Moving Macy’s Forward: Solving Productivity Problems Caused By Stagnation
I. An Overview of Macy’s History & Strategy The very first Macy’s was opened in New York City by Mr. Rowland H. Macy in 1858. Thematically, the store differed from its contemporaries in the sense that Rowland Macy adamantly refused to specialize in just one type of item. By selling an assorted variety of products, Macy created the city’s first modern department store. Almost immediately, the store was a huge success with gross sales volume surpassing one million dollars in 1870 after just twelve years of operation. Soon thereafter, Macy’s moved to New York City’s Herald Square re-establishing itself in an enormous building which still houses the world’s largest…show more content… • Macy’s first century of success was built on an entirely different concept. That concept has been altered dramatically by trendy, contemporary executives who have experienced very little success thus far and yet continue to take innovative risks.
• Macy’s continues to lose key executives who were loyal to former President Finkelstein.
• Macy’s struggles to recover from Chapter 11, yet its stubbornness to strive for continued independence (prior to the Federated deal) had cost it an enormous amount of time and over $ 1.25 billion dollars in additional losses during the 1992 - 1994 years. Choosing between three plans for recovery, the company lost an enormous amount of money (millions just in consulting fees !) and exhibited enormous administrative difficulty in coming to an important decision.
• Contemporary investors are largely cited as having lost faith in retail and their eyes, minds, and most importantly--their pockets have turned to technology
• Fierce competition in the retail industry constantly pushes prices downwards often allowing only those who can afford to slash prices and temporarily cover minimal or null profits to succeed. Mark-up has become greatly reduced and there is little room left for the over-priced specialty outlets or even for a new company to enter the retail arena on a…show more content… • If Macy’s fails in anyone of their new “ventures,” the impact could be devastating (loss of investment while cashflow is already poor).
• Macy’s remains a bit unstructured; stores in different geographic regions attempt to cater to different markets thus leaving Macy’s general image undefined on a national scale; The company is threatened by numerous competitors including Stern’s, Gimball’s, J.C. Penny’s and others. • Those companies that are not able to make a successful transition into the technological world of computer shopping and various other similar new mediums will be threatened devastatingly by those who can. Analysts predicted at the commencement of this decade that electronic sales would have a tremendous impact on retailer’s revenue and with nearly 10,000,000 people “surfing the internet” already, they have been proven to be correct. • Socioeconomically, the United States is reported to have placed an increased emphasis on the success of small businesses. Restrictions, laws, and regulations constantly impede upon the sometimes monopolistic hungers of large companies. In retail, a lack of community support and concern has contributed to the current financial collapse of several