I think the following external environment factors could affect the success of Macy’s new strategy. The general economic environment as the country was entering a significant recession affected the company negatively. Another negative effect is the industry life cycle model in which the traditional department store industry was in the “mature” phase or even “decline” phase. Also, the intense competition between the existing companies and the rise of online shopping is also a negative.
Here are some of the internal factors I believe that could affect the success of the company’s strategy. Macy’s is recognized as a national brand with national advertising. They also have a sound customer base with new stores in prime location. The management teams are skilled and experienced. In 2005, Macy’s consolidation and repositioning strategy strengthened the consolidation and the image as “America’s department store”. The begin to remodel the stores in hopes to promote a pleasant shopping experience, affordable luxury, and changing the brand to focus on attracting customers interested in fashion.
Some of the weaknesses I see are the fact that the quality of merchandise and service has deteriorated the attempt to standardize the merchandise and pricing across all the stores.
Porter argues that the goal of strategy, and a key to achieving a sustainable competitive advantage, is finding a unique and valuable position. In my opinion, Macy’s has attempted to place their stores in a unique position as a “mid-level” store which is a good positioning for its new strategy. However, the decision to consolidation is not unique.
As far as I am concerned, Macy’s cannot success with the strategy outlines in the case. Although Macy’s has launched a bold strategy, the