Critically analyze the organization from the systems approach. You should consider the inputs, transformation and output elements of the operation and consider how the system creates value.
Within the retail environment, scheduling and a rapid response to changing consumer sentiments are critical. As such, the organizations systems must reflect this change in consumer dynamics to maximize sales and profitability. A systems approach works well in accomplishing this task. In many instances, consumer demand, consumer sentiments and macroeconomic factors all influence one another. In the context of Macys, macroeconomic factors determine consumer demand and confidence. Attempting to forecast this demand, the organization must then adjust scheduling and inventory levels accordingly. The input elements in this system would therefore be aligned with macroeconomic considerations. Aspects such as income growth, discretionary income, consumer confidence, tax policy, and commodity prices all affect the system. For instance high gas prices, can potentially cause less discretionary income for individuals. This lack of discretionary income ultimately hinders the amount of spending on discretionary items. This lack of spending impacts Macys on the output side as the company must now lower inventory levels or markdown merchandise to compensate consumers. Therefore inventory management is critical system in which Macys can use to add value to the consumer, the company, and its
With the economic downtown, this may affect sales for the company as consumers’ discretionary spending become less and less. Macy’s also faces intense competition which is inherent to the retail and department stores industry.
A business model is an important and integral part of the business a strategy of any firm whether big or small. The way a business model is developed determines and indicates the values, ethics and principles on the lines of which the business at large will be operating. It also indicates how the business is going to function and covers various internal and external dimensions of a business and the organization as a whole.
Due to the economy downturn period, Macy’s and many other retailers were suffering. Fortunately, Macy’s has chosen the beneficial marketing strategy to fit the objective of business. This paper will analyze the company’s situation from its financial aspect, industry aspect, the competitive part and Macy’s marketing strategies to conclude that Macy’s could have stable profit in the next three to five years.
Unlike Starbucks, Macy’s is not doing very well, as evidenced by the fact they announced last month the impeding closure of 68 stores (Peterson, 2017). The company has been struggling for a few years with the growth of the internet and online businesses such as Amazon making their brick and mortar stores impractical in modern times. While the number of stores may not seem like as much of a problem as it is, as other companies have had to close down more in recent years or go out of business in general, this is a symptom of larger problems in both the company and the industry.
The companies that were chosen for a company analysis include Macy’s, Kohl’s, and Burlington. Since the retail industry has been lagging behind lately, these companies will help determine the prospective financial investment in the retail industry. As Macy’s as our primary company, we chose Kohl’s and Burlington to be the two comparative companies. These companies are comparable due to the same SIC code of 5311 in the subgroup of department stores. These companies offer similar products and services with little differentiation between the three.
Given the market sentiments prevailing in the market, I believe the stock price of Macy's Inc. will be extremely higher than it is today. This notion hinges primarily on the low valuation placed on Macy's stock. Currently, the stock is trading at a P/E ratio of 12 with the market historically trading at a ratio of 13-16. With the significant growth prospects of Macy in regards to its retail franchise, I believe the stock in undervalued relative to the market. Furthermore, the company just released first quarter earnings that were 38% higher than those of a year earlier. This indicates increased consumer sentiments in regards to both shopping and purchasing goods at Macys Inc.
We all know that both Walmart and Macys are two of the most popular stores, they both have different concepts of the customer experience have manage to divide the public right down the middle. Macy’s stores serves high-end clientele, Walmart has more relaxed and price friendly appeal to those of who are in the middle or even low income. Many middle income Americans shop at Walmart primarily because of their low prices, there are shoppers that gathers shop for the quality of Macys. Is just a matter of asking shoppers a question: Why Walmart vs Macys? What is more important quality or quantity for the shopper’s money? Depending at their answer could change the future of each store, and maybe each store could change their perspective towers their shoppers.
The annual report and 10-K filings were obtained from macys.com. The financial statements included in the annual report are as follows: consolidated statements of operations, consolidated balance sheets, consolidated statements of changes in shareholders’ equity, consolidated statement of cash flows, and notes to consolidated financial statements. In the report, Macy’s Inc. recognizes several competitors which are Bed Bath & Beyond, Belk, Bon Ton, Burlington Coat Factory, Dillard’s, Gap, J.C. Penney, Kohl’s, Limited, Lord & Taylor, Neiman Marcus, Nordstrom, Saks, Sears, Target, TJ Maxx and Wal-Mart. The top three
The very first issue the organization has to address is their organizational structure and systems. The organizational structure is a very important factor for the decision making of the organization. Aside from its use for evaluating employee
The big store appeared in the mid-1960s, it had both sales volume and physical size, were Macy’s, Hudson’s, and Marshall Field. Between 1946 and 1966 over forty large- scale construction programs appeared. A lot of chain brand department stores created the new lighting, dropped ceiling, air conditioning, new escalators, the new department, and multiple floors in the whole aprtment building. The greatest example with the lively interior is Macy's which is designed by two of the nation’s leading retail architects, Daniel Schwartzman (New York) and Gruen & Krummenck (Los Angeles). They designed the veritable showcase to show a theater selling way in the department store. The circular patio and diagonal layour illuminated the displays dramatically.
The financial data will support the strategy as the ratios and numbers show that Macy’s has resources and capital available for the implementation. Evaluation of external and internal factors positively presenting an opportunity for Macy’s to use designed strategy to and keep competitiveness in the industry. Summarizing Macy’s is a well-established organization with over 150 successful years in business that still has an ability to compete with leaders in the industry if the right
Macy's Inc. is one of the nation's largest and well known department store chains. Started over 150 years ago, Macy's has continually generated excellent returns for its shareholders and employees. Currently, in the midst of a global recession, Macy's has generated huge profits with same store sales increasing 5.3% year to date. In 2012 same store sales increased 4.6% in the month of February alone (Macy's Inc., 2012). In fact, throughout the duration of 2012, Macy's is projecting even larger profits for its underlying business operations. Even though Macy's has experienced success with both its assortments and brand, its competitors haven't faired so well. Sears, due in part to part to a lackluster holiday season, has been forced to close nearly 120 locations to generate excess liquidity in an effort to shore up its balance sheet (Isidore, 2011).Other competitors who cater specifically to the middle class consumer have also lost significant amounts of market share as consumers trade down due to the economy. This performance is primarily due to the core functions and operations of the business. Planning, organizing, leading, and controlling. Macy's excels at these forms of management, which has allowed the company to perform at a higher level relative to its peers in the industry.
The development of the Internet and more specifically the business website has seen brand recognition by consumers escalate to never before seen heights. Because of this brand recognition, it has become important for businesses to design their websites to reflect their overall marketing strategies. This is especially important in the retail world. All retail businesses have a similar overall marketing strategy of generating sales and retaining the customer for future sales. Most of the retail giants still greatly rely on the success of their brick and mortar stores to turn a profit. However, internet sales for these brick and mortar stores have increasingly risen over the last few years to compete with the retail stores like Amazon that are strictly internet based businesses. Brick and mortar retail stores, such as Walmart, Target, Kmart, and Nordstrom, have each designed their websites to reflect the overall retail marketing strategy as well as the individual marketing strategies that have made their brick and mortar businesses successful.
On September 16, 2015, Robin Kincaid was detained while shopping at Barclay’s Department Store in Decatur, Georgia and is now seeking to sue the store for false imprisonment. However, there is a statute that may preclude Kincaid from recovery.
The product life style of the department store is in the mature or declining phase of its product life style, because of the declining sales. Furthermore, according to estimates, market share has eroded away to 7 per cent, as of 2010, and is far below the desirable rate 15 per cent (Johnson, 2011, p. 3). Also, the brand image is being heavily relied upon and the bottom line is not showing significant increase in the years presented in the journal article. Macy’s is afloat due to a strong management team and the aggressiveness to deal with problems as they arise. For example, continuing to adjust its portfolio of stores, focusing on fashion, and developing private labels in bedding, outerwear, ‘tween’ clothing, increase national advertising and using celebrities. Additionally, Macy’s advertising is combining the national department store image with July 4 and the Annual Macy’s Thanksgiving Parade, which appeals to the American citizen. Solution