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Case study: Macy’s| January 17
2013
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Instructor: Anish Bania| Kevin Oh|

1. Macy’s and other department stores are faced with imminent problems where sales are declining each year. Due to high competition and many substitutions in the market, company must always analyze, investigate, and plan for decision making. Creating situational analysis is a great way to analyze both the internal and external environments in order to understand the company’s capabilities, business environment, and customers. In Macy’s case, some of the external factors are competition and economy. Since competitors such as discount stores and specialty stores are attracting many customers, Macy’s need to find a solution to differentiate themselves from others to deliver value. Some of the examples can be lowering prices to meet customer expectations, expand market by using online- shopping, or take a survey to gather which brands or items customers want in Macy’s department store. Economy is another crucial factor store has to consider. When the economy is healthy, stores tend to worry less, but when the economy is in recession, customers will spend less and find a cheaper substitute items to purchase. Although Macy’s positioned themselves as upper middle class, company can increase sales by also providing less expensive brands for customers to choose from. As for internal factors, training employees, contract with excellent suppliers, and positive recognized brand will strengthen Macy’s. For example, experienced management can teach and lead employees to perform day-to-day operations and to be professional in what they do. Brand awareness is also an important factor since customer’s judge product and service by its brand image.

2. To this date, Macy’s is struggling to find a sustainable competitive advantage in the retail industry. Clothing store such as ZARA and H&M have a definite advantage since they attract customers by displaying latest...
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