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Kam Chuttii

on 25 January 2014

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Transcript of Macy's

Threat of Substitutes:
Macy's role in America
Case Overview
Activity 1
Activity 3
Activity 4
Thank You!
All American Department Store
Corporate Financial Objectives
History of Macy's
Macy's Repositioning Case
MACY'S Corporate Philosophy
In your groups, arrange the events in the correct order.
Activity 2
Discuss the Pros and Cons of each event:

Abandon Standardized Merchandising Strategy
Pursued Aggressive Strategy
Define what you think Macy's Philosophy is?
Macy's Vision
Let's See What You Know

Encourage customer loyalty and Decrease customer resistance to change
Continuing to implement their aggressive strategy
What does Macy's future
hold for it?
What do you think Macy's can do better in regard to:
Macy’s, Inc. is a premier national omnichannel retailer with iconic brands that each operate outstanding stores and dynamic online sites. Both Macy’s and Bloomingdale’s are known worldwide, and each has its own unique identity and customer focus.
To grow sales and earnings
To continue to increase the company’s profitability levels (earnings before interest, taxes, depreciation and amortization) as a percent of sales
To improve return on invested capital
To maximize total shareholder return.
All actions and strategies must be directed toward providing a localized merchandise offering and shopping experience to targeted consumers

Committed to open and honest communications with employees, shareholders, vendors, customers, financial analysts and the news media

Greatest strength lies in the skill, judgment and talent of our people. Every day a production of enormous magnitude takes place on our selling floors and behind the scenes

Consolidation with Federation of Department Stores
810 Macy's stores
Brand Repositioning
Upper Middle Department Stores
Consolidation Strategies
Post-consolidation Strategies

what do you guys think?
Our Recommendations
SWOT Analysis
Porter's Analysis

Consolidation & Repositioning Experience
Localized management
12 core departments
Fashion focused/knowledge
Store brand clothing
dynamic online sites
outstanding stores
known worldwide
customer focus
unique identity
40.71% Gross margin

unprofitable locations
Standard merchandise problem
Ordering 10-12 months in advance
Stuck in the middle of the High end stores and the low end stores
High Debt to equity
125 day inventory turnover
1.38 current ratio
Debt to total assets 73.19%
Threat of Buyers
Power of Suppliers
Threat of Industry Competition:
Who are Macy’s Competitors?
SWOT Analysis

Having private brands
Value chain
Opportunity to sell private merchandise elsewhere
Supplier Relationship
Other department stores in decline
Quality in accessible prices
Debt has been decreased

Consumer change resistance
Online shopping
Large pool of competition
large amounts of substitutes
Higher end stores have better fashionable products
Lower end stores offer cheaper affordable products
Prediction based
Image reliant
Cotton prices
gas prices
Porter's Analysis
Direct suppliers access
Thrift stores & Second hand items
Arts and crafts stores
(Nude) Beaches or Parks
Entertainment services
Technology services
Maintenance services (auto or home)
Discount Stores = Cheaper Products
Specialty stores = Better Selection
Online stores = Accessibility
Cost management
Turnover rates
Advertising ability
Ethical standards
Community involvement

Strong buyer power, strong MACY’S brand
Consolidated contracts
Options for haggling
Many small recurring purchases

Limited supplier power
Orders made 10 - 12 months in advance
Large dependence on cotton

Use the advantage of being a best cost provider to adjust prices to beat specialists and high end compitition while having a better selection of goods compared to low cost providers. This can be achieved by finding a balance between importing basic goods (clothes and long shelf life products) ahead of time, while also moving some macy brand production to north america to take advantage of faster response times for stocking and reducing transportation costs. Meanwhile look for meaningful opportunities to expand.
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