Keeping up with the ever-changing customer expectations is another strategic headache that had been facing decision makers in the retail industry. The needs and expectations of consumers change very quickly, and retail outlets have often played catch up. Monitoring trends of shopping and designing appropriate responses have been demanding for the industry.
Keeping up with the needs and expectations of consumers has been made worse by the high employee turnover in the industry, which has, in turn, created problems for the retailers to offer excellent service to its customers. The industry has one of the worst employee turnover rates. The challenge with this is that it makes organizations incur costs of training new employees and also erodes the quality of customer service. Hence, the retailers have to struggle on how best to retain employees in an environment of rising costs.
Strategic Resources of Macy's based on the Resource-Based View
The tangible assets that Macy's has to include financial resources that it has after selling off its stores and leasing its buildings to generate revenue. The company also has a wide network of branches across the country, and this offers an excellent opportunity for it to reach a broad pool of consumers. A committed workforce, together with leaders who have worked for the companies for many years, is also a valuable asset for the organization. In the case study, it is indicated that the company has skilled employees who are capable of propelling the organization to the next level.
The intangible assets that Macy's has to include the brand name. Having operated for many years, the company still attracts huge throngs of customers and has enjoyed a good reputation in its product offerings before. There have been no major scandals that have affected the image of the retail; hence it is viewed positively by the public. The years of operation as one of the leading retailers in the United States has made it highly conspicuous, and its nationwide presence has created the goodwill that can attract huge numbers of consumers once again if the leaders institute appropriate mechanisms for its growth. Moreover, the organization has a wealth of experience regarding retail business and customer trends, and these attributes put it in a unique position in overcoming the current challenges. As indicated in the case study, innovation has been at the heart of the culture of Macy's. Such a resource is essential for the company to exploit recent technologies to sustain its competitive advantage.
Organizational capabilities of Macy's include its ability to meet the needs of the customers. The talented managers have shown that they can integrate intangible and tangible assets to create value for the company. The introduction of the digital playground and the off-price product lines of the company is a clear indication that Macy's is capable of meeting the needs and expectations of consumers both in the short-term and in the long-run.
The resources that the company has been capable of achieving a competitive advantage in the future. However, the availability of these resources does not necessarily imply that the company will thrive in the future. For this reason, the leaders develop unique strategies to over the challenges the retailer is currently facing. They should then assemble the resources acquired from disposing of off some stores to diversify the business in agreement with the operating environment. It means that the company must continuously train and develop its employees not only for them to be equipped with the skills needed for excellent customer service but also to enable them to use the current technologies to foster innovation. Motivational approaches must be used to ensure that employees have the right mind-set to exploit their full potential for the benefit of the organization. Lastly, the guidance of top management is essential for the resources to be utilized effectively. Jeff Genette must create a vision for the organization in the digital era. The strategy being implemented by Nata Dvir is welcome is it recognizes what is happening in the external environment. If the company uses its resources properly while acknowledges the trends in the external environment, it shall remain profitable and competitive in the future.
The Strategic Decisions of Macy's and Their Effectiveness
One of the changes that the management of Macy's has made is shutting 100 stores of its 730 outlets across the network. The measure was meant to reduce the cost of operations in the wake of declining sales, especially during peak seasons. As a result, the company reduced the size of its workforce from closed stores. The other measure taken by the retailer involved selling some of the malls that were under its ownership as a means of generating revenue. For the buildings that it considers strategic for future decisions, the company resolved to lease them out while weighing available options regarding the viability of the investment in these locations. Macy has engaged in developing employees, whereby salespeople are trained to sell almost all the products that the organization offers as a way of not only enhancing customer service but also reduce the cost of business operation. The company has further adopted a strategy of offering a few merchandises than before through the off-price idea. The motivation for the backstage idea is to target young people and other individuals who are busy or need quick purchases. Lastly, the organization has diversified into digital stocking goods such as phones and smart refrigerators, among other things, as a way of coping with the advent of smart products in the market.
Effectiveness of Implemented Strategies
The strategic plan has not turned around the fortunes of the company. The results issued in August 2019 show that the performance of the company continues to decline despite having continued to instituted changes which had already take four years before the financial results of the year under review was released. Therefore, the effectiveness of the plan would be manifested in the financial performance. However, an evaluation of various variables affecting organizational output also suggests that Macy's is not performing well. The strategy is not consistent when one observes the internal issues of the organization. For instance, the organization trained salespeople, but their service quality has not been up to the task compared to other retailers, as revealed in the case study. The shutting down brick and mortar stores denied the organization the experienced employees who had an excellent relationship with regular shoppers. When an organization shuts its stores, online purchases also decline because customers have to pick items at the premises of the company. Investment in the backstage/off-price retail line of business is also not viable under the current circumstances since it is not consistent with the current business environment. Competitors in this sector had entered the market almost more than 30 years before the company mulled this idea. These competing firms understand the ground well and have shown an aggressive strategy to put departmental stores out of business. The approach of Macy's can also be evaluated from the perspective of the time horizon. The company's strategy lacks evidence of the best estimate of the period within which they would undertake restructuring measures. This is important as it would have enabled the leaders to implement a series of time-bound strategies that seek to deliver the long-term objective of the organization.
Evaluation of the Strategies' Effectiveness
Macy's needs to adopt particular strategies if it intends to survive in the coming years. One of the strategies that can be recommended to the company is to practice exceptional customer service by providing a holistic customer experience. Closing down stores may be a good idea, but that is not enough. Departmental stores must adopt a strategy that gives the customer a remarkable and enjoyable experience at the stores. Employees must be continuously trained on products and how to handle customers at the store. Macy's can also must offer multi-brand experiences to its customers to survive in the future. It is no longer tenable for the company to provide merchandise along. The company can, for example, start stalking art gallery in their stores to attract a new crop of customers. It has experimented with the strategy, and this needs to be expa...
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