Nordstrom's Perpetual Inventory System

Case Studies | Case Study in Business, Management, Operations, Strategy, Case Study

ICMR HOME | Case Studies Collection

Case Details:

Case Code : OPER025
Case Length : 16 Pages
Period : 1994 - 2003
Organization : Nordstrom
Pub Date : 2004
Teaching Note :Not Available
Countries : USA

To download Nordstrom's Perpetual Inventory System case study (Case Code: OPER025) click on the button below, and select the case from the list of available cases:


For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Operations Case Studies
Case Studies Collection
View Detailed Pricing Info
How To Order This Case
Business Case Studies
Case Studies by Area
Case Studies by Industry
Case Studies by Company

Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

<< Previous

Inventory 'Mis' Management Contd...

Nordstrom sources claimed that the reason behind the lack of a focused inventory management strategy was that the company relied more on its excellence at customer service to lure customers than technological tools. Reportedly, the company believed that it was known across the world for its legendary customer service initiatives and not because of the way it managed its inventory. Ironically, leading business magazines BusinessWeek and Forbes blamed Nordstrom's excessive focus on customer service for its problems. While BusinessWeek said the company had failed to 'master the science of retailing,' Forbes reported, "Nordstrom has been slow to upgrade systems because it has chosen to spend resources on customers."2

Background Note

Nordstrom had its origins in a small shoe store 'Wallin & Nordstrom' (US) that began operations in 1901 in Seattle (US). The store was set up by Sweden's John W. Nordstrom and his friend Carl Wallin from Alaska. The duo had met in the late 1890s while trying to strike it rich in the Alaskan gold rush. Later on, they decided to enter into a partnership to put to use the money they made in Alaska. Since Carl Wallin was experienced in the business of shoes (he owned a shoe repair shop), they decided to open a shoe store.

Due to the duo's focus on offering quality, value-for-money merchandise and superior customer service, business flourished despite stiff competition from other local players. As the money poured in, the partners kept moving the store to bigger and better locations. The second Wallin & Nordstrom store was opened in 1923. In 1928, John W. Nordstrom handed over his stake in the business to his sons Elmer and Everett. The following year, Carl Wallin too sold his stake in the business to them. In 1933, John W. Nordstrom's third son, Lloyd, joined Elmer and Everett. The second generation Nordstroms decided to expand the selection of shoes sold in a major way by adding many new styles, sizes, colors and brands.

Over the next three decades, the business survived the Great Economic Depression and the Second World War, growing at a slow, but healthy pace. By the beginning of the 1960s, the number of stores had increased to eight, spread across Washington and Oregon.

Having made its mark in the country's shoe retailing landscape, the company began looking for avenues to grow further. A decision was taken to enter the promising apparel business and in 1963, Nordstrom purchased a clothing store, Best Apparel. This store was refurbished and reopened in February 1965. To reflect the change in its business model (from selling only shoes to selling apparel as well), the company renamed the stores 'Nordstrom Best' in 1966. In the same year, it began offering men's suits, sportswear and children's clothes as well. By 1968, two more stores were added under the Nordstrom Best label, bringing the total to a dozen. Nordstrom was generating $57 million every year in sales by then...

Excerpts >>

2]  'Nordstrom Loses its Luster,' Forbes, January 05, 2001.


Case Studies Links:- Case Studies, Short Case Studies, Simplified Case Studies.

Other Case Studies:- Multimedia Case Studies, Cases in Other Languages.

Business Reports Link:- Business Reports.

Books:- Text Books, Work Books, Case Study Volumes.