How to complete a EFE for Macy's Inc.

Gabrielle A. Miliner

College of Doctoral Studies University of Phoenix

MGT/711: Strategic Opportunities in An Internet-based Global Economy

Dr. Delores Springs

July 11, 2022

Summative Assessment1: Internal Evaluation

At some point, companies within the business arena must be fully aware of their internal and external strengths and weaknesses. To effectively forecast and evaluate the firm's internal environment, an Internal Factor Evaluation (IFE) and SWOT analysis must take place to accurately analyze factors that can determine your strategic standing and limitations within that primary industry (Jurevicius, 2021). This paper will utilize the strategic IFE tool, introduced by a notable scholar named Dr. Fred R. David in 1997, to assess the internal factors of Macy's Inc. and its overall standing within that particular industry. This paper will also utilize a SWOT analysis to assess its strengths, weaknesses, opportunities, and threats that will affect Macy's Inc.

Within the retail industry, Macy's Inc. stands among many other foremost U.S. retail organizations that interact with other entities to create shared value inventiveness (Kramer & Pfitzer, 2016). Within Macy's Inc., holdings are Bloomingdales and specialty stores such as Bluemercury, The Outlet, and Macy's Backstage as of 2022, with over seven hundred U.S. locations and 46 states of products it offers (Macy's Inc.com, 2022). Additionally, Macy's Inc. owns over thirty private brand labels. As of 2021, Macy's Inc.'s global net sales were 24.5 billion, up from about 17.35 billion recorded the previous year and signifies a growth of 43 percent in comparison to 2020 (Smith, 2022). The current management team consists of eleven distinctive leadership members under the direction of Jeff Gennette, who started his career with Macy's in 1983 (Macy's Inc., 2022)

Macy's online mission statement states, "to be a retailer with the ability to see opportunity on the horizon and have a clear path for capitalizing on it. To do so, we are moving faster than ever, employing more technology and concentrating our resources on those elements most important to our core customers" (Comparably.com, 2022). Macy's online vision statement states, "Our vision is to operate Macy's and Bloomingdale's as dynamic national brands, while focusing on the customer offering in each store location (Macy's Inc., 2022)."

Based upon Macy's vision and mission statement, its primary focus is on its patron's requirements, developing its range, and detecting new prospects. Macy's, Inc. has capitalized on authentic and open messaging with its clienteles, workforces, merchants, and stakeholders (Macy's Inc., 2022). Macy's communication strategy affords relevant information to realize its financial objectives through its rising money-making sales. Moreover, Macy's has maintained its profitability rate while exploiting stakeholders' returns and cultivating its return on capital investments (Macy's Inc., 2022). To remain profitable, the company must concentrate on factors impacting its operations and profitability and move forward in the marketplace.

SWOT ANALYSIS

Macy’s IFE Matrix

According to David, David, & David (2020), "a firm's performance is primarily determined by internal resources that enable the firm to exploit opportunities and neutralize threats" (P 232). Practical tools to measure a business's internal environment and reveal a firm's overall strategic effectiveness, advantages, and weaknesses are necessary to remain relevant in the business arena. Tools such as the SWOT analysis and IFE Matrix score will provide an overall score and indicate if that business is weak internally against its competition (Thinkinsights.net, 2017). The Internal Factor Evaluation (IFE) Matrix is a tactical means used by companies to evaluate their internal environment and reveal effectiveness if their strategic plan takes advantage of the strengths and effectively mitigates any weaknesses. Accordingly, the IFE numbers range from 4 to 1, with 4 indicating a significant strength, 3 – negligible strength, 2 – slight disadvantage, and 1 – significant weakness (MBA Knowledge Base.com, 2021).

According to the calculation rendered from the IFE analysis above, Macy's Inc.'s 2.68 score is above the standard score of 2.50. Although there are areas of concern related to its poor management and overdependence on its U.S. market, among other areas that require better strategic planning, Macy's is doing well in the marketplace. The scoring of Macy’s IFE provided centered on feedback from consumers of Macy’s product reviews and platforms within the retail industry and its ability to continue to upgrade digital services to attract new consumers that were not available in 2019 to create a sustainable future (Anderson, 2022). Some other ratings reflected the worldwide economic downside in which Macy’s had the ability as a frontrunner to take advantage of its competitors but failed to do so but chose mergers and acquisitions and to open new locations only to close them later (Howland, 2022). Another reason for the rating was that Macy’s failed to account for the whims of retail and only concentrated on apparel, disregarding that those things cycle up and down within the retail industry market (Howland, 2022).

Therefore, the scoring aligns with the central ideologies of economics that still hold; the changing aspects of analysis have transformed, causing entities to rethink the environmental aspects that affect decision-making processes and operational functionality. Internal factors of globalization encompass how the business changes its practices to compete on a larger scale. According to Taylor (2017), “Such staging has internal and external effects on various segments of a business, including company branding, employee capabilities, and consumer and market analysis” (para 1).

Competitive-wise, Macy's must put forth additional effort in other areas of the business since these weaknesses will negate those improvement efforts. Improving the above weaknesses is essential and will aid in refining efficiencies to develop supportable competitive advantages (David, David & David, 2020). Additionally, Macy's has made effective strategies to mitigate its weaknesses regarding sales guidance to reflect its strategic positioning and aligned risk factors within its internal environment.

Macy's has also implemented its Polaris strategy to realize the projected aids regarding real estate and trade policies, competitive pressures from specialty stores, foreign sources of production, and the Internet, as well as the impact of the product availability and the potential for the incurrence in connection with the weakening of intangible resources. (Macy's Inc., 2022).

References

Anderson, G. (2022). Has Macy’s become a different and better retailer? https://retailwire.com/discussion/has-macys-become-a-different-and-better-retailer/

Business Strategy Hub.com (2021). Macy’s SWOT Analysis. https://bstrategyhub.com/macys-swot-analysis/