My company is Nordstrom the expansion is towards Europe (focused on Italy)In Module Nine, you will write Section I (Executive Summary) and Section VII (Questions and Answers) of your final project and submit your final external capital funding proposal. It should be a complete, polished artifact containing all of the critical elements of the final project. It should reflect the incorporation of feedback gained throughout the course.Executive Summary: Briefly summarize the key points of your proposal, giving the loan committee the most essential information while convincing themto read further. Remember this is the first, and sometimes the only, section a selection committee will read in an initial screening.Questions and Answers: End your proposal by constructing a persuasive, evidence-based question-and-answer section that addresses additional financial questions you think the loan committee might ask, including legal and ethical concerns and why the loan would be attractive to the bank.Attached is the rest of the papers information
stefano_veliz___milestone_4.2..docx
stefano_veliz___milestone6.1.docx
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NORDSTROM INC
1
Stefano Veliz
SNHU
Milestone 4-2
November 24, 2019
NORDSTROM INC
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Introduction
The decision-making process for the external capital funding of the Nordstrom organization
involves expansion strategy to Italy. The operation base of the Nordstrom company is situated in
North America, where most retailers’ customers operate. The company provides efficient services for
fashion products to the domestic markets. The development of services and products provide a good
customer’s experience through the system of real-time location (Mohr, & Batsakis, 2018). The
company has some future plans for taking its services to the international markets system through new
sales divisions of its products. Nordstrom company is able to form some good basis of initiating
customers’ loyalty through various bases of operations. The price and market system of the product
development system involves merchandise bases for generates fashion brands with their price tags.
The company will use an effective eCommerce system to expand its sales to international market
structures, especially Italy. The target set of the company will be fulfilled according to the
development of a sales plan through logistic space that is set to initiate the reach of potential market
targets in Italy.
The company has initiated an effective assessment of the market system of Italy and has a
good review of the fluctuation of Euro. The key area of operations is supported by the market analysis
on the development of the market economy based on different conditions of expanding to a country
like Italy (Nordström, 2016). The global operations system of the Nordstrom company can challenge
the Ecommerce business operations in Italy based on the new market strategy of operations. As such,
the company aims at engaging various changes and assessment of the global economic system to
implement an expansion strategy to countries like Italy.
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Description of Investment Project
The committee development for the expansion project in the Nordstrom company generates
about 10 locations in Italy. The geographical development of these locations is based on the potential
growth of customers in the prospected region (Bäversten, & Nordström, 2019). The project
development will generate some important information in the profitability, completion schedule/time
frame, and resources system. The investment plan of the company is generated through justification
procedures of current business strategies. The financial priorities of the business system generate some
important fits of funding the organization according to the microeconomic environment. The
development of the comparative advantage in the market system of Italy will be built according to the
business model of the Nordstrom company.
● Funding Plan on Investment
The initial idea of expanding to Europeans countries is riskier compared to continents like
Asia and Australia. Italy generates a small landscape of business operations according to the allocation
of various stores. The marketing department of the Nordstrom initiates some good strategies for
incorporating different cultures and the native language of Italy (Mohr, & Batsakis, 2018). The idea
of marketing products will be initiated through some interesting and attracting features like the theme
of vacations on islands to draw people. The committee has decided to start with the plan of putting up
ten stores according to the initial investment of $1.5 million. The total investment is developed
according to various activities that will take place before the initial stage of launching products. The
initial capital of starting any clothing store involves approximately $100, 000. This initial investment
involves all costs and expenses generated in the first month of doing business. These expenses are
covers insurance, paying employees, inventory, and equipment. The strategy of eMarketing system
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initiates an effective system of opening some news stores, for example, for Men’s clothing only. The
new strategy of opening up some new store is based on the development of the website system where
the Nordstrom can lease land and building holding the store. This means that the budget of each store
will be ranging within $150,000 according to different locations.
● Resources
The company is able to initiate a specific resource system that covers the initial capital of
starting the project. The project leader indicates that capital allocation of $1.5 million generates some
good approval of the cultural system of Italy. The Nordstrom will have an opportunity to integrate its
products and services according to the cultural and locations of the environment of each store. The
Consumer and Competition Act generates an appropriate review of the required inventory in terms of
completeness in the business environment system (Nordström, 2016). The project development in a
new area initiates a good system of considering safety work health, employee standards, and fair work
in a new environment. The real estate acquisition program for the Nordstrom company is based on
profit generated by the organization after making a summary of total sales. The approximation of the
total sales made in the year 2017 for all clothing products was $15.1 billion. This means that the
company will enter the foreign market system through the engagement of small business units and
progressive expansion to store networks. The Nordstrom company has enough revenue to finding
expansion strategy.
The project was approved according to the allocation of resources to champion its operations
in Italy. The approval document generated that 10 locations, each with a store, were to spend $150,000
in facilitating services in the business system. The Nordstrom will initiate a new clothing design to
the prospected areas based on the development of culture. The Italian market on fashion designs is
supported by people’s preferences and cultural support systems. The Nordstrom company is planning
to introduce the American designs system in the new brand of clothes to provide the Italian market
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with a new taste. The key marketing system for reaching more customers involves the online purchase
system of clothes (Nurminen, 2018). The main target company to generate online sales of clothing
products based on Italian culture is the Walmart company. The new project will incorporate Walmart
store development to reach many clients in Italy according to the people’s understanding of the
common practice. The marketing strategy and cultural development of the Walmart organization are
based on the cultural system of Italy. This means that the customer’s experience and interaction
engagement will be initiated in a short period of time despite cultural differences. The engagement of
the Nordstrom in the local markets of Italy will be supported by retailer experts in the targeted regions
of operations.
● Schedule/Time Frame
The project expansion for the Nordstrom company in the Italy local markets will be initiated
in June 2019. The project is designed to be completed before the end of the season, according to
Europeans market development. The Nordstrom company will introduce the key brand of clothing
products according to the preference and needs of potential customers. The growth of relationships
with local clients will take time to develop according to vendor interaction practices with community
members (Mohr, & Batsakis, 2018). The Seller-Buyer relationship in Italy will be initiated through
the evolution of time because they have a complex undertaking, especially when operating in a new
market system. The ultimate goal of initiating the relationship between different groups of
stakeholders is to boost the capabilities of sales in Italy. The project development will be initiated
through expansions strategy, net income, cash flows, and customer base relationship in the new area
of operation. The development of the store involves giving directions on the landmark of the
community and fixtures analysis on the permanent building (Bäversten, & Nordström, 2019). The
Nordstrom company will win the trust of local people by embracing their activities to the benefit of
NORDSTROM INC
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the clothing business. For example, the solar energy system from the local people of Italy can be
implemented as the main source of energy to run a store.
The investment plan of the company involves some global capital funding strategy for
expanding in Europeans countries. There is an Italian company that had laid some investment in
expanding in new areas according to the geographical regions of the market system. The company
operated for four years, where it has opened more than 15 stores in the New England region
(Nurminen, 2018). The company was operating on losses for a period of six years because of the
failure to form effective market saturation. There were numerous competitors in the business
environment that hindered the expansion effort of the company. The financial statement provides that
a solid business organization will be formed in a period of five years according to the development of
the positive net income.
The TJ Maxx was able to expand in Italy with more than 30 stores; this means that Nordstrom
has the potential ability to expanding to the same geographical region with the same process.
According to the experience of previous companies, the competition was too high for TJ Maxx, but
the Nordstrom company can be able to saturate the market system of the clothing products in Italy.
The development of a new culture provides that online shopping initiates some effective environment
of marketing and advertising products (Nordström, 2016). The Nordstrom company will develop an
online customer-based system where many products will be displayed online to reach many potential
market systems. As such, the company has indicated that that beyond six years of making losses means
there is a need to close the clothing store.
Investment Justification
The capital investment procedure will be developed through a successful method of expanding
to Italy based on the success records of Nordstrom company in other areas. According to the cash
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statement, the Nordstrom company will be able to pay a 3% dividend to buy new stock and paying
debts. For the last three years, the Nordstrom company will initiate some strategy through an initial
investment of $1.5 billion to penetrate the existing market of Italy according to the trending markets.
This means that the company had to initiate its own stock instead of expecting the growth of its
products (Mohr, & Batsakis, 2018). The global trade scale in the United States and Europe generate
some small penetrating fees to facilitate trade. There is some motive supporting market development
with gain market share, customer and market bases, competition, improved profits, and global scale
of the increasing arena.
The Nordstrom company has an inventory and record of equipment to be used in 10 stores that
will be put up in Italy. The engagement of diverse market systems in Italy will be regulated and
monitored by the laws and policies of the government system. The completion of the entire project
was initiated through simple regulations of law that do not compromise the market system. An
important business system generated some treatment, quarantine, permits, duty taxes, and government
regulations (Bäversten, & Nordström, 2019). The engagement of the local government was based on
the protection acts of the Nordstrom company. The classification of a good importation system is
developed according to the needs of a Nordstrom company, especially in the development of duties
and tariffs. The declaration of self-assessment initiates some diverse ways of enabling importations
through the customer base system Italy to enforce import restrictions.
Strategic Fit
● Priorities
The Nordstrom organization was developed through financial priorities to align business
activities. The development of financial priorities is based on creative designs, low costs, and creating
insignificant risks for the new brand of the product (Nurminen, 2018). The decision to expand the
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business in Italy is based on the initiative of offering differentiated products and services to offer
unique experiences to customers. The idea of leveraging was the foundation for the brand design
according to the various specification of production. The drastic change in brand development can be
to be implemented in the market segment of Europe, Africa, and Asia.
Market analysis indicates that the idea of expanding to the Italy market system with an initial
operating capital of $1.5 million, which was only 0.10% of the total revenue generated in the
Nordstrom company $1.5 billion. This means that the Nordstrom company had made a smart
investment based on cash available (Nordström, 2016). As such, the Italy markets system will align
models of the brand, and a small investment of 10 stores will grow to more potential markets system.
The experience in the Nordstrom for over 100 years generates some safe financial matters for the
company. The sense of discovery for brand development creates compelling collaborations on regular
price selling on preferred brands. The strategic plan of the business operations was initiated based on
core values of solving the needs of customers.
● Microeconomic Environments
The global operation of the Nordstrom company generates some strong market operations
according to the growth of 10 stores established. The idea of expanding to a potential market system
for more than five years is enough time for Nordstrom to create a strong brand of product. The fashion
development for Nordstrom products is initiated through attractive sites that correspond with the
initial plan of full-lines stores (Mohr, & Batsakis, 2018). The TJ Maxx is starting a business system
that later expanded to most international markets like Australia, Europe, the US, and Canada. As such,
low-risk investment practices of Nordstrom ensure and effective approach to long-term operations
and forming profitable companies. The development of the international business system is based on
an economic, strategic stream for external and internal contingencies.
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● Comparative Advantage
There are competence and comparative advantage for the expansion strategy of the Nordstrom
based on the primary details of customers’ experiences. The engagement of the TJ Maxx was based
on investment strategy, but the main focus of Nordstrom company is to build effective relationships
of customers’ experience and separate some pointing areas in the company that would block
employee’s engagement. There is a green gesture of nurturing customers’ relationships according to
individual needs and preferences, especially by explicitly addressing customers’ needs through
product development (Bäversten, & Nordström, 2019). The marketing strategy of the Nordstrom is
unique since the company has invested in professional trainers and hired nurturers to empower
employees. The research study indicated that many companies do not provide investment in
empowering employees and increasing customers’ relationships. As such, a Nordstrom company will
do well in international business with new strategies.
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References
Bäversten, D., & Nordström, M. (2019). Key Aspects of Implementing a Corporate Sustainability
Strategy in a Decentralized Organization: A Case Study.
Mohr, A., & Batsakis, G. (2018). Firm resources, cultural distance and simultaneous international
expansion in the retail sector. International Business Review, 27(1), 113-124.
Nordström, L. (2016). A long-term perspective on private equity ownership. Ratio Working Paper,
(269).
Nurminen, S. (2018). Social Media Marketing Plan for Online Boutique Miss Chic Bohé.
EXTERNAL CAPITAL FUNDING PROPOSAL
Milestone 6-1
Stefano Veliz
SNHU
External Capital Funding Proposal
1
EXTERNAL CAPITAL FUNDING PROPOSAL
2
Abstract
This paper is designed to provide the reader with awareness into some of the issues faces
businesses. In the global market, there is stiff competition and various risk and opportunities
which requires corporations to measure their risk-reward. Several questions go unanswered if the
risks are not well regulated. These questions are such as ‘is the investment worth it?’ Will
management and stakeholders see a positive return on their investments? These questions are
supposed to be discussed by management in detail. There is a need to consider both internal and
external factors when weighing growth opportunities. Besides, it is essential to analyze the
financial impact decisions and make the necessary recommendations on how to act on those
decisions. Therefore, the risk analyst will work closely with the organization team to create
various developments which will prepare the management team of the company in its project.
These situations will involve the most likely case, best case, and worst case. As a result, by
creating a range of scenarios, it will enable Nordstrom to prepare such events for the better of its
project.
External Capital Funding Proposal
Introduction
Nordstrom is one of the competitive corporations and is involved in selling retail products in the
market. It is also involved in other small businesses, such as operating a boutique business
depending on the geographic location. The U.S. based company is growing and is expecting to
expand into the emerging market regions. However, the company has many other competitors
such as Macy’s, which has expanded its operations to Puerto Rico and Guan. Macy’s is one of
the close competitors of Nordstrom, and it has expanded its various subsidiaries to other states
such as the Bloomingdale’s stores in Dubai and Kuwait, which are under the operation of Al
EXTERNAL CAPITAL FUNDING PROPOSAL
3
Tayer Group LLC under license agreements (Lavin, 2009). Nordstrom company is currently
operating in the United States and Canada. Besides, the company is proposing expansion into
Europe, and focusing on Italy.
Our task as a corporation is to ensure that the stakeholders have a clue about the plans of the
organization, which includes the potential internal and external risks which are connected with
the expansion of the business. To understand the organizational strategy is through mitigating the
risk factors. Besides, we will be looking into various scenarios that are partitioned into three
stages, such as best, moderate, and worst, to provide our project with risk assessment.
Furthermore, we will analyze the financial sustainability of Nordstrom to be enabled to absorb
such investments (Nordstrom,1980). For the organization to measure the financial integrity, they
have to carry out a self-evaluation stress test. Since Nordstrom plans to expand its operation to
another country, various departments need to ensure the best possible direction for expansion is
followed through segment analyzation. In referring to the previous research, it was indicated that
Italy is close to an economic upturn and includes the rise of their middle class.
The rise of the middle class is an added advantage to our plan of expansion into the market.
Nordstrom is considered one of the high-end fashion retail stores in the U.S. and Canada, which
sets its focus on women and men. We aim to focus on the middle class and the upper-class
individuals through the remaining premium retailer. Our company is targeted at buying its
products from the local industry, which will keep our prices down to meet the demands of the
consumers in the area of operation. Buying from the local manufactures is our strategy which
minimizes imports hence decreasing the amount of the products, by using this strategy, our
company will gain a competitive advantage. Therefore, using the business approach, our
managemen …
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