Macy’s Department Store Repositioning Essay

Executive SummaryAs the global recession happened, the traditional segment stores were experiencing consistently declining sales and mart sh atomic number 18. Also, the traditional subdivision stores industry is between mature and decline stage of life cycle. Macys formd parts of their system and consolidation that focuses on localizing management, strengthening supplier relationships and providing products and customer service based on local consumer preferences. However, the consolidation was not with problems. With dealing these problems Macys changed parts of the strategy as following* Continuing to induce hold its portfolio of store.* Focusing on Fashion.* Continuing to develop and debut Macys private labels in bedding, outwears etc.* Increasing national advertising with emphasis on musical mode and service. Statement of the problem/opportunity/and objectivesThe tradition department stores were one of the areas hit by the recession. While some companies dropped previous ly supported causes and programs, Macys got more dinero and market share through repositioning strategy and consolidation, even with the rough economic times. Analysis of the situationExternal and internalMacys is a miscellanea of traditional department store, and consolidation in 2005, at that time the economy is quite expert. 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 increased. This increased the cost of Macys. So the profit and market share of Macys reduced. As the department stores industry 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 two negatively affect the success of Macys. Although the external factors are not good, the internal factors are very good for Macys.One such factor was Macys has the national recognition. Another po sitive factor is Macys is really 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 shop, More all over, 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 salad days locations. These internal factors are positive for the success of Macys.Porters five forces modelPorters five forces model describes the competitive environment in terms 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 declare the turn away c ost and overcome quality and service same as Macys, it cause the competition.2. The bargaining power of buyers.Buyers threaten an industry by forcing down price, bargaining for higher(prenominal) quality or more service, and playing competitors against each other. Macys has lower cost but because of the bad economic, the customers necessitate little bargaining power. Secondly, Macys already had everyday value. They give lower price means they will get lower profit. Low profit creates incentives to lower purchasing 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 raising 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 relationship with t hese buyers. The bargaining power of suppliers is really high.4. The threat of substitute 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 Rivalry refers to the degree to which firms respond to competitive moves of the other firms in the industry. Macys repositioned its industry atom 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 receiptsMacys repositioned itself as an upper-middle level store is easily imitable. Ot her department stores also can position as the same level. But Macys cause to become Americas 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 flawed 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 way 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. desegregation and repositioning strategy help Macys get more brand power, prime location and improved consumer experience. Additional Macys got consumers focus on the cheap fashion. However, it also came with some problems such as uncertain industry conditions, excess costs and emphasis on standardization.Macys FutureAs 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 competition 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.