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Macy's Inc Case Study 5 Matrices
Deidra Viers
09/23/21
Liberty University
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Summary
In this project we discuss the financial well being of Macy’s department store, how they
have overcome financial stress from the Pandemic, the closing of stores and how they compare
with one of the top companies Amazon. We will look at how it all started from the companies
Mission, Vision and Values to the strengths and weaknesses. Although Macy’s has faced
financial turmoil, they remain positive that they are a productive company that has a lot to offer. I
will provide the financial statements to see how they compare with Amazon.
It does appear from the financial statements and the comparison to Amazon that Macy’s
is not the most stable department store. We know that people are spending less money due to the
Pandemic and the loss of jobs, but Macy’s need to come up with ways that will bring them profit
and attention. Amazon is the top retailer currently, and they are difficult competition. I think it
would be helpful for Macy’s to look at their management team first since that is one of their
greatest weaknesses and see if they can make any changes in that department. Maybe a fresh
start would do them good to start over with new ideas and anew management team. It may also
be helpful for Macy’s to be bought out by another company; this could also help them.
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Macy's Inc.
Mission, Objectives, and Strategies
Macy's describes itself as a retailer that can see opportunities and capitalize on those
opportunities. They move at a fast pace, using up-to-date technology that is important to their
customer base. Their mission statement is very vague as to what they are setting out to do. It
seems they are out to be the largest retail company. Their mission statement only speaks of
opportunities for the company to expand and the possibility of bettering technology. It seems
their only mission is to have financial growth with stellar technology.
Macy's objectives for their vision statement are to operate Macy's and Bloomingdales
while focusing on the customers' needs within each of these locations. All Macy's is going to
have different consumer needs. They will have a global presence through inclusion, diversity of
programming, and varying content to keep Macy's interest globally.
Macy's strategy has changed over the years from department stores to story-in-shops
where people could shop stories of different brand home items. In 2020 Macy's strived for
growth. Jeff Gennette led the company on some new strategies like online shopping and
merchandise pickup at nearby locations. Today, there are more than 200 Macy's backstage stores
that offer merchandise pickup, and the company also implemented a vendor for online sales,
which doubled its number of SKU's (Badal and Gamble, 2020).
A New Mission Statement
Macy's Current Mission Statement states how they will take advantage of internal
opportunities, but not so much of external ones.
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New Statement: We strive to be the best retail store for our customers. Were they can
find anything they want and to offer them, customers, the lowest prices.
1. Customers: Who are the firm's customers?
Macy's customers come from all around the globe. People of all different ages and
backgrounds. Internal customers are the stakeholders of the firm. External customers are
employees. External stakeholders include business partners, customers, and competitors
(Wang et al., 2020).
2. Products or services: What are the firm's primary products or services?
Macy's service is a retail store that houses different housewares, furniture, men's, and
women's apparel.
3. Markets: Geographically, where does the firm compete?
Macy's competes on a global scale in 91 countries. International shipping allows them to
build upon their customer base beyond the United States (Enright, 2011).
4. Technology: Is the firm technologically current?
According to Macy's original mission statement, they have always had technology at the
frontline of business. They utilize green living initiatives that use technology to recycle
waste and clean the environment (MSA, 2020).
5. Concern for survival, growth, and profitability: Is the firm committed to growth
and financial soundness?
Macy's number one priority has always been about growth and how to be the largest retail
company. They implemented a plan of growth50 initiative, which would produce
products and merchandise in 50 states that would create new retailing standards that
Macy's can implement in 50 to 100 new states per year (Thompson et al., 2020).
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6. Philosophy: What are the fundamental beliefs, values, aspirations, and ethical
priorities of the firm?
Macy's believes their culture is the key to their success. The four values that guide them
include Acceptance, Integrity, Respect, and giving back. (Macy's Inc, n.d.).
7. Self-concept: What is the firm's distinctive competence or significant competitive
advantage?
Macy's distinctive competence is they have a variety of retail items to choose from. Their
competitive advantage is that they have competitive prices, and they are available
globally and online.
8. Concern for public image: Is the firm responsive to social, community, and
environmental concerns?
Macy's should create customer-brand and customer-company relationships to strengthen
the business social network relationship. Online to offline is a developing trend in retail
(Wei, 2020). Macy's needs to use social media sites such as Facebook and Instagram to
build customer relationships with their brand.
9. Concern for employees: Are employees a valuable asset of the firm?
Employees play a vital role in a firm's effectiveness and how they perform. Employees
are the key to improving a firm (Rao, 2017).
Analysis of the Firm's Existing Business Model
Macy's business strategy is a department store chain that operates 551 department stores,
53 Bloomingdales, and 171 Blue mercury businesses. Along with the retail stores, there are also
retailing portfolios Bloomingdales the Outlet, Macy's Backstage, STORY, and online business
(Thompson et al., 2020). Macy's is not just about retail. In 1924 they held the first of what would
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be many Macy's Thanksgiving Day Parades. The future was uncertain about their retail stores,
but what they could count on was the parade of floats every year (Klara, 2019).
As of early 2020, Macy's strategy had a few positive results. By February, they had to
announce the closure of 125 store locations. By March, Covid-19 forced the closing of all 775
sites. The company did, however, reopen some stores in May. The effects of Covid-19 have them
expected to take a first-quarter profit loss.
SWOT Analysis
Strengths
1. Wide Variety
2. Excellent Customer Base
3. Valuable Brand
4. Strong e-commerce sales
5. Effective Marketing
6. Huge investment in automation
7. Household name
8. Fortune 500 company
Opportunities
1. Strengthen global presence
2. Expand e-commerce sales
3. Upgrade department stores
4. diversify products
5. Second-hand clothes
6. Focus on emerging markets
7. Expand through mergers and acquisition
8. Macy's acquired story
Weaknesses
1. Poor management
2. Implementation of Polaris plan
3. failed expansion
4. Pulled out of Abu Dhabi expansion
5. Declining quality of service
6. Emotional disconnect
7. Overdependence on US Market
8. Low presence
Threats
1. Global Recession
2. Declining retail sector
3. Stiff competition
4. Uncertain times
5. Scale down and become a small company
6. Loss of $1.1 billion due to the lockdown
7. Stocks drop by 50%
8. Covid-19
Strengths: Macy's has many strengths. Based on the latest information from the business
strategy hub, they have a wide variety of apparel, accessories, cosmetics, fragrances, home
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furnishings, and other goods. They are ranked 120th by Fortune 500 companies, and they have
one of the most effective marketing tools, The Thanksgiving Day Parade (Forbes, 2020).
Weaknesses: Management is a significant weakness for Macy's. They have made many
bad decisions and neglected effective plans. Macy's has expanded to other countries and canceled
those plans, ruining trust and disappointing future customers (Duncan, 2018).
Opportunities: There are several opportunities for Macy's. They need to focus on their
global prospects. For instance, the demand for luxury products and high-end designer brands is
in high order in Africa, Asia, and Latin America (Collins, 2020). This would help Macy's have
tremendous growth. Other areas for development would be through a diversity of their products,
such as second-hand clothing, or they could take things to a whole different level and start
carrying products from the food industry (Howland, 2019).
Threats: With the Pandemic, the economy has been destroyed, and the global recession
is already taken shape. Macy's has already made plans to become a smaller company due to the
incurring losses it will take in the first quarter (Fares, 2020).
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TOWS Matrix/Bivariate Strategy Mix
TOWS
MATRIX
External Factors
Opportunities
Threats
Internal Factors
Strengths
(SO)
1. They can use their
strengths to consolidate and
expand the market position
2. Loyal and steady customer
base.
3. Strong internet presence
and sales.
(ST)
1. Macy's can use two
approaches-building on
present strengths or analyze
the trend and build processes
to two-pronged market
approach penetration.
2. Not enough revenue
generation.
3. Only two lines of business,
Bloomingdale's and Macy's
Weaknesses
(WO)
1. Building strategies based
on consumer-oriented
product development and
marketing approach.
2. International Expansion
3. Product Extension
(WT)
1. Macy's should get out of
these business areas and focus
on strengths and threats or
weaknesses and opportunities.
2. Competition from other
department stores.
3. post-economic crisis has
people spending less money.
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Strategic Group Map
(Steemit.com, 2017)
The group map that I chose was price and content because these affect the competition in
retail today. Several retail chains offer lower prices than Macy's, such as Wal-Mart, Target,
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Kohls, and T.J. Maxx, to name a few, but they do not carry the name-brand clothing or have as
much product to choose from. Macy's, Nordstrom, and Dillard's are grouped as they carry
higher-end products.
When Macy's began their turnaround plan in 2018 to improve its performance, it focused
on online and mobile shopping experiences. The company's off-price retail brands backstage and
Bloomingdales the Outlet was also a practical plan for Macy's because they could have the
ability to defend against the online retailers. Another turnaround plan was their loyalty program
which would help increase customers and the amount they would purchase (Thompson et al.,
2020).
PESTEL: According to Thompson (2020), a PESTEL analysis defines the six main
components that affect a firm's industry and environment. PESTEL stands for political factors,
economic conditions, sociocultural forces, technological factors, environmental factors, and legal
conditions. Managers use this analysis to assess their influence on their strategic direction and if
any changes are necessary.
Several factors are limited with a lower number of stores in some countries. Instead of
updating its stores, the company should be launching new stores in different countries. Factors
such as regulations, tariffs, and political environment impact a company's operations (Shaw,
2021). Macy's has a tremendous economic advantage that ranks 120th in the Fortune 500 as one
of the leading companies of 2020. This also makes them more sociocultural in the fact they are
so diverse with their products.
Macy's latest automation technology is suitable for its operational benefits and efficiency.
This has raised some concerns they would lose personalized customer experience (Shaw, 2021).
The Covid-19 has been Macy's most significant environmental harm. The pandemic has put the
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global economy into recession. The recession and loss of jobs have also brought on many other
issues. Macy's brand heavily relies on the U.S. Because of recent protests across the U.S., and
there have been looting at Macy's stores in New York (Shaw, 2021).
Porter's Five Forces: Porter's Five Forces is a tool used to assess the competitive
pressures of a specific market. Five forces make up this market. They are competition from rival
sellers, new entrants, substitute products, and supplier and customer bargaining power
(Thompson et al., 2020). New department stores bring innovation and new ways of doing things.
Competition from rivals will drive down prices, but they will also limit each other's growth and
eventually affect profitability. Being in retail can make it difficult to compete with new entrants.
New entrants bring new ideas and new ways of doing things. Macy's can compete with
innovation by differentiating its products from those of the new entrants. Macy's can utilize their
marketing to build a stronger brand. There are very few substitutes available for the products
produced in the same industry as Macy's operates. This means there is no ceiling on the
maximum profit that firms can earn in the industry.
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References
Collins, T. (2019, December 1,). Big spenders: Africa's luxury goods market. African Business,
8-12. https://search.proquest.com/docview/2516295492
Duncan, G. (2018). Exclusive: Macy's pulls out of Abu Dhabi's.
Enright, A. (2011). Macy's Goes Global. http://digitalcommerce360.com/2011/06/27/maceys-
goes-global
Fares, M. (2020, May 21). Macy's to be 'smaller company' as loss to hit $1 billion in quarter
amid lockdowns. Reuters,
Forbes. (2020). Macy's Inc.
Gamble, J., Peteraf, M., & Strickland, A. (2021). ISE eBook Online Access for Crafting and
Executing Strategy. McGraw-Hill US Higher Ed ISE.
Ho, C., & Wang, Y. (2020). Does Social Media Marketing and Brand Community Play the Role
in Building a Sustainable Digital Business Strategy? Sustainability (Basel,
Switzerland), 12(16), 6417. 10.3390/su12166417
Howland, D. (2019, August 29). Macy's Debuts second-hand apparel sales with Thredup. Retail
Dive,
Macy's Inc. https://macysinc.com/culture.
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Rao, M. S. (2017). Employees first, customers second, and shareholders third? Towards a
modern HR philosophy. Human Resource Management International Digest, 25(6), 6-9.
10.1108/HRMID-02-2017-0023
Shaw, A. (2021). Swot and Pestel Analysis. https://swotandpestleanalysis.com/swot-analysis-of-
macys/.
Wang, Y., Zhang, M., Tse, Y. K., & Chan, H. K. (2020). Unpacking the impact of social media
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