Macy’s Inc. is a corporation that is known globally. This
paper discusses the two segments of the general environment that would rank
highest in their influence on the Macy’s brand. Then it assesses the five
forces of competition, which will have the most significance on Macy’s. With
the same two forces in mind, I will predict what Macy’s might do to improve its
ability to address these forces in the near future. It will also, assess the
external threats affecting Macy’s and the opportunities available to the corporation.
Macy’s greatest strengths and most significant weaknesses will also be
discussed, along with Macy’s resources, capabilities, and core competencies.
Finally, it will analyze Macy’s value chain to determine where they can create
value using the resources, capabilities, and core competencies that have been
Strategic Management and Strategic
General environment segments that influence
The general environment is comprised of
several divisions that influence the industry and the corporations within it.
There are seven segments of the general environment: (1) political/legal, (2)
economic environment, (3) sociocultural, (4) technological, (5) demographic,
(6) global, and (7) physical (Hitt, 2013, pg. 38). Because the general
environment often has a substantial impact on a company’s level of success,
executives must track trends and events as they emerge and attempt to
anticipate the implication of these trends and developments (Libraries, n.d.).
The “Global Segment ” and “Technological Segment” are the
two (2) division of the general environment that ranks the extreme highest in
their influence on Macy’s Inc. An organization’s environment includes an
element that it can rarely assume as well as the constituent that principally
lay beyond its influence.
Macy’s is an old-fashioned retail department
store that has adjusted to present-day business practices to stay competitive.
The global segment has been an immense influence on the Macy’s organization.
The global segment comprehends essential new global markets, existing markets
that are necessary for international public events (Hitt, 2013, pg. 49). It is
no mystery that corporations improve in steady economies. With that being said,
Macy’s is conscious of the importance of being informed of the development in
global markets that emerge. They also realize that understanding the emerging
economies in other countries, the impact of global markets, and changes in
these markets due to public influence or cultural influences may affect the
steadiness of the economy as well as their production within the marketplace.
Expansion into worldwide markets provides Macy’s with the opportunity to cover
any losses from within the USA with sales revenue from international sales.
Within companies, the global segment imports
both opportunities and threats of risk. Because of the threats and endanger
combined with the international markets, many corporations elect a more
economical passing to avoid potential problems when competing in international
markets. These firms are participating in what some refer to as global
focusing. Global focus often is used by Macy’s and other corporations with
moderate levels of international trading operations which increases their
internationalization by focusing on their position in the global market (Hitt,
2013, pg. 48). By doing this, they build on and use their unique capabilities
and resources while limiting their exposure within the specialized market.
Technological change has become more
extensive, variegated and influencing many parts of our societies. These
effects initially appear through renewed products, processes, and materials
(Hitt, 2013, pg. 46). The technological segment of the general environment has
an immense influence on Macy’s. Technological advancements have assisted Macy’s
customers in having a pleasant, helpful, and enhanced shopping experience
online with the use of the Internet (Total Retail, 2017). Macy’s has taken
advantage of the e-Commerce trend and focuses on increasing their online sales.
With technological advances, Macy’s Inc. can save time but also maximize sales
and progress by expansion into other unidentified markets through the
convenience of e-commerce (BBVA Open4U, 2015). They have linked the gap between
retail and digital with an increased focus on their omnichannel association
between mobile, online, and trading operations within all their retail
locations. Macy’s Omni-channel strategic offers customers the chance to shop
seamlessly through a variety of channels including in-store and online via
laptop or mobile device.
Macy’s Inc. and many other corporations
within its industry are cognizant that there are challenges associated with
increasing foot traffic and hardships facing the brick and mortar retail
industry. Middle market retail stores need to adjust to the change in the
environment. It is increasingly more fastidious to identify names that are
moving to Omni-channel opportunities. Some eCommerce companies like Amazon have
made investments to increase a physical presence. The executives at Macy’s
carefully investigate each of these six segments to recognize essential
opportunities and severe threats and then they arrange their organization’s
How Macy’s addresses two significant forces
Macy’s Inc. (Macy’s) is an older retail
company and has been around for over 20 years. They have established a
well-renowned brand worldwide for itself. However, like other organization,
Macy’s is still affected by the five forces of competition due to its
performance in the most competitive industries. The five (5) forces of
competition are (1) threaten of novel entrants, (2) engagement divinity of
suppliers, (3) stipulation government of buyers, (4) the threaten of substitute
products, and (5) intensity of emulation among competitors (Hitt, 2013, pg.
51). When considering these five forces, the two that are the most significant
for Macy’s is the threat of substitute products and intensity of rivalry among
competitors. These two vital forces, force corporations such as Macy’s to lower
their prices in an endeavor to extend intuit value for their customers.
and manufacturers contend with other industries offering substitute products.
Macy’s along with other retailers in the industry feel the threat of substitute
products through both internal and external industry competition (RapidBI,
2012). A major concern for Macy’s is the threat of substitute products and
services, especially with discounters such as Target offering similar products,
and large chains that specialize in clothes such as H. Macy’s goal is to
continue to maintain the lowest prices possible for their consumers. Macy’s
Inc. conducts business in a very competitive market. Macy’s has established
professional relationships with various suppliers, designers, and manufacturers
in order to compete in the retail market. Through this venture, Macy’s procures
a wide selection of inventory for their stores. With excellent relationships,
Macy’s has established goodwill, credit, and reputation with outside
manufactures which are advantages they have over other corporations. These
professional associations allow Macy’s to be a well-eminent company who can
receive their inventory at a buy rate to offer these products to the public at
a discounted charge from the suggested retail price. Not only does Macy’s offer
its high-quality products, but name brand products available in large
quantities to satisfy the customers’ demand, but it also affords great customer
service and other services such as their shopper service. Macy’s also uses a
highly effective marketing tactics to support its products and advance sales
which include the use of active advertising campaigns.
The intenseness of the rivalry among
competitors in industries refers to the degree to which companies answer to
aggressive moves of other businesses in the industry (Cleverism,2014). The
significant number of competitors within the same sector is bound to increase
or thicken the rivalry between competitors. Because of this, it is severe for
Macy’s to remain watchful of their competitors’ actions always and respond to
them when considered necessary. To respond to competitor moves of other firms
Macy’s has repositioned its industry segment. Macy’s has decided to change
their tactics; they will be more genteel and deliver fashion at a lower price.
Also, Macy’s will deviate from their traditional brand to focus on attracting
customers interested in style rather than customers in a certain demographic area.
Macy’s external threats and available
Macy’s Inc. is a traditional retail
department store. Over the years Macy’s has maintained their upward market
appeal and has registered healthy growth during their holiday seasons (Singh,
2012). As times change consumer tastes, properties that stimulate growth, and
market dynamics change, and new factors of external threats and opportunities
emerge. Macy’s faces a certain level of external threats that can impose a
severe impact on the business operations of the company (Singh, 2012).
The retail markets in the United States are
highly competitive, with a substantial number of market players offering a wide
range of products. J.C. Penney is one of Macy’s key competitors. J.C. Penny has
announced plans to reinvent itself, with some new policies such as price
reduction. They recently signed an agreement with Macy’s ally, Martha Stewart
(Singh, 2012). Keeping this in mind, Macy’s should take measures to protect
itself. It is a chance Macy’s might lose customers to J.C. Penney as a result
of some of J.C. Penney’s changes and improvements.
Discount stores: Industry giants such as
Wal-Mart and Costco are especially price-competitive in comparison to Macy’s.
During adverse economic conditions, these stores have the advantage over
exclusive retailers like Macy’s (Singh, 2012). Discount stores are Macy’s most
significant threat. To compete with these stores Macy’s Inc. needs to reinvent
itself. This means emphasizing specific discounts for the deal-hunting shoppers
and de-emphasizing discounts on significant name brand items. Along with
cutting clutter in stores, so that Macy’s can build a selective aura around
hotter brand names that can draw more customers and sell at more significant
Online Shopping: E-commerce holds vast potential for Macy’s.
Its reputation has grown in recent years, and more people are transacting over
the Internet than in past years. Through Macy’s Internet business, they have
launched a mobile application for the iPhone, and they have plans to expand its
online platform more to create more revenue (Singh, 2012). Macy’s E-commerce
platform is their most significant opportunity. Macy’s needs to put more
emphasis on developing their E-commerce platform in order to increase their
sales and profits. As they close 68 of
the 880 store locations (Business Insider, 2017), they need to start a
company-wide restructuring that will shift more resources to their online
Emerging markets: the purchasing potential
of the increasing middle class is emerging into markets such as India and
China. There has been a demand created for lifestyle products in these two
countries. Taking ideas from other lifestyle brands that have a successful
presence in these countries, Macy’s can initiate the process of exploiting
them. Macy’s opportunities measure higher than its threats and weaknesses.
Macy’s greatest strengths and significant
Macy’s is a
brand of its own. For years it has kept its high price exclusive market. When
customer preference and market dynamics shift with time, modern sets of
strengths and weaknesses emerge.
Macy’s brought Bloomingdale’s as a separate
brand for the classy customer. Bloomingdale’s offers upscale fashion niches
such as Armani, Burberry, Chanel, Christian Dior, Jimmy Choo, and Prada (Singh,
2012). Macy’s provides better value by offering unique brands that factor in
and meets the customer’s specific needs. Macy’s has a long history of buyer
gratification. They emphasize their exclusive products by their tagline
“Only at Macy’s,” this emphasizes their unique products within the
brand. It also has agreements with many celebrities such as Madonna and Sean
Combs to offer their exclusive products. Macy’s has unlimited global
recognition. It is said to be the place for the latest looks, and hottest
styles (Singh, 2012).
Macy’s compounded yearly turnover rate over
the last three years before October 2011 is only 0.5%, which is pretty low
given the quality of its business. The market share is diminishing due to
intense competition. Macy’s is not diversified: Macy’s and Bloomingdale’s are
the only two lines of business that Macy’s Inc. has. The company should invest,
spread and work with more subsidiaries (Singh, 2012). Macy’s should work more
on their global brand and online marketing for better recognition. With the
above SWOT analysis, it is evident what the strengths and opportunities are for
the company and how they can use them to get rid of the threats and weaknesses
Macy’s resources, capabilities, and core
possesses resources, capabilities and core competencies that are valuable, and
costly to copy by other retail chains, and non-substitutable. These
capabilities include their distribution, management, human resources or human
capital, and their relations with their suppliers as well as their marketing
Distribution: Macy’s Inc. uses their supply line methods
to satisfy their customers online on their website.
Human Resources: Macy’s is an equal opportunity employer,
they motivate, empower, and train their employees, as well as offer exceptional
Management Information Systems: through their (POS) point-of-demand
systems’ data collection methods; Macy’s efficiently manages and tracks their
Marketing: Macy’s encourages their brand name products entirely and
provides outstanding customer service and innovative merchandising.
Management: Macy’s possesses the ability to envision the future of
clothing and apparel. They have knowledge and understanding of what garments to
buy and sell in their stores for the current season.
Analyzation of Macy’s value chain to
determine where they can create value
Macy’s can use their value chain to
determine where they can create value. To make this determination, they will
analyze their resources, capabilities, and core competencies. Macy’s can create
value using their resources such as marketing and advertisement of their brand
to entice their customers. They will use their marketing resource to create a
ripple effect in its public image as being one of the most powerful companies.
This was done when Macy’s Inc. bought Bloomingdale’s and Bluemercury.
With capabilities such as distribution,
Macy’s could build more value being recognized on a global scale as the most
innovated company with the use of their supply line methods. The Omni Channel,
Macy’s online website offers customer benefits from the quicker delivery of
items from local stores rather than their national distribution centers (ARS,
With its core competencies, the company can
continue to create outstanding customer service and innovative merchandising
for all their customers (Pratt, Gutierrez, n.d.). Most consumers prefer a more
easier way to shop. This is the reason why Macy’s has caught so much traction
with their Omni Channel technology. Most other retail stores had the same
features but known as exclusive as Macy’s. Macy’s online store has bridged the
gap between their store network and their digital technology creating a better
Macy’s, Inc. continues to be one the most profitable retailers in the retail
division. They know in order for them to compete and be profitable they must
incorporate both their in-store experience with their digital experience (ARS,
2016). With the constant changes in the retail market, Macy’s knows they must
develop a strategy and deliver it faster to make everything they do more
pertinent and captivating to their customers. Macy’s, Inc. will continue to see
an increase in their digital marketing, reflecting the success of their
advances into this platform (ARS, 2016). Macy’s has created and delivered one
of the best omnichannel experiences in the retail business. Also, with
continued change, Macy’s plans to continue to improve and make changes to their