retailing, Nordstrom has survived intense competition and gone
from strength to strength. By the end of 1990 it had experienced an
historic annual growth rate of 20 per cent per year and was the top-
ranked department store in the United States.
The majority of this case is devoted to an analysis of Nordstrom’s
success, specifically, how Nordstrom’s culture and values are at the
heart of its sustainable competitive advantage. Examples of some of
the other factors which contribute to Nordstrom’s success include:
how Nordstrom defies conventional wisdom and consistently does
the opposite to its competitors; suppliers are keen to supply them;
the complementary styles of the co-chairmen; differentiation
through service, including responding to unreasonable requests;
attracts top quality staff; recognition of the internal customer; iden-
tification of two key stakeholders, the customer and the salesperson;
clear career development, with employees only promoted from
within; organization reflects a network approach; and finally
rewards, recognition and peer pressure.
The final part of the case reflects on the ‘dark side’ of the
Nordstrom empire and considers the pressures which are brought
to bear on employees to bring their behaviour in line with the
Nordstrom culture. It is perhaps not surprising, therefore, that while
the company is considered a preferred employer, employee
turnover is 50-60 per cent, about typical for the industry.
Learning points
The previous two case studies illustrated how failure to manage
internal and recruitment markets can have a detrimental impact on
the business. The Nordstrom case study, however, is an excellent
example of how a company has successfully managed its relation-
ships, not only with the internal and recruitment markets but also
with the customer market. It is a particularly interesting case and
there are many learning points relating to both strategic and mar-
keting issues as well as relationship marketing issues.
Broad strategic and marketing issues:
●service quality as a key differentiator
●managing rapid growth
●examines how organizational policies affect the behaviour of customer
contact staff
●employee motivation
332 Relationship Marketing