Department Stores Essay example

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Macy’s Department Store Repositioning

Jingjing Li
BUS 2275 Business Strategy and Simulation–Section 050
Instructor: Anish Bania
Due Date: Jan 16, 2013

Table of Contents Executive Summary 2 Statement of the problem/opportunity/and objectives 2 Analysis of the situation 2 External and internal 2 Porter’s five –forces model 3 1. The threat of new entrants. 3 2. The bargaining power of buyers. 3 3. The bargaining power of suppliers. 4 4. The threat of substitute products and services. 4 5. The intensity of the rivalry among competitors in an industry 4 Unique and a sustainable competitive advantage 4 Identification and evaluation of alternatives 5 Macy’s Future 5

Executive Summary
As the
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entered a recession. The sales of Macy’s are decreased. Also, in 2011, the price of gasoline and cotton were increased. This increased the cost of Macy’s. So the profit and market share of Macy’s reduced. As the department stores industry was attracting fewer and fewer consumers, Macy’s entered into the declining industry life cycle model. The recession and the declining industry life cycle model are both negatively affect the success of Macy’s.
Although the external factors are not good, the internal factors are very good for Macy’s. One such factor was Macy’s has the national recognition. Another positive factor is Macy’s is really strong. It has 810 stores across the United States. Thirdly, Macy’s has the experience management. Macy's was founded between 1843 and 1855 in downtown Haverhill, Massachusetts. Department stores created for “one-stop shopping”, Moreover, they had specific experience in converting regional brands to the Macy’s brand. A fourth factor contributing to the successful consolidation was that Macy’s made their stores on prime locations. These internal factors are positive for the success of Macy’s.
Porter’s five –forces model
Porter’s five –forces model describes the competitive environment in terms of five basic competitive forces: 1. The threat of new entrants.
Macy’s 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
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