Macy’s Company is in a situation in where the sales revenues are decreasing thus reducing the profitability of the retailer. The drop in profitability of the retailer is also subject to rise in gasoline prices and increased production problems regarding cotton. These issues forced the retailer to increase the prices of it some of its products to its customers. Consequently, this impacted the purchasing power of the customers thus reducing the sales volume and the profits for the company (Anne n.p).
Despite the problems facing the company, its repositioning and consolidating still stand out. Economic instability also affected many of the company’s competitors in regions where Macy’s was well established to close down their operations. This played a great role in giving the company an opportunity to control the market making it increase its sales volume. This is because some of the competitor customers had no options other than buying from the company. However, the company is subject to negative aspects of both repositioning and consolidation strategy. This is because the company also closed some stores; it also fired, transferred and demoted some of its employees.
Anne (n.p) reveals that the company also canceled some of its distribution routes and major suppliers. As a result, it left companies and customers who depended on its products and services destitute. This implies that its image and reputation in the external environment will negatively affect thus affecting its future sales revenues and profitability negatively. This is because many of its customers who were affected by its actions may decide to sabotage the company’s products and services.
Macy’s can maintain its current position and uniqueness by focusing on improving its operations. This is to mean that there is a great need for the company to consider operating at low cost. This is possible if the company focuses on enhancing efficiency in its operations. In so doing, the company will have a great opportunity to lower its prices for its products making them affordable to customers. This will assist the company in increasing its sales revenue as well as increasing its profit.
Moreover, the company needs to focus on designing and producing unique products that meet the changing needs of its customers. The company needs to focus on competing in the market, and this is only possible if the company promotes innovation in its processes. The company should conduct market research continuously to establish the changing customer needs. This will help the company to respond to such needs by developing products that satisfy their customers. In so doing, the company will be able to draw many customers to its business thus increasing its sales revenue hence increased profitability.
Another problem that may further worsens the company’ situation is the resistance to its high prices by the company’s loyal customers. The competition in the market remains very high with big companies like Wal-Mart presenting threating Macy’s operations. This is to mean that if the company losses its customers to such companies they may never return. Consequently, this will lead to reduced sales revenue for the company due to reduced customer base of the company. Macy’s lacks enough differentiated products from which its customers can make choices. Customers require having a variety of quality products from which they can choose products that can satisfy their needs. This implies that most of the company customers look for alternative companies which offer a variety of products from which they can make better choices. An outstanding example of such a company in the industry that cuts a competitive edge in the market is Wal-Mart Stores. This issue has also led to decreased sales revenue for the company hence reduced profitability.
Finally, the company has a limitation in its operations thus unable to fetch a large customer base for its products. There are various emerging markets that offer the company with an opportunity to enhance its customer base. For instance China, Japan and India are some of the emerging markets that can expand the customer base of the company. Lack of venturing in emerging markets has disadvantaged the company by reducing its customer base compared to other competitor companies that have operations in these markets.
Macy’s leadership has taken various initiatives to improve its situation. For instance, Macy’s has worked in collaboration with Federated Department store in implementing various components to support its consolidation and reposition strategy. This move was to restructure the company with uniqueness and enhance valuable positioning in the market to foster its competitiveness. The strategy they adopted was to look for valuable locations for its business, recruiting knowledgeable and skilled employees. Furthermore, the company adopted national advertising strategies which have played a great role in providing information to its customers thus improving its customer base. Also, they adopted promotional strategies that included staging events for displaying fashions in the regions where the company operates (Jain 287).
Nonetheless, Macy’s leadership has also enhanced the image of the company by avoiding standardized merchandising strategy and focusing on a better another strategy geared towards offering customers with a unique taste for all its customers in their market segment. The company wanted to enhance customer shopping experiences that would increase frequent visit of its stores and purchase more of its products. Also, this approach also allowed the customers to consider impulsive buying through increasing its advertisement so as maximize their sales.
Proper marketing promotion strategies are also essential for the company in enhancing its competitiveness in the market. The company will need to focus on using digital marketing which can help it to reduce the advertising costs since it is efficient compared to other forms of marketing. It needs to use its website and social media to offer customers from various regions where it operations up to date information regarding its products and services. Technology advancement has many people focus on the use of the social media for socialization and sharing meaning. As a result, Macy’s can take advantage of a large number of people present in the social media to market its products. In so doing the company will be able to increase its customer base thus increasing its sales revenue.
Moreover, the company has the advantage to expand its products to emerging markets where it has not ventured. Venturing in such markets is an added advantage for the company in expanding its customer base thus increasing its sales revenue. Still, there is a great need for Macy’s Company to consider increasing its products to allow its customers to have a wide variety of products from which they can make choices. In so doing, the company will attract more customers to its business thus promoting its sales revenue and profitability (Davis 120).
Finally, Macy’s needs to consider enhancing its customer service as a way of promoting it sales revenue. In an event where the sales revenue is decreasing, there is a great need for a company to focus on improving the customer services. Thus, Macy’s will need to train its employees on better ways of handling customers to foster its satisfaction level. Employee motivation is also important in helping them improve their customer service.
Works Cited
Anne, D'Innocenzio “Macy's reports 59% drop in profit, beats expectations.” Abcnews. n.d. http://abcnews.go.com/Business/story?id=6949260&page=1
Davis, Robert M. Competitive Strategies. Carlisle Barracks, PA: U.S. Army War College, 1988. Print.
Jain, Subhash C. Marketing Planning & Strategy. Cincinnati, OH: South-Western College Pub., 2000. Print.
