With the changes in the dynamic environment, many companies have been suffering from greater destructive changes. Macys has recently closed and shut down its 126 stores because of external impact and non-maintenance of provisional amount. Macy has been facing higher struggle in this incumbent environment and due to high number of competitors. Macy is an American departmental store founded in 1858, which has faced higher debts and struggling for its existence in 2020.
SWOT analysis of Macy
It comprises of several renowned brands
Stronger presence with Omni channel existence
Personal merchandise offerings.
It does not uses its competitive advantage during hardship
For the last three quarters, Macys has not crossed sales growth of 1 percent.
Decreasing return on capital
Macys is not able maintain provisions for its uncertainties (Kent, and Zunker, 2017).
Failing malls in the successful location are dragging Macy`s down.
Intense competition from other supermarkets such as Woolworth and Walmart
It has larger access to global market
Growth in luxury beauty products such as spa and other services
Porter’s Value Chain Model
a. Primary activities
Macy should not take hold rigidity to remain standalone because it does not allocate equal importance to activities. Furthermore, it faces many challenges in following this model because it is difficult to get necessary data from business information system. It is able to provide value to clients by availing better as compared to other retail stores with the help of differentiation (Corban, Mirza, 2019).
b. Support activities
Macy can easily optimise its value with effective optimising of activities, which can control the infrastructure that is overhead cost. This strategy can be used the strategies to have competitive position in the market (Phadermrod, Crowder, and Wills, 2019).
Human resource management comes up to evaluate different aspects, which faces reduced competitive pressure on the basis of motivation, skills, and commitment as it is highly dependent on of company at employee`s talent.
Macy has realised the important of technological advancement very late, which includes. This late adoption has led to loss of many loyal customer because first mover advantage companies such as Amazon has outperformed Macys.
This may range from equipment, raw material, suppliers, and other series of inputs to achieve finished product. With the presence of Omnichannel, the company is able to connect quickly manage inventory, and differentiating as compared to its competitors (Digital innovation and transformation, 2020).
From the above analysis on value chain, which must highlight cost effectiveness, differentiated procurement and optimised processes (Petit, 2019).
Porter`s five forces model
Bargaining power of buyers-
The potential of buyers is quite high because there are greater number of buyers associated with each brand under Macys (Eskerod, and Larsen, 2018).
Bargaining power of suppliers-
The potential of suppliers is low due to varied suppliers with more quantity. Macys supplier provide standard with less differentiated products, which has lower and weaker force (Petit, 2019).
Threat of substitutes-
There are large number of substitutes available in the industry where Macys operates. Threat of substitutes is weaker force in this industry. It is less likely to switch to the substitute items, which means the threat of substitute product is weak because of brand equity maintained by a single company.
Threat of new entrants-
The economies of scale is quite difficult to achieve. This makes it easier for larger capacitates to achieve cost advantage. Therefore, threat of new entrants is quite weak (Petit, 2019).
Threat of competitive rivalry-
There are few number of competitors in which Macy`s operates because most of them are quite large in size such as. It leads to weaker force within the industry (Aithal, 2016).
Due to political instability and public participation to improve the stakeholder’s interest. It involves fewer controversies in regards to Donald trump, which straightforwardly leads to political instability, which further leads to lower growth of Macys.
With the decreasing purchasing power of people during the COVID-19, the sales in last three quarters has fallen. Slowing economic growth can affect Macy business. Furthermore, retail sector already has piercing competition within the industry (Corban, Mirza, 2019).
There is a greater risk of shifting of demand of customers and their change in taste and preferences. Macy can suffer from dead inventory as it can become outdated and unused (Digital innovation and transformation, 2020).
Due to privacy concerns, advanced technology issues are the major concerns emerging issues related to maintaining customer trust. Furthermore, adoption of big data, AI, and block chian can help to generate greater insights to manage their stores (Corban, Mirza, 2019).
Company will have to commit to sustainability where Macy will have to present corporate governance report for the community work. Merchandising initiatives for the sustainable apparels are quite important.
Standards such as food and safety with stronger compliance to fulfil CSR compliance and other government rules are mandatory for the company (Achinas, Horjus, 2019).
This technology cycle is quite complex. After life cycle model of technological evolution, era of incremental change considers dominant design in the Macy (Gheibi, Karrabi, 2018).
Era of ferment-
This factor comes up with four distinct stages of research and development, maturity, decline, and ascent. In order to pace up the technological slow down, it is quite important to enhance the slower progress with the help of artificial intelligence, block chain, chat bot, and marketing campaigns enabled (Gupta, 2019).
Era of incremental change-
Entry mad exit rate of companies derive and create balance between first mover advantage and late movers. It can be easily threaten by the substitute technologies (Vallati, and Grassi, 2019).
The Utter back and Abernathy Model or 3 Phases of innovation model (refer to lecture 4)
Since beginning, Macy has been using the strategy to cover Omni channel, its localisation, and magic selling since 2013 (Gheibi, Karrabi, 2018). In order to adopt the change strategy, it is important to unfreeze the strategy followed before.
There is a need to transform the strategies, as it has already been unfreeze. For example- implementation of advanced technology is important by considering many advanced tools to prevent from privacy.
Due to increase in complexities in technological understanding, there is a need to employ and train the employees who possess higher level of expertise. As per the S technological cycle, the company is facing under developed stage (SHTAL, and BURIAK, 2018).
The McKinsey 7-S Model
This tool examines the company`s organisational design by undertaking seven internal elements, which are further divided into hard and soft elements, which are aligned so that company can achieve its goals (Gheibi, Karrabi, 2018).
It is developed by the organisation to attain competitive advantage and successfully in competing market. The strategy must be sound but due to fail strategy of Macy, it lead to shut down of stores (Phadermrod, Crowder, and Wills, 2019).
The company has recently decide to close down its 126 stores out of 636 stores. It is seen that it has to chop 20 percent of total retail store in the world. The failed strategy come up with several no one size fit solution because it argues that it would provide vanilla experience with no unique and other stand out experiences to its customers (Juliana, 2019).
It represents business activities and divisions, which are organised and include data, which is accountable where structure is the organisational chart. Lack of continuous updates, it is important to note that top-level management could not make continuous strategies to compete in the market. It led to SG&A comprising of 42.9 percent of sales where Macy is not capable of competing in e-retail market. Furthermore, it is not able to compete on such low price (Mukherjee, 2018).
The process reveals organisation, which reveal organisation’s activities and how the decisions are made. System determines how well the business is done and their main focus for the managers. The system of Macy was disrupted due to higher labour turnover, fewer profits and less sales (Sanjeepan, 2017).
This consists of norms and standards, which can guide employee`s behaviour and action of company (Moreno, 2016).
It consists of abilities of employees to perform well by including their competencies. As the Macy has been struggling to have a sustainable image and place in the market for which it has to train its employees, raise equity shares for funding, and then finally reinforce new strategy and the structure. Due to lack of skills and higher plights in vacancy rate approaches, company has been using traditional methods (brick and mortar incumbent) winning in greater Omni channel markets (Abdel and Smarandache, 2018).
This can represent the way to which company has been managed through top-level manager, to which they can interact and have their symbolic value (Ervural, Demirel, 2018).
The staff was not trained enough and the company has to wipe out nearly 2000 corporate jobs by closing several offices (Phadermrod, Crowder, and Wills, 2019).
After assessing all the details, it could be inferred that it is able to provide value to clients by availing better as compared to other retail stores with the help of differentiation. The proper inbound and outbound activities and undertaken program company could easily mitigate possible issues and accomplish the set goals and objectives. However, it is analysed that swing and hold category of stakeholders falls in normative, as it is compulsory for Macys to comply with the government rules, laws, and regulations. It is analysed that company is able to provide value to clients by availing better as compared to other retail stores with the help of differentiation This stakeholder does not affect the strategies of company directly. Another group includes community, which demands to foster their CSR activities (The overall porter’s five forces model and undertake PESTLE analysis and undertaken work program is useful to assess the possible business factors in effective manner.
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