Question
Macy's store re-modelling strategy
1.Complete
a situational analysis of the traditional department store industry and Macy’s
as of 2005. Which factors in the external environment could (positively and
negatively) affect the success of Macy’s new strategy (use Porter’s Five Forces
framework)? Which internal factors could affect the success of the company’s
success?
2.Evaluate Macy’s
2005 consolidation and repositioning strategy: what are its strengths and
weaknesses?
3.Porter argues that the goal of strategy, and key to
achieve a sustainable competitive advantage, is finding a unique and valuable
position. In your opinion, has Macy’s found a unique and valuable position
in the retail landscape through its new strategy? Explain
Expert Solution
The
decline in the economic environment affected the disposable income of most
consumers. As a result, most traditional departmental stores could not meet
their sales target and thus suffered losses, especially during the Christmas
season. Different stores, such as Macy's stores, changed their operational
strategy to remain competitive. Macy stores merged its 15 departmental chains
to become one brand under one leadership, whereby it operated 810 stores across
the United States. Although retail analysts predicted the failure of a merger
such as this, Macy's stores succeeded with their new strategy. Therefore, analysing
Macy's new strategy will be critical in understanding what led to its success
in a declining market.
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