 million (Kopelman & Chiou, 2012).

Besides, Nordstrom Company also intends to extend its market for accessories in the extended project to Hong Kong. These accessories include ties and pocket squares, tech accessories, backpacks, cold weather, wallets, belts and suspenders, sunglasses and eyewear, belts and cufflinks (Kopelman & Chiou, 2012). Accessories appear in different kinds which goes for a different cost. For instance, Johnston and Murphy's leather belt cost $25, Rawlings that are home run trifold costs $15, Herry Hansen gift set costs $20 and calibrate Hoss Textured ties of silk costs $15 (Kopelman & Chiou, 2012). The average cost of the other ninety kinds of accessories that Nordstrom deals with is $20. The estimated cost price of shipping a whole thirty cubic meters of accessories would cost $ 6million (Kopelman & Chiou, 2012).

Investment Project Resources

The project to extend the market for Nordstrom products to Hong Kong will require various resources. For instance, it would require a loan resource of $45 million (Zarley & Yan, 2013). Out of this amount, $35 million will be used to furnish the stores with products which include fragrances, accessories, and the other aforementioned. In addition, the project will also require physical resources which includes premises at an estimate cost of $3 million, three company cars for top-level executives at a cost of $1.2 million, company van for transportation of products to the required destinations at a cost of $ 800 and internal business facilities which includes air conditioners, furnishings and decorations at a cost of $700 (Zarley & Yan, 2013). Also, the company needs financial resources for registering its business name in Hong Kong, establish a telephone line and printing business cards (Zarley & Yan, 2013). The approximated cost of these financial resources is $500.

Besides, the company requires human resources. Human resource can be classified into three groups which are top-level executives, highly trained and semi-trained workers. Top-level executives would include company lawyer, CEOs, and departmental managers. The skilled workforce would comprise of specialized workers like the salespersons, staffing personnel staffing personnel. The estimated hiring costs of these workers are $ 2million per annum (Zarley & Yan, 2013). Top level executive will be outsourced from established branches in America so that they can use their experience and expertise to pace set the trend of the firm in Hong Kong (Zarley & Yan, 2013). Nordstrom Company prepares to hire both skilled and semi-skilled personnel from Hong Kong. Also, the firm intends to start information system and information technology at the cost of $1 million (Zarley & Yan, 2013). Altogether, Nordstrom requires a loan of $ 45 million which it seeks through a loan.

Investment Project: Time Frame

Nordstrom Company intends to carry out the extended Market plan once it acquires the finances, precisely within 2018 (Christesten, 2013). The anticipated economic life of the extension plan is beyond 200 years. However, some of the resources such as physical resources and technological resources are not expected to last more than 15 years before they become obsolete due to technological advancement. To keep with the current consumer tastes and preferences, the company will be flexible to adjust to adapt when the need arises (Christesten, 2013). For instance, the premises can get outdated after twenty years making the firm to appear old-fashioned. Nordstrom Company will make these changes to steer it in the long run. However, the company can exit the market due to trading insolvency which arises when a company operates at a deficit, if there are political crashes in Hong Kong and if the company suffers from consistent loss-making.

Nordstrom Company should make this investment due to its financial stability. From the company's monetary metrics, the percentage of COGs was regular from 2015 to 2016 and projects forward for that value (Christesten, 2013). This implies that the company has the potential stamina to expand its market for overseas countries like Hong Kong. Besides, impaired expenses did not influence in 2016. Also, Nordstrom has succeeded regarding pop-up departments. Expansion in Hong Kong will be fruitful especially in regards to the costs of real estates. From the already data from 2015, it can be presumed that sales will continue to grow in the 4% range (Christesten, 2013). Another assumption that we can get from financial metrics is that there will be savings in shipping costs (Christesten, 2013). Apparently, financial metrics portray a potential for the company to extend its market to Hong Kong.

Justification: Why Now

From the global perspective, marketing on a worldwide scale enhances competitive advantage from differences in global operations, helps one to know the company's strengths and weaknesses and its opportunities to achieve global objectives (Parzihgar, 2013). It is a revolutionary shift for firms to extend their markets into a global market. Certainly, Nordstrom Company needs to extend its market to Hong Kong to be in line with this current global direction of multinational trade (Parzihgar, 2013). Besides, the market for comforts and luxuries is getting higher in the global market than in subsequent years (Christesten, 2013). People are moving towards adding beauty to almost everything they do. The fact that Nordstrom deals with luxurious goods place it right position to thrive in extended markets.

To sum up, there are external financial conditions that favor the move for Nordstrom to market in Hong Kong. For instance, economic factors which associate with the rise of living standards across the globe (Parzihgar, 2013). Consequently, there is increased demand for products which offer an opportunity for businesses to generate profit. Hence, the increase of living standards across the globe results into high demands for Nordstrom Company products (Parzihgar, 2013). To sum up, there are changes in social structures across the globe. Lifestyle patterns are raising the level of preference for comforts and luxuries where almost everyone terms these products fashionable. All the same, technological advancement is a boaster to firms that embrace it (Parzihgar, 2013). Nordstrom is in the forefront regarding using the current technology in its promotional and operational strategies. Nordstrom should seize the opportunity to extend its market in the current period.

Strategic Fit: Priorities

The organizational priorities of Nordstrom are to keep committee to its customer satisfaction. The firm has a notion of increasing sales through improved customer service (Spector, 2017). After understanding the priorities of the firm, the individuals keep themselves at task to deal with their unique tasks of enhancing customer satisfaction. Leaders help their teams to solve challenges thereby strengthening rather than diluting the central organizational priorities (Spector, 2017). Customer satisfaction has made the company make huge sales between the year 2015 and 2017 (Spector, 2017). Form financial statements of Nordstrom, sales have grown with a positive rate of 4% since 2015 (Spector, 2017). Extension plan to Hong Kong would consequently facilitate improvement in sales volume, which is the financial priority of Nordstrom Company.

Strategic Fit: Macroeconomics

Globally, customers have the most significant microeconomic influence on a company. Secondly, employees should sell a product that would steer the company into a success (Steers, 2014). Besides, distribution channels are deemed as the most vital tools to reach the customers. Also, the level of competition signifies the level of demand for the product. On the same, shareholders and investors are very important as they fund the firm and ensure its growth. Media and coverage to the general public are also very important microenvironment factors. Strategically, Nordstrom addresses these factors with great concern (Steers, 2014). For instance, it the management stresses on employee satisfaction and promotion strategies of their products. Hence, Nordstrom priorities fit in microenvironment environment.

Strategic fit: core competencies

The success of Nordstrom Company lies in rendering services which are superlative. Associates are compelled to perform like entrepreneurs and establish a strong interpersonal relationship with them (Benson & Noble, 2015).). The company also values its workers and treats them as the most valuable resource (Benson & Noble, 2015).). The act of extending the market exploration to Hong Kong would give the employees a new experience and help them to gain skills in dealing with new challenges (Benson & Noble, 2015). The expansion will be enhanced by committed employees who are motivated to keep to the task and would also enhance the establishment of royal customers in Hong Kong.


Nordstrom Company is a successful American Company. Its new project entails extending the markets for its products in Hong Kong. These products include accessories, fragrances, clothing, jewelry, handbags, and cosmetics. The cost of these products would sum to $35 million added to other costs like shipments, physical factors which would sum the cost to $45 million. From the financial metrics, the company has the advantage to carry out the plan.  For instance, the sales of the company have been rising since 2015, meaning that the Nordstrom is in a better position to steer the growth of its branch. Currently, the global market for comforts and luxuries is high, implying that Nordstrom will reap a lot of benefits if it executes the plan immediately. The project considers microenvironment and enforces the core competencies of the company.


Benson-Armer, R., Noble, S., & Thiel, A. (2015). The consumer sector in 2030: trends and questions to consider. Consumer packaged goods and retail.

Christensen, C. (2013). The innovator's dilemma: when new technologies cause great firms to fail. Harvard Business Review Press.

Kopelman, R. E., Chiou, A. Y., Lipani, L. J., & Zhu, Z. (2012). Interpreting the success of Zappos. com, Four Seasons, and Nordstrom: Customer centricity is but one‐third of the job. Global Business and Organizational Excellence, 31(5), 20-35.

Parhizgar, K. D. (2013). Multicultural behavior and global business environments. Routledge.

Spector, R. (2017). The Nordstrom Way to Customer Experience Excellence: Creating a Values-driven Service Culture. John Wiley & Sons.

Steers, R. M., & Nardon, L. (2014). Managing in the global economy. Routledge.

Zarley Watson, M., & Yan, R. N. (2013). An exploratory study of the decision processes of fast versus slow fashion consumers. Journal of Fashion Marketing and Management: An International Journal, 17(2), 141-159.

January 19, 2024

Business Economics Life

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Company Investment

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