Analysis of the Retail Clothing Industry Coursework

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Analysis of the Retail Clothing Industry Coursework
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Updated: Sep 23rd, 2022
The US apparel industry is extremely lucrative. The industry is worth more than one hundred billion dollars. The profitability of the industry has attracted tens of thousands of shopping malls that specialize in selling various types of attire. Women clothing stores have a lions share of the market. The size of shopping malls ranges from small boutiques to large stores, whose operations span various states. Nordstrom is one of the largest apparel retail stores in the US. Nordstroms popularity rises from the fact that it offers high quality clothing to its customers, and strives to meet the specific needs of its customers.

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The retail clothing industry faces great uncertainties due to the economic situation in the US and Europe. Economic uncertainties increase volatility of prices and create significant shortage of labor. Economic situation in Europe increases the threat of another recession, which would significantly affect the industry. In addition, there is a steady increase in cost of production from China one of the major outsourcing locations of clothing companies. This increases the risk of China exporting inflation to its trading partners (Lardy, 2011). Since China is one of the major US trading partners, Chinese inflation would greatly affect the US. Therefore, Nordstrom must create a strategy that would provide it with options that will enable it to overcome economic uncertainties. The company should choose its suppliers carefully, to reduce risks due to the economic uncertainties. Proper sourcing would cushion the company from volatility of prices and guarantee steady supply of products.

Nordstrom strives to offer its customers high quality products at very competitive prices. Since importation forms a sizeable percentage of the companys products, the price of the products is dependent on the strength of the currency. Economic uncertainties in have the potential of leading to weaknesses of the currency. This would affect the price of products at Nordstrom retail outlets, and ultimately the profitability of the company. This necessitates Nordstrom to look for alternative suppliers, whose currency is more stable. In addition, Nordstrom should streamline its supply chain to facilitate fast response in case of any changes that may adversely affect the company.

Tastes and preferences of customers are the major factor that shapes the industry. Change in fashion affects the clothing retail industry significantly. Change in fashion may lead to a significant change in demand in clothing and related products. This necessitates clothing retail stores to have proper inventory mechanisms, which would cushion them from changes in fashion (Stickney et al, 2009). Therefore, Nordstrom should have efficient inventory practices that would cushion them from risks due to changes in fashion.

The US economy has not yet fully recovered from the recession. Unemployment is still very high. Unemployment reduces peoples purchasing power. Therefore, this would result in reduced sales for apparel. In addition, less people are willing to spend huge sums of money on designer clothes, which form a sizeable percentage of sales in the apparel retail industry. Nordstrom can overcome this problem by choosing a suitable collection of clothes. The company should ensure that its products are not highly priced. This would help in maintaining existing customers who would like to cut spending attire. However, Nordstrom should ensure that the price of their products is not too low that it may compromise the customers perception of quality.

Having a proper strategy would enable Nordstrom overcome some of the problems of economic uncertainties. The company should improve its operations to cope with the problems. This would enable Nordstrom emerge as a more competitive player in the industry after the US and global economy stabilizes.

Lardy, N.R. (2011). Sustaining Chinas economic growth after the global financial crisis. Washington, DC: Peterson Institute.

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Stickney, C.P., Weil, R.L., Schipper, K. Francis, J. (2009). Financial accounting: An introduction to concepts, methods, and uses. Belmont, CA: Cengage Learning.

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Paper Details
Reading time 2 min
Type Coursework
Pages 2
Words 596
Subjects Business Company Analysis
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