Macy’s be discussed, along with Macy’s resources,
is a corporation that is known globally. Thispaper discusses the two segments of the general environment that would rankhighest in their influence on the Macy’s brand. Then it assesses the fiveforces of competition, which will have the most significance on Macy’s. Withthe same two forces in mind, I will predict what Macy’s might do to improve itsability to address these forces in the near future. It will also, assess theexternal threats affecting Macy’s and the opportunities available to the corporation.
Macy’s greatest strengths and most significant weaknesses will also bediscussed, along with Macy’s resources, capabilities, and core competencies.Finally, it will analyze Macy’s value chain to determine where they can createvalue using the resources, capabilities, and core competencies that have beendiscussed. Strategic Management and StrategicCompetitivenessGeneral environment segments that influenceMacy’s Inc.The general environment is comprised ofseveral 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 generalenvironment often has a substantial impact on a company’s level of success,executives must track trends and events as they emerge and attempt toanticipate the implication of these trends and developments (Libraries, n.
d.).The “Global Segment ” and “Technological Segment” are thetwo (2) division of the general environment that ranks the extreme highest intheir influence on Macy’s Inc. An organization’s environment includes anelement that it can rarely assume as well as the constituent that principallylay beyond its influence.Macy’s is an old-fashioned retail departmentstore 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 marketsthat are necessary for international public events (Hitt, 2013, pg. 49). It isno mystery that corporations improve in steady economies. With that being said,Macy’s is conscious of the importance of being informed of the development inglobal markets that emerge. They also realize that understanding the emergingeconomies in other countries, the impact of global markets, and changes inthese markets due to public influence or cultural influences may affect thesteadiness of the economy as well as their production within the marketplace.Expansion into worldwide markets provides Macy’s with the opportunity to coverany losses from within the USA with sales revenue from international sales.
Within companies, the global segment importsboth opportunities and threats of risk. Because of the threats and endangercombined with the international markets, many corporations elect a moreeconomical passing to avoid potential problems when competing in internationalmarkets. These firms are participating in what some refer to as globalfocusing. Global focus often is used by Macy’s and other corporations withmoderate levels of international trading operations which increases theirinternationalization by focusing on their position in the global market (Hitt,2013, pg. 48).
By doing this, they build on and use their unique capabilitiesand resources while limiting their exposure within the specialized market.Technological change has become moreextensive, variegated and influencing many parts of our societies. Theseeffects initially appear through renewed products, processes, and materials(Hitt, 2013, pg. 46).
The technological segment of the general environment hasan immense influence on Macy’s. Technological advancements have assisted Macy’scustomers in having a pleasant, helpful, and enhanced shopping experienceonline with the use of the Internet (Total Retail, 2017). Macy’s has takenadvantage of the e-Commerce trend and focuses on increasing their online sales.With technological advances, Macy’s Inc. can save time but also maximize salesand progress by expansion into other unidentified markets through theconvenience of e-commerce (BBVA Open4U, 2015). They have linked the gap betweenretail and digital with an increased focus on their omnichannel associationbetween mobile, online, and trading operations within all their retaillocations.
Macy’s Omni-channel strategic offers customers the chance to shopseamlessly through a variety of channels including in-store and online vialaptop or mobile device.Macy’s Inc. and many other corporationswithin its industry are cognizant that there are challenges associated withincreasing foot traffic and hardships facing the brick and mortar retailindustry.
Middle market retail stores need to adjust to the change in theenvironment. It is increasingly more fastidious to identify names that aremoving to Omni-channel opportunities. Some eCommerce companies like Amazon havemade investments to increase a physical presence. The executives at Macy’scarefully investigate each of these six segments to recognize essentialopportunities and severe threats and then they arrange their organization’sstrategies respectively.How Macy’s addresses two significant forcesof competition Macy’s Inc. (Macy’s) is an older retailcompany and has been around for over 20 years.
They have established awell-renowned brand worldwide for itself. However, like other organization,Macy’s is still affected by the five forces of competition due to itsperformance in the most competitive industries. The five (5) forces ofcompetition are (1) threaten of novel entrants, (2) engagement divinity ofsuppliers, (3) stipulation government of buyers, (4) the threaten of substituteproducts, and (5) intensity of emulation among competitors (Hitt, 2013, pg.51).
When considering these five forces, the two that are the most significantfor Macy’s is the threat of substitute products and intensity of rivalry amongcompetitors. These two vital forces, force corporations such as Macy’s to lowertheir prices in an endeavor to extend intuit value for their customers. All firmsand manufacturers contend with other industries offering substitute products.Macy’s along with other retailers in the industry feel the threat of substituteproducts through both internal and external industry competition (RapidBI,2012).
A major concern for Macy’s is the threat of substitute products andservices, especially with discounters such as Target offering similar products,and large chains that specialize in clothes such as H. Macy’s goal is tocontinue to maintain the lowest prices possible for their consumers. Macy’sInc. conducts business in a very competitive market. Macy’s has establishedprofessional relationships with various suppliers, designers, and manufacturersin order to compete in the retail market.
Through this venture, Macy’s procuresa wide selection of inventory for their stores. With excellent relationships,Macy’s has established goodwill, credit, and reputation with outsidemanufactures which are advantages they have over other corporations. Theseprofessional associations allow Macy’s to be a well-eminent company who canreceive their inventory at a buy rate to offer these products to the public ata discounted charge from the suggested retail price. Not only does Macy’s offerits high-quality products, but name brand products available in largequantities to satisfy the customers’ demand, but it also affords great customerservice and other services such as their shopper service. Macy’s also uses ahighly effective marketing tactics to support its products and advance saleswhich include the use of active advertising campaigns.
The intenseness of the rivalry amongcompetitors in industries refers to the degree to which companies answer toaggressive moves of other businesses in the industry (Cleverism,2014). Thesignificant number of competitors within the same sector is bound to increaseor thicken the rivalry between competitors. Because of this, it is severe forMacy’s to remain watchful of their competitors’ actions always and respond tothem when considered necessary. To respond to competitor moves of other firmsMacy’s has repositioned its industry segment. Macy’s has decided to changetheir 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 attractingcustomers interested in style rather than customers in a certain demographic area.
Macy’s external threats and availableopportunities Macy’s Inc. is a traditional retaildepartment store. Over the years Macy’s has maintained their upward marketappeal and has registered healthy growth during their holiday seasons (Singh,2012). As times change consumer tastes, properties that stimulate growth, andmarket dynamics change, and new factors of external threats and opportunitiesemerge.
Macy’s faces a certain level of external threats that can impose asevere impact on the business operations of the company (Singh, 2012).Threats:The retail markets in the United States arehighly competitive, with a substantial number of market players offering a widerange of products. J.C. Penney is one of Macy’s key competitors. J.C.
Penny hasannounced plans to reinvent itself, with some new policies such as pricereduction. They recently signed an agreement with Macy’s ally, Martha Stewart(Singh, 2012). Keeping this in mind, Macy’s should take measures to protectitself. It is a chance Macy’s might lose customers to J.
C. Penney as a resultof some of J.C. Penney’s changes and improvements.Discount stores: Industry giants such asWal-Mart and Costco are especially price-competitive in comparison to Macy’s.During adverse economic conditions, these stores have the advantage overexclusive retailers like Macy’s (Singh, 2012). Discount stores are Macy’s mostsignificant threat.
To compete with these stores Macy’s Inc. needs to reinventitself. This means emphasizing specific discounts for the deal-hunting shoppersand de-emphasizing discounts on significant name brand items. Along withcutting clutter in stores, so that Macy’s can build a selective aura aroundhotter brand names that can draw more customers and sell at more significantprofits.
Opportunities:Online Shopping: E-commerce holds vast potential for Macy’s.Its reputation has grown in recent years, and more people are transacting overthe Internet than in past years. Through Macy’s Internet business, they havelaunched a mobile application for the iPhone, and they have plans to expand itsonline platform more to create more revenue (Singh, 2012).
Macy’s E-commerceplatform is their most significant opportunity. Macy’s needs to put moreemphasis on developing their E-commerce platform in order to increase theirsales and profits. As they close 68 ofthe 880 store locations (Business Insider, 2017), they need to start acompany-wide restructuring that will shift more resources to their onlineE-commerce platform.Emerging markets: the purchasing potentialof the increasing middle class is emerging into markets such as India andChina. There has been a demand created for lifestyle products in these twocountries. Taking ideas from other lifestyle brands that have a successfulpresence in these countries, Macy’s can initiate the process of exploitingthem.
Macy’s opportunities measure higher than its threats and weaknesses. Macy’s greatest strengths and significantweaknesses Macy’s is abrand of its own. For years it has kept its high price exclusive market. Whencustomer preference and market dynamics shift with time, modern sets ofstrengths and weaknesses emerge.StrengthsMacy’s brought Bloomingdale’s as a separatebrand for the classy customer. Bloomingdale’s offers upscale fashion nichessuch as Armani, Burberry, Chanel, Christian Dior, Jimmy Choo, and Prada (Singh,2012). Macy’s provides better value by offering unique brands that factor inand meets the customer’s specific needs. Macy’s has a long history of buyergratification.
They emphasize their exclusive products by their tagline”Only at Macy’s,” this emphasizes their unique products within thebrand. It also has agreements with many celebrities such as Madonna and SeanCombs to offer their exclusive products. Macy’s has unlimited globalrecognition.
It is said to be the place for the latest looks, and hotteststyles (Singh, 2012). WeaknessesMacy’s compounded yearly turnover rate overthe last three years before October 2011 is only 0.5%, which is pretty lowgiven the quality of its business. The market share is diminishing due tointense competition. Macy’s is not diversified: Macy’s and Bloomingdale’s arethe 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 moreon their global brand and online marketing for better recognition. With theabove SWOT analysis, it is evident what the strengths and opportunities are forthe company and how they can use them to get rid of the threats and weaknesses(Singh, 2012).
Macy’s resources, capabilities, and corecompetencies Macy’s Inc.possesses resources, capabilities and core competencies that are valuable, andcostly to copy by other retail chains, and non-substitutable. Thesecapabilities include their distribution, management, human resources or humancapital, and their relations with their suppliers as well as their marketingstrategy. Distribution: Macy’s Inc. uses their supply line methodsto 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 exceptionalbenefits.Management Information Systems: through their (POS) point-of-demandsystems’ data collection methods; Macy’s efficiently manages and tracks theirinventories. Marketing: Macy’s encourages their brand name products entirely andprovides outstanding customer service and innovative merchandising.
Management: Macy’s possesses the ability to envision the future ofclothing and apparel. They have knowledge and understanding of what garments tobuy and sell in their stores for the current season. Analyzation of Macy’s value chain todetermine where they can create valueMacy’s can use their value chain todetermine where they can create value. To make this determination, they willanalyze their resources, capabilities, and core competencies. Macy’s can createvalue using their resources such as marketing and advertisement of their brandto entice their customers. They will use their marketing resource to create aripple 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 mostinnovated company with the use of their supply line methods. The Omni Channel,Macy’s online website offers customer benefits from the quicker delivery ofitems from local stores rather than their national distribution centers (ARS,2016). With its core competencies, the company cancontinue to create outstanding customer service and innovative merchandisingfor all their customers (Pratt, Gutierrez, n.d.). Most consumers prefer a moreeasier way to shop.
This is the reason why Macy’s has caught so much tractionwith their Omni Channel technology. Most other retail stores had the samefeatures but known as exclusive as Macy’s. Macy’s online store has bridged thegap between their store network and their digital technology creating a betterexperience altogether.In conclusion,Macy’s, Inc. continues to be one the most profitable retailers in the retaildivision. They know in order for them to compete and be profitable they mustincorporate both their in-store experience with their digital experience (ARS,2016). With the constant changes in the retail market, Macy’s knows they mustdevelop a strategy and deliver it faster to make everything they do morepertinent and captivating to their customers.
Macy’s, Inc. will continue to seean increase in their digital marketing, reflecting the success of theiradvances into this platform (ARS, 2016). Macy’s has created and delivered oneof the best omnichannel experiences in the retail business. Also, withcontinued change, Macy’s plans to continue to improve and make changes to theirdigital platforms.