Saturday, October 25, 2008
Effects of Current Economy on Companies
The above article focuses on Nordstrom and what they are facing when opening new stores in an economy that many feel with not sustain new businesses. The main thing that Nordstrom must do is to find ways to cut costs in an attempt to gain higher profit margins. While many feel that one of the easiest ways to do this is by eliminating some of your workforce, Nordstrom believes otherwise. They feel that they need their employees in order to offer great service to the customers. This philosophy is good for a company like Nordstrom who focuses on higher quality and needs the interaction with the customer for increased sales. I feel that the best way for them to cut costs is to make sure that they have the right inventory on hand, as to make sure that inventory that is not in high demand is not being held (increased holding costs). I feel that this article does a good job of showing how new additions to a company during an economic slowdown are not always going to be bad for that company.
Michael Cook
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2 comments:
I agree that cutting inventory and making smarter inventory decisions would be beneficial. I also think that it would be more beneficial to just stop expanding as much, open less stores, and concentrate on the stores they already have. By doing this, they should be able to cut costs, including inventories, and not put the added pressure of new stores on their company.
It should definitely be about sustainability for all companies. And if retailers have to slow down store openings due to an economic slowdown, then that is a step they will have to take. But, regardless of whether or not they decide to cut store openings, there is no doubt that all companies can gain some cost savings through improved inventory decisions.
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