Macy's is one of the biggest stores in the world. It is among the oldest premier department stores. In the year 2017, Macy's announced to close some of its stores since their sales had fallen causing fear among investors, creating panic in losing market share within the company. There are aspects which should be included in Macy's turnaround strategy with the four major elements of a SWOT Analysis (Won-Yong, Zeng and Schuldhaus, 2018). The strength, weaknesses, opportunities and threats of Macy's can be divided into four major components including internal and external factors.
Strengths of Macy's INC: Turnaround Strategy in Crisis
The company has a strong market leadership position in the execution and strategy industry, which has enabled it to scale new successes in their products.
The company has excellent talent management that is inclusive of skill development among employees. The integral part of the success of Macy's is its human resource team which aid in its achievements in the execution industry and department in strategy.
Despite the company facing intense pressure from its competitors, it is still ranked highly in terms of profitability and profit margins.
The department of Macy's has sound recordings at consumer-driven innovation, maintaining good track records in innovation.
In the strategy and execution industries of Macy, there is a great recognition of the brand that has enabled the business to charge a premium as compared to its competitors.
Weaknesses, in this case, are the absence of strengths, resources and capabilities that are needed by the organisation. Presence of gaps prevents the company from ensuring proper management. One of the weaknesses of Macy's INC is the decline in revenue per unit in their department (Won-Yong, Zeng and Schuldhaus, 2018). There is great competition in the industry which has created pressure on their profitability. This situation can be managed appropriately if the company objectively assesses the value of its current products.
The company is experiencing a decline in market share, due to increased revenue and due to the execution and strategy industry growing more extensive than the company. The department in Macy's should ensure an analysis of the current trends in the sector, to outline what needs to be done for future growth.
Exploitable turnarounds Crisis are disappearing due to local monopolies and niche markets. The company could improve its operating and gross margins, but this would put pressure on the financial statement of Macy's department.
The business model of Macy's can be imitated easily by other competitors in the industry, raising a need for the company to establish a model that can incorporate vendors, suppliers and other users.
Since the firm has strong brand recognition in the premium section, there is an excellent opportunity for them in the trends of customers migrating to high-end products. The lower segment can ensure that customers experience excellent customer service. This will provide increased profitability.
To ensure the growth of Macy's department in the international markets, the firm can link up with local layers, who will provide local expertise, in conjunction with Macy's bringing global processes and execution knowledge to the table.
Most customers have adapted to online services. Macy's can take hold of this opportunity and offer new advantages to the customers in the industry.
While the government increases its regulations, Macy's can ensure an increase in its customer base. Most customers have to migrate from operators who are disorganised in the industry to licensed players. This provides Macy's with a chance to get accessibility to the entry-level market with a no-frills offering.
Macy's department can quickly expand into the market in the United States. This is because the US economy is experiencing a faster growth rate as compared to any other developed economy. The department is at a more significant advantage since it already has excellent knowledge on how to operate in the US market.
The company can easily face challenges n the skilled human resources shortly, due to their high turnover of employees and over-reliance in innovative solutions.
The company is still facing significant challenges and competition from local and international firms. Competitors can easily catch up with product development despite the department of Macy's being leaders in product innovation in execution and strategy segments.
Changes in the political environments of; the Middle East, European Union and China trade war can adversely impact the business in both local and international markets.
Trade relations between China and the United States can alter Macy's plans to expand its marketing operations in China
Pros and Cons of Each Strategy
Cutting Costs and Closing Stores
Growth in company profitability through discarding old traditions and replacing them with a vision of the future and cutting costs and closing of stores will ensure the company focuses more on investing heavily on its online operations (Won-Yong, Zeng and Schuldhaus, 2018). However, The Company can easily face challenges n the skilled human resources shortly, due to their high changes of employees and over-reliance in innovative solutions.
Reinventing the Brand
The company is set to using the latest technology and be first in significant innovation. A positive side of this is that the company has talented employees who will ensure good customers experience, and appeal the young, sophisticated customer. With most competitors providing renewal of their brands, the company will have to ensure uniqueness to ensure they keep their customers away from competitors (Won-Yong, Zeng and Schuldhaus, 2019). Another con to reinventing their brand is; Macy's will face a need to act quickly to the needs of a small market that most disruptors are focusing on.
Expanding Global Reach
Macy's looked into expanding their online global presence. Mobile payments will be a real convenience to customers. Customers will easily us their cards in stores and make easy payments, by uploading a Macy card using their camera (Won-Yong, Zeng and Schuldhaus, 2019). While this will be expensive to establish and implement due to the company's financial position, shopping will be made more comfortable and more private. The problem is the trade relations between the United States and China can alter their plan.
Won-Yong, Zeng and Schuldhaus. (2018). MACY'S INC.: TURNAROUND STRATEGY IN CRISIS1.
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