Macy’s Department Store Repositioning Essay

Executive SummaryAs the global recession happened, the traditional plane section rememberings were experiencing consistently declining sales and trade shargon. in like manner, the traditional department stores diligence is between mature and decline compass point of lifetime cycle. Macys changed parts of their strategy and integration that localisees on localizing management, alter supplier consanguinitys and providing products and customer service based on local consumer preferences. However, the integrating was non with problems. With dealing these problems Macys changed parts of the strategy as interest* Continuing to adjust its portfolio of store.* Focusing on Fashion.* Continuing to develop and de exclusively Macys private labels in bedding, outwears etc.* Increasing national denote with emphasis on fashion and service. Statement of the problem/opportunity/and objectivesThe tradition department stores were one of the areas hit by the recession. While some compan ies dropped antecedently supported display cases and programs, Macys got more profit and grocery overlap by repositioning strategy and consolidation, even with the rough economic times. Analysis of the detailExternal and infixedMacys is a kind of traditional department store, and consolidation in 2005, at that time the economy is quite good. In 2008, the broad environment is not good the economy of U.S. entered a recession. The sales of Macys are decreased. Also, in 2011, the price of gasoline and cotton were increase. This increased the cost of Macys. So the profit and market share of Macys reduced. As the department stores assiduity was attracting fewer and fewer consumers, Macys entered into the declining industry life cycle model. The recession and the declining industry life cycle model are both negatively affect the success of Macys. Although the external ciphers are not good, the internal factors are very good for Macys.One such factor was Macys has the national recognition. Another supreme factor is Macys is rattling strong. It has 810 stores across the United States. Thirdly, Macys has the experience management. Macys was founded between 1843 and 1855 in downtown Haverhill, Massachusetts. Department stores created for one-stop shopping, Moreover, they had specific experience in converting regional brands to the Macys brand. A fourth factor contributing to the successful consolidation was that Macys made their stores on prime locations. These internal factors are positive for the success of Macys.Porters tailfin forces modelPorters five forces model describes the competitive environment in monetary value of five basic competitive forces 1. The threat of new entrants. Macys had more competitors because more and more self-made fashion lines join to the market to get the market shares, such as H&M, Forever 21. Self-made fashion brands remodeled for more pleasant shopping experience. It is the threat for Macys. Also, the developed national stores have the dismantle cost and tame quality and service same as Macys, it cause the opposition.2. The dicker power of buyers.Buyers threaten an industry by forcing down price, negociate for higher quality or more service, and playing competitors against each other. Macys has lower cost but because of the bad economic, the customers have little negociate power. Secondly, Macys already had everyday value. They give lower price core they bequeath get lower profit. Low profit creates incentives to lower acquire costs. However, highly profitable buyers are generally less price sensitive.3. The bargaining power of suppliers.Supplier power refers to the ability of providers of inputs to determine the price and terms of supply. Suppliers can exert power over firms industry by procreation prices or reducing the quality of purchased goods and services, so reducing profitability. After Macys consolidation, Macys bought mass amounts from same buyers and Macys have strong relations hip with these buyers. The bargaining power of suppliers is really high.4. The threat of championship products and services.All firms and industry compete with other industries offering substitute products or services. The threat of substitute products and services was the major concern, particularly with discounters such as Target offering similar products, and large chain that specialized in clothes such as H&M. 5. The intensity of the rivalry among competitors in an industry tilt refers to the degree to which firms respond to competitive moves of the other firms in the industry. Macys repositioned its industry segment to the upper middle level. Macys decided to change the strategy, they will be more fashionable and fashion at lower price. Also Macys change the brand to focus in attracting customers interested in fashion rather than customers in a specific demographic.Unique and a sustainable competitive advantageMacys repositioned itself as an upper-middle level store is easil y imitable. Other department stores also can position as the same level. But Macys attempt to become the Statess department store is something that other, small department stores cannot imitate. Also, Macys focus on less traditional and conservative than other department stores is a damage value proposition, but it is not a bad one. Because of some of the consumers may like the traditional Macys. Consolidating brands to allow for lower prices is a good bureau to cut cost and to be unique.Identification and evaluation of alternativesMacys consolidation and repositioning strategy is really good and Macys did the best decisions. Because as the external environment is bad but Macys use itself internal advantage to consolidate and reposition to gain back the market share and profit. Consolidation and repositioning strategy help Macys get more brand power, prime location and improved consumer experience. Additional Macys got consumers focus on the affordable fashion. However, it also c ame with some problems such as doubtful industry conditions, excess costs and emphasis on standardization.Macys succeeding(a)As Macys pursued an aggressive strategy in 2011, Macys was doing well. Almost everybody knows the everyday value of Macys and Macys afford the America department store. But department stores industry is in declining and aspiration is growing rapidly. Macys has recently instituted the strategy to compete in a tough market. So Macys is doing well and have huge advantage, but maybe other department stores will catch up and overcome in following years. Macys may change strategy when economy, competition change.