Michael smith only

Running head: STRATEGIC AUDIT 1

STRATEGIC AUDIT 6

Strategic Audit

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Strategic Audit

Macy’s Incorporation as most of the current business organization has identified the existing international market is on the verge of going international. In the contemporary business world, expansion of a firm requires that the firm is able to exploit the market abroad, which means that it has to explore and discover the region with the most potential. In the US for example, there are many fashion firms sharing the market, therefore for a firm to be competitive and achieve growth, it requires expanding its operation to the international markets. Macy’s Inc. is targeting the UAE as it first target international market and the firm will open its first international store in Abu Dhabi. Macy’s will need to consider the following concepts when expanding its operations into UAE (Loeb, 2014).

Cultural Differences

According to Hofstede, culture is the collective programming of the thinking process that differentiates the members of one group or region from the others (Hofstede, 2016). The cultural values that governed Macy operation in the US are certainly different with those of the UAE. One of the differences is in the relationships, in the US, relationships are professional and indiscriminate of the family ties while in the UAE most of the businesses are family run and relationships are closed tied with the family. Therefore, the firm has to change its relationship values to accommodate the family-governed relationships of the UAE. Additionally, in the UAE, nepotism is the order of the day, while in the US contracts or other issues are awarded based on merit. The business will have to consider this value in setting up its operations. Moreover the American values are about punctuality in meeting and honesty in discussion therefore directly disagreeing is taken positively while in the UAE meeting are presided by honor and saving one face, this means that disagreeing directly is taken as rude. Other differences in value include in the U.S businesses are governed by legal biding contracts, online meetings, and short time meetings while in the UAE businesses are governed by trust, face-to-face meetings, and long meetings.

Cultural Exchange

Macy’s will have to undergo through a cultural exchange process during its establishment in the UAE if it is to effectively reach the market in the region. One of the areas that cultural exchange will be evident is in the dominating fashion in the shop. Most of the people in the region follow a strict religion and culture that advocated for some nude covering cloths unlike the normal fashion trend in the US. Additionally, there will be cultural exchange concerning the management of the store, the decision making is not designed for the top leader as in the UAE, but the each individual is capable and liable of making import firm decisions. There will also be the exchange of values in the greetings in which the US will conform to the UAE form of greetings. In establishing contracts, the UAE will conform to the US legal way of passing contracts, but the US business will also absorb the trust value in its operations.

Distribution Methods

The firm is currently planning to sell directly to its customers as it has only given information on establishing its store in Abu Dhabi. Therefore, the current distribution channel is short involving the main company and its subsidiary. The main reason for expanding into international market is to increase its sales, therefore as a typical profit making firm it will also sell its products to other dealer in the UAE enlarging the distribution chain to involve small-scale sellers. Given, the firm goals, in the long run it will involve small-scale retailers as part of its distribution channel while still selling directly to consumers of its products.

Product/Market

Given that the retailing store deals with a wide range of fashion products, it will focus its attention at the avenues and areas that mainly relate to fashion such entertainment industry. Additionally, the firm will only sell those products that are acceptable in the society to avoid running into conflict with the culture of the region. Marketing of its products is a primary strategy the firm will consider. Marketing will be done through online platforms as they currently hold the most number of potential shoppers. Additionally, promotion of these products will be done through advertisement on the television and on bill boards to create awareness of the new products in UAE and inform society about where to buy the products. During its first week of opening, marketing will be done through discount selling and mobile shops.

Pricing

Pricing is always a central issue in the firm since it is the primary tool informing on the firms profitability. Pricing of Macy’s product will not be the same as in its host nation. Several values need to be considered while making the decision on the optimal price to charge for its products. While making the pricing decisions the income of the people in the region will be considered to inform on the affordable price to charge (Kotler & Armstrong, 2010). The primary information while deciding on pricing of the firm’s products is the production, transportation costs, and other related cost involved in getting the product to the new store. Other important factors to consider while deciding on the price will be the demand of the product identified from an existing need, competition, and the population size.

Positioning

Positioning refers to the perspective held by the people about the firm. The firm will ensure that it is positively regarded by the society by carrying out a research on the society’s perception of the individual. The firm will also be involved in public activities that will help it create a good image about itself and make people aware of its existence in the region. The key strategy to ensure that it is well positioned is to promote its products unique features and show the customers why they need to purchase from its store rather than its competitors. Therefore, the firm will have to research about its rivals to have solid information to know how to convince the customers that it is the best in its line of business.

References

Hofstede, G. (2016). Cultural Dimensions - Geert Hofstede. Geert-hofstede.com. Retrieved 27 July 2016, from https://geert-hofstede.com/cultural-dimensions.html

Kotler, P., & Armstrong, G. (2010). Principles of marketing. pearson education.

Loeb, W. (2014). Forbes Welcome. Forbes.com. Retrieved 27 July 2016, from http://www.forbes.com/sites/walterloeb/2014/10/29/why-macys-is-finally-expanding-globally/#4452206e3ab0