Why Macy’s Inc. Cannot Keep Up With Online Competition?


The target organization of this project is Macy’s Inc., which is one of the largest department stores in the United States. Macy’s is a retail store that supplies various products to numerous customers. Rowland Hussey Macy established Macy’s in 1858 in New York, the current headquarters. Over a century, Macy’s has grown and developed into an international retail store, offering competitive services to customers worldwide. According to Macy’s Inc. (2020), the company owns Bloomingdale’s, Bluemercury, and Macy’s as three iconic brands in 777 stores and is run by over 100,000 employees.

Bloomingdale’s is a unique iconic brand that delivers exceptional services on online and in-store platforms. Bluemercury is another iconic brand that provides luxury beauty services and products to local clients. As the major iconic brand, Macy’s is a dominant department store in the United States, retailing its services and products via physical stores, mobile applications, and e-commerce sites.

The nature of the project entails the analysis of the competitive stance of Macy’s in online markets. The tools that the project will use in examining the competitiveness of Macy’s are SWOT and Porter’s Five Forces. SWOT allows the analysis of the internal environment in terms of strengths and weaknesses (SW) and the external environment in aspects of opportunities and threats (OT). Porter’s Five Forces will be utilized to analyze the competitiveness of Macy’s in the online environment. These forces are threats of new entrants and substitute products, and rivalry, as well as the bargaining power of purchasers and suppliers.

Oneren et al. (2017) state that SWOT and Porter’s Five Forces are effective and reliable tools for developing competitive strategies for various sectors. Moreover, the project involves developing an action plan for Macy’s to enhance its competitiveness in the online arena. In essence, the action plan will provide strategies that aim to optimize strengths, overcome weaknesses, exploit opportunities, alleviate threats, and leverage the bargaining powers of customers and suppliers.

The rationale of the project is that Macy’s is experiencing challenges of increased competition in its online markets. Tokosh (2019) reports that increasing the degree of competition and diminishing sales have compelled Macy’s to close some of its freestanding stores. Moreover, the business expansion of Macy’s is limited because it has limited lines. The emergence of online technologies has contributed to increased competition in the retail industry and weakened the competitiveness of Macy’s. The limited global market hinders Macy’s from utilizing online tools and enables it to explore diverse needs across the world.

Despite its growth and development over a century, Macy’s cannot keep abreast of increasing online competition in modern society. Tokosh (2019) notes that limited branding and low adoption of e-commerce operations comprise some of the challenges that Macy’s experiences in the online market. Therefore, there is a need to analyze Macy’s and identify challenges it faces in the adoption and use of technology to exploit online markets and boost its competitiveness. This paper focuses on analyzing Macy’s using SWOT and Porter’s Five Forces to highlight why it cannot keep abreast of online competition and develop an action plan to improve its competitiveness in online markets.

Outcome Demonstration

Apply Foundational Knowledge

The project would enable demonstration of the application of foundational knowledge to achieve expected outcomes of the MBA program. In the analysis of Macy’s, the project applies competitive advantage theory in examining microeconomic and macroeconomic factors that influence performance. As business systems determine the performance of organizations, the analysis of retails systems of Macy’s, such as physical stores, online stores, distributions, accessibility to customers, and strategic locations, are critical. Additionally, the study would observe logistics, support, management, and operational systems employed by Macy’s.

Regarding the business processes, the project would examine inbound and outbound logistics that drive Macy’s supply chain. Moreover, the project would inspect processes involved in the operations, management, and support systems of Macy’s. Since technology plays a critical role in contemporary businesses, the project would focus on hardware and software technologies. As a retail business, Macy’s requires an integrated database, such as a technology for the management of inventory, e-commerce websites, mobile applications, point-of-sale programs, and retail management System.

Integrate Information

The project would also demonstrate the ability to integrate information from various disciplines to analyze Macy’s competitiveness in the online platform. The project requires integrating data from business, marketing, information technology, management, finance, logistics, entrepreneurship, and leadership. The field of business is core to this project because it informs business systems and processes that are critical in the retail industry. Marketing is an essential field since it allows Macy’s to advertise, promote, distribute, and sell its products to customers in different target markets. The advancement in technology has led to the emergence of information science and their application in business systems and processes, requiring their integration in company analysis to determine competitiveness.

Management strategies that Macy’s employs in its operations and activities are essential in determining its competitiveness in the retail industry. Finance requires integration into company analysis because adequate capital is needed to acquire assets and meet daily operating costs. As logistics dictate the nature of the supply chain and accessibility of retail products and services, its integration into the company analysis is necessary. Increasing competition in the business world demands the application of entrepreneurial knowledge and skills in various operations of Macy’s. The integration of the kind of leadership that Macy’s employs would demonstrate its competitiveness in the retail industry.

Lead and Collaborate

Since Macy’s deals with diverse products and various suppliers worldwide, it should exhibit exemplary leadership and effective collaboration. Transformative leadership is required for Macy’s to be a market leader in the retail industry, where competition is extremely high. To avail products and services at the right place and time, Macy’s ought to have a responsive supply chain. Effective collaboration between Macy’s and suppliers would ensure a continuous supply of products and services to satisfy the diverse needs of customers.

As Macy’s operates in a global environment, the adoption of information technology enables it to access remote markets and boost sales. The existence of culturally diverse customers in the international markets necessitates Macy’s to adopt and customize marketing strategies and various products that meet the distinctive cultural needs of customers. Thus, the project would demonstrate different aspects of leadership and collaboration that Macy’s utilizes in its competitive strategies.

Integrate Principles

Dealing with customers from diverse social and racial backgrounds demands the integration of ethical principles. Conventionally, businesses ought to expose ethical principles, such as honesty, integrity, loyalty, fairness, and justice to all its customers and suppliers. In the analysis of the competitive stance of Macy’s, the project would consider its adherence to the ethical principles of business. In the management aspect, the project would demonstrate how Macy’s complies with the ethical principles underlying good governance. Moreover, the project would analyze the way Macy’s aids in combating the existence of counterfeit products in markets.

Data Sources

This project will obtain sources of data from Google Scholar because it provides peer-reviewed journals with credible information relevant to SWOT analysis and Porter’s Five Forces (Oneren et al., 2017), as well as the current performance of Macy’s (Tokosh, 2019). Information regarding the present status of Macy’s will be retrieved from its website (Macy’s Inc., 2020). Financial information on Macy’s will be acquired from a reputable business magazine (Fortune, 2020). The Commodity Selection Index Market (2020) will provide the trends of stock markets for the company over time.

SWOT Analysis


Macy’s has numerous strengths, which has made it to be a leading retailer in the United States. As one of its strengths, Macy’s has established an outstanding reputation in the retail industry because of its credible and worthy services to customers. Since Macy’s has been in existence for over a century, it has created and developed its brand value and reputation by adhering to ethical business practices that ensure customers purchase quality and credible products. Macy’s Inc. (2020) prides itself on having a heritage that provides valuable and high-quality products that match American culture and tradition. In essence, Macy’s enjoys customer loyalty, which stems from its ability and capacity to offer unique and quality products to the diverse needs of consumers.

As another strength, Macy’s has managed to leverage its brand value and attain a high degree of customer satisfaction. Through its superb customer relationship management, Macy’s continues to ensure that customers get the highest level of satisfaction in the purchase and consumption of diverse and quality products. Customer relationship management enables Macy’s to listen to customers, address their complaints, and consider their tastes and preferences to achieve the highest level of customer satisfaction. Therefore, superb customer relationship management enhances not only satisfaction but also retention and attraction of consumers in the competitive market.

Macy’s has a comprehensive variety of luxury products, which has made its brand stand out amongst competitors. Macy’s specializes in three iconic brands, namely Macy’s, Bluemercury, and Bloomingdale’s, dominating the luxury fashion industry in the United States. Products of Macy’s are not only adequate but also diverse for customers to access and purchase in various stores distributed across the country.

Macy’s Inc. (2020) indicates that it offers various products, such as apparel for children, women, and men, cosmetics, fragrances, and accessories. The array of luxury products gives Macy’s a competitive advantage in the retail industry, where customer demands are diverse.

To sustain its competitiveness, Macy’s offers personalized products to customers for their special occasions. Personalized products attain or surpass consumer needs and preferences by providing unique user experiences (Oneren et al., 2017). Macy’s offers monogrammed gifts for customers to enjoy them during a special occasion, such as weddings, birthdays, graduations, and anniversaries (Macy’s Inc., 2020). With the personalization, Macy’s enables customers to celebrate their occasions with exclusive products, promoting the level of gratification. Therefore, the diversity of products and the ability to personalize them are two great strengths of Macy’s in the retail industry involved with luxury fashion.

Strong Omni-channel presence is a significant strength that has helped Macy’s to open online stores and expand its market share. With Omni-channel strategies, Macy’s allows customers to purchase products via mobile applications, websites, telephone calls, and physical stores. Omni-channel strategies are advantageous because they improve customer experience and enhance the convenience of shopping.

Significant growth of e-commerce sales comprises a strength that Macy’s boasts of in the retail industry. The adoption of Omni-channel strategies has boosted e-commerce because an increasing proportion of customers prefer shopping online. According to Fortune (2020), Macy’s is at position 120 with a revenue of $25.311 billion, profits of $564 million, and a market value of $1.520 billion. To ensure effectiveness, efficiency, and flexibility in its operations, Macy’s has integrated Omni-channel strategies to provide a seamless e-commerce experience.


Low global presence is one of the weaknesses of Macy’s that is making it unable to explore international markets and boost its competitiveness. Macy’s has opened stores in 200 locations worldwide, which is low compared to those of its competitors (Macy’s Inc., 2020). Consequently, Macy’s cannot serve customers in remote locations where there are no stores. The current economic challenges due to coronavirus have compelled Macy’s to close some of its stores in the United States and worldwide. Instead of growing into the global markets, Macy’s struggles to sustain the current stores and market share. Another weakness is that Macy’s is experiencing a declining quality of services they provide despite having a luxury brand (Tokosh, 2019).

In the past three years, Macy’s has expanded its store rapidly in the United States and across the world, resulting in reduced quality of services due to stretched resources and human capital. Moreover, employees become overwhelmed in providing critical services to customers in both physical and online stores.

Macy’s is susceptible to social-economic issues because it relies on the American market. The occurrence protests, such as those linked to the murder of Gorge Floyd, hurt Macy’s because criminals took advantage of them and looted numerous stores in various states, including a major shop in New York (Macy’s Inc., 2020). Additionally, political upheavals and inflation rates are likely to have a considerable effect on Macy’s when they happen in its target markets in the United States.

The seasonality of business is also a weakness of Macy’s because it determines the trend of demands and sales. Products in the fashion industry vary according to weather changes in various locations. While some apparels are common in winter, others are dominant in summer in line with the demands of customers. Therefore, Macy’s experiences the challenge of changing products in tandem with the seasonal needs of consumers in the market.

As a weakness, decreasing return on capital has affected the growth and expansion of Macy’s into new markets in online platforms. Since February 2020, stock prices have been declining from about $17 to the current level of about $6 (Commodity Selection Index Market, 2020).

The emergence of coronavirus in the United States contributed to the decline in market performance by Macy’s as indicated by the trends of stock prices, profits, sales, and return on assets. According to Fortune (2020), the return to investors of Macy’s decreased by 38.8% in 2019, while a five-year trend shows a 20% decline. Hence, reduced returns present a significant weakness of Macy’s despite making a profit of $654 million in 2019. The adoption of technology to automate operations of the supply chain and improve online experience has created an emotional disconnect between the company and its customers (Tokosh, 2019). The loss of humanized engagements seems to reduce customer satisfaction and, consequently, related retention and attraction efforts.


Since Macy’s has a low global presence, international markets offer excellent opportunities for growth and expansion of market share. Currently, as Macy’s operates in 200 locations across the world, they are no adequate to serve all of its potential customers in various countries and cities (Macy’s Inc., 2020). Instead of upgrading the current stores, Macy’s requires to open new stores in strategic locations around the world for it to be accessible and convenient for customers to purchase diverse products. In addition, Macy’s has immense opportunity in the expansion of e-commerce and boosting its sales.

Since customers have different preferences for buying products, Macy’s needs to expand e-commerce sales by providing compatible mobile applications, flexible payment, convenient logistics, effective interaction, and friendly offers. Moreover, the adoption of new technologies would enable Macy’s to keep abreast of trends essential for expanding e-commerce tools.

Macy’s has a great opportunity for diversification since it deals with three lines of luxury products. Limited lines of products present high risks because changes in market conditions and factors predispose Macy’s to huge losses. In the luxury brand markets, diversification is necessary because customers require personalized products, such as shoes, clothes, apparel, sportswear, and cosmetics. Furthermore, diversification into spa services, household items, and electronics would enable Macy’s to overcome the challenge of low sales due to the seasonality of its products (Tokosh, 2019).

Another opportunity Macy’s have is the exploration of emerging markets in Asia, Africa, and Latin America. With online stores, Macy’s can provide consumers in these markets with not only current products but also diversified ones, thus satisfying their unique needs. Therefore, diversification and exploration of emerging markets would enable Macy’s to expand its market share and augment its competitive advantage.

Mergers and acquisitions comprise growth opportunities of Macy’s in the competitive online markets where other companies dominate. By employing vertical, horizontal, and concentric mergers, Macy’s would be in a position to enlarge market share, exploit synergies, and diversify the products it offers. The strategy of acquisition provides an opportunity for Macy’s to venture into new markets and get additional capital, resources, and distribution channels. For successful diversification and penetration of emerging markets, mergers and acquisitions provide effective strategies.


The increasing level of competition, trade pressures, global recession, uncertain pandemic trends, the declining lucrativeness of the retail sector, and decrease in tourist footfall are some of the threats to Macy’s. The fashion retail industry experiences an increasing degree of competition because Amazon, Walmart, Dillard, Kohl’s, Nordstrom, and JC Penney offer similar products. The dominance of these competitors makes it difficult for Macy’s to penetrate and expand its market share. Stiff competition in the online markets threatens the growth of Macy’s in local and international target markets. Trade pressures also comprise a threat to operations of Macy’s in local and global arenas. For instance, trade wars between China and the United States have led to the introduction of tariffs and increased prices (Tokosh, 2019).

High inflation rates, political sanctions, trade wars, and unfavorable economic conditions have reduced the performance of Macy’s and threatened its dominance in major markets. For example, in 2019, the stock market of Macy’s declined by 50% owing to sustained global trade pressures (Commodity Selection Index Market, 2020). The decline has reduced the investment capacity of Macy’s and threatened its survival in dependable markets.

As an international company, Macy’s is susceptible to global economic factors, such as economic recession and oil prices. In the previous global economic downturn, Macy’s registered the lowest sales and stock prices. Fluctuations in oil expenses have affected manufacturing and transport costs, leading to changes in prices of commodities. The decline in the purchasing power of consumers due to economic recessions decreases sales and profitability of retail products, hence threatening the sustainability of Macy’s. The emergence of the pandemic in 2019 has threatened the growth and expansion of operations since Macy’s has closed numerous physical and online stores in the United States and worldwide. Lockdowns and cessation of movements in local and international travels have prevented the purchase and distribution of retail products leading to a significant decline in sales.

The declining lucrativeness of the retail industry is a significant threat to the growth and development of Macy’s in the United States and across the world. Since 2015, stock prices of Macy’s have decreased significantly due to changes in trends of the retail industry (Commodity Selection Index Market, 2020). One of the factors contributing to waning profits is changes in consumer preferences to online stores that offer various products to customers. As tourists are dominant customers of Macy’s, their decreasing numbers, owing to restricted international tourism, threaten revenue growth. The pandemic has restrained international travel, ceased the hospitality industry, and interfered with the shopping experience of customers. The unpredicted nature of the pandemic projects sustained adverse effects on the growth and expansion of Macy’s.

Porter’s Five Forces

Industry Rivalry

The analysis of Macy’s using Porter’s Five Forces shows that it operates in the retail industry, where competitive rivalry is high. Being an American company, Macy’s is one of the leading retailers that provide services to consumers in the United States and across the world. JC Penny, Kohl’s, Nordstrom, and Dillard’s are some of the local competitors of Macy’s because they offer similar products in the market (Macy’s Inc., 2020).

JC Penny is an American company that operates in 49 states and owns over 840 stores, which specialize in clothing, sportswear, cosmetics, jewelry, electronics, housewares, toys, furniture, and appliances. Kohl’s is the largest department store in the United States, with over 1000 stores distributed across most states offering clothing, decor, jewelry, footwear, toys, bedding, furniture, electronics, beauty products, and housewares. Nordstrom has 117 stores in over 40 states, and Dillard’s operates 282 stores distributed in 29 states in the United States. Thus, Macy’s experiences intense competition in various states and cities where its competitors have opened stores.

The diversity of retail firms in the industry offers intense competition in various business areas and markets. Since diversification provides an opportunity for Macy’s to remain competitive, the existence of diverse retailers makes the degree of rivalry very high. In a bid to diversify into electronics, housewares, decor, and appliances, Macy’s would experience a lot of competition from major retailers. Amazon, Walmart, eBay, Costco, and Kroger are major retailers in the United States, making competition intense for Macy’s to diversify and differentiate into various niches. These retailers are competitive because they make over $100 billion in sales per year, whereas Macy’s generates about $25 billion.

Therefore, for Macy’s to diversify and differentiate into niches of these retailers, it must generate competitive revenues and gain significant market share. Furthermore, the adoption and use of e-commerce tools have become a competitive strategy for retailers to exploit online markets (Tokosh, 2019). Competitors have aggressively utilized e-commerce platforms to penetrate and expand online markets into international arenas. Hence, the way retailers use e-commerce tools determines their competitiveness in markets where consumers prefer online shopping.

Bargaining Power of Suppliers

The bargaining power of suppliers is weak because Macy’s has the upper hand in setting prices and choosing the quality of different products. In the United States and around the world, suppliers strive to manufacture quality products that meet the standards of not only Macy’s but also high-end consumers in various target markets (Macy’s Inc., 2020).

Based on the law of supply and demand, a high number of suppliers weakens their bargaining power and offers Macy’s an advantage in choosing appropriate products for specific target markets. In essence, suppliers do not have a significant influence on decisions that Macy’s make in the luxury market of their products. Suppliers have minimal options in complying with rules and regulations formulated by Macy’s in the retail industry. In this industry, Macy’s has the advantage of leveraging on the weak bargaining power of suppliers to increase profits and enhance the quality of products.

Since the bargaining power of suppliers is low, it implies that diverse products are available in the market. Suppliers experience a high level of competition because their products have flooded limited markets provided by retailers. Consequently, suppliers have to avail competitive products to attract Macy’s and satisfy the trendy tastes and preferences of customers. The existence of tough competition compels suppliers to offer quality and affordable products to loyal consumers of Macy’s.

The weak bargaining power of suppliers reduces the switching costs of Macy’s when changing products and target markets. It is easy for Macy’s to diversify its products in an online environment where suppliers are readily available with unique designs and assorted brands. In contrast, Macy’s has loyal suppliers because their switching costs are high, making it difficult for them to change retailers. Tough competition and the availability of diverse products provide a favorable environment for Macy’s to flourish in online markets where consumers are readily present and accessible.

Bargaining Power of Consumers

Since Macy’s deals with luxury products, the bargaining power of consumers is high in different target markets of the retail industry. With iconic brands, Macy’s emphasizes product quality and satisfaction of customers in the luxury markets (Macy’s Inc., 2020). As a retailer, Macy’s ensures that it receives quality products from suppliers promptly to meet deadlines, utility, and preferences of customers. The analysis of consumers shows that they have low switching costs because they have access to various products that match their tastes and preferences. In this perspective, Macy’s has a great challenge in attracting and maintaining customers in a particular line of products they offer. Without aggressive marketing strategies, Macy’s is likely to lose its loyal customers to competitive retailers in the luxury industry. Hence, quality products and extensive marketing enable Macy’s to overcome the challenge of the high bargaining power of consumers.

The availability of products, the presence of informed customers, and the rising trend of online retailing are three significant factors that increase the bargaining power of buyers. Retail stores ensure that they supply diverse products to the market for customers to have a wide range of choices and bargain according to their prevailing needs. In essence, when consumers purchase from Macy’s and other retailers, they have an edge of selecting the best products in the markets and get value for their money.

Consumers in the luxury market understand the nature of products they want, and, thus, they compel suppliers and retailers to offer specific features and details (Tokosh, 2019). With high bargaining power, consumers demand suppliers and retailers to provide products with an explicit degree of quality, tastes, and preferences. The rising trends of online retailing, which leading retailers have adopted, comprise one of the bargaining forces of customers. Online retailing is beneficial to consumers because it reduces shopping hassles of physical stores and saves a great deal of time. Therefore, consumers drive the need for Macy’s to adopt and utilize online retailing in both local and international markets.

Threat of New Entrants

The threat of new entrants is high because the industry is attractive to other retailers dealing with other brands. To enter the industry, governments do not impose stringent policies and regulations since products in the market have met the required standards and conditions of safety and utility. The cost of brand development is low since retailers already have met all legal requirements. The current retailers require differentiating their products as a major intervention to venture into the retail industry and effectively compete with Macy’s (Tokosh, 2019).

By differentiating into luxury brands in cosmetics, jewelry, housewares, sportswear, and clothing, retail companies, such as Amazon, Walmart, and eBay, would provide significant competition to Macy’s in the retail industry. Having adequate capital is another requirement that new entrants need to venture into this industry. The luxury retail industry needs a lot of capital for purchasing a variety of products in large quantities to increase the economies of scale. Since suppliers have low bargaining power, they normally avail their products on credit for retailers to market and sell for them to register significant sales.

Retailing companies wishing to venture into this industry require strategic stores, established distribution channels, and secure e-commerce platforms. Retailers intending to venture into the industry have the advantage of having strategic stores in various countries and cities, which they can use as their shops for luxury brands. With established distribution channels, new entrants do not need to create novel supply chains. The threat of new entrants is high because established supply chains provide critical infrastructure for distributing products to existing strategic stores. The existence of e-commerce platforms also increases the threat of new entrants into the retail industry. Amazon, Walmart, and eBay could simply add their differentiated products into their e-commerce sites for customers to view and purchase them at their convenient locations.

With low switching costs for consumers, new entrants have the advantage of growing their market share. The attainment of economies of scale is low since there are many suppliers and diverse products. Thus, new entrants need strategic stores, elaborate supply chain, and updated e-commerce sites to achieve economies of scale, generate adequate revenues, and make considerable profits.

Threat of Substitutes

The threat of substitute products is high because Macy’s operates in the retail industry, where suppliers are diverse. The high threat of substitutes implies Macy’s can easily lose its loyal customers to other competing brands in the market. With the low bargaining power of suppliers, Macy’s enjoys the availability of different products and the ability to satisfy the varied interests of customers (Macy’s Inc., 2020).

However, the setback is that threat of substitute products is high and endangers its sales in the retail industry. Key competitors, such as JC Penny, Kohl’s, Nordstrom, and Dillard’s, offer substitute products in sportswear, cosmetics, jewelry, housewares, and clothing brands. Shoppers in the retailing industry have access to different substitute products via online platforms. Since luxury consumers can access information about diverse products, they make an informed choice regarding their tastes and preferences. Macy’s experiences the challenge of retaining customers because substitutes threaten their loyalty to specific products.

The high threat of substitute products means that customers have low switching costs in the retail industry. For instance, substitute products in competing industries provide alternatives for customers to purchase and utilize. Consequently, Macy’s struggles to elevate the switching cost of consumers and improve its performance. In this retail industry, customers quickly change their tastes and preferences from one product to another within Macy’s or other industries. Given that Macy’s offers quality products and affords a high degree of services to its customers, it enjoys a sizeable market share (Tokosh, 2019).

Nevertheless, a low-switching cost of consumers makes the market share fragile and threatens the growth of sales. Furthermore, a high threat of substitute products reduces the prices. When products are available in large quantities and varieties in the markets, prices tend to decline owing to competition. Among customers, low prices encourage consumption but decrease revenues and profits. Therefore, the low cost of substitutes strengthens the threat and makes it hard for Macy’s to dominate the market share.


Since Macy’s has a strong brand, it should continue improving and sustaining it in the retail industry to overcome increasing online competition.

With a high degree of customer satisfaction as a strength, Macy’s needs to optimize it to attract and retain customers in the competitive online platforms.

As a wide variety of products is a strength, Macy’s needs to expand and diversify its iconic brands to meet the varied needs of customers and avert setbacks of specialization in a few lines.

Macy’s should open additional stores in various countries to meet the demands brought about by strong Omni-channel presence in online markets across the world.

As Macy’s ranks 120th in Fortune 500 list of companies, it should continue to grow its assets, revenue, and profits by investing additional resources in Omni-channel operations.

Macy’s should expand its global presence by opening strategic stores in most countries and cities for it to exploit its Omni-channels and grow market share.

In expanding stores and operations, Macy’s needs to hire additional employees to ensure that they provide consistent quality services without overwhelming available resources.

Macy’s needs to expand its target market to other countries to lessen overreliance on the local market and averting the huge impact of social, economic, and political issues on business.

To overcome the challenge of the seasonality of the business, Macy’s should increase the diversity of its products and synchronize them with respective seasons across the year.

Owing to the declining return on assets, Macy’s needs to boost its investments and enhance marketing strategies to increase sales and profits.

The declining humanized engagements due to the automation of operations in online platforms require Macy’s to boost interventions of customer relationship management.

Macy’s should strengthen its global presence by opening new stores in strategic locations because they offer potential expansion opportunities.

The expansion and upgrade of e-commerce tools are necessary for Macy’s to access remote markets and augment its sales in the online environment.

Macy’s requires diversification of its products to explore the opportunities in the cosmetic industry, household products, and electronics.

In global expansion and diversification, Macy’s has to focus on emerging markets where the competition is low.

Successful diversification and expansion into novel markets require Macy’s to adopt mergers and acquisitions as integral strategies.

To overcome the increasing level of competition, Macy’s must upgrade online tools and expand stores to enhance purchasing expediency of customers.

Macy’s should overcome the threats of trade pressures, economic recessions, and pandemic disturbances by adjusting its operations and investing additional capital.

Changes in consumer preferences and the emergence of coronavirus compel Macy’s to shift its business to online platforms.

Given that Macy’s operates in the retail industry with a high degree of competition, it must adopt aggressive competitive strategies by increasing investments, differentiating its products, and upgrading its e-commerce tools.

Macy’s should take advantage of the weak bargaining power of suppliers to lower prices, increase product quality, and augment profits.

Since the availability of products is high owing to the low bargaining power of suppliers, Macy’s needs to differentiate, diversify, and integrate its business strategies.

To meet the high bargaining power of consumers, Macy’s has to ensure that it offers diverse products and upgrade its Omni-channel strategies to meet the modern requirements of online retailing.

To lower the threat of new entrants, Macy’s should deal with innovative products and services that offer an increased level of competitiveness in the retail industry.

As Macy’s operates in the retail industry with a high threat of substitutes, it should focus on providing quality services in online platforms to enhance the switching costs of consumers.

Macy’s needs to focus on economies of scale to sustain its sales and profits as a way of withstanding an increasing threat of new entrants.


Macy’s is one of the leading department stores in the United States, which is experiencing immense competition in the luxury retail industry. Despite having numerous strengths, Macy’s is unable to keep abreast of the online competition due to low global presence, declining services, diminishing profits, current pandemic, and prevailing socioeconomic issues. The analysis of opportunities shows that Macy’s can increase global presence, improve e-commerce, diversify products, and integrate with other retailers. However, threats, such as high competition, trade pressures, economic recessions, the pandemic, and the deteriorating retail industry, seem to endanger the sustainability of Macy’s in the online platforms.

The analysis of the market using Porter’s Five Forces revealed that the bargaining power of suppliers is low while that of customers is high. Both threats of new entrants and substitute products are high because Macy’s operates in a competitive industry. Therefore, this paper recommends Macy’s to improve its strengths, overcome weaknesses, exploit opportunities, and alleviate its threats. Moreover, this paper recommends Macy’s to increase its competitiveness, leverage the bargaining power of suppliers and customers, and ready to cope with threats of new entrants and substitute products.


Commodity Selection Index Market. (2020). Macy’s Inc. Web.

Fortune. (2020). Macy’s: Company information. Web.

Macy’s Inc. (2020). About Macy’s. Web.

Oneren, M., Arar, T., & Yurdakul, G. (2017). Developing competitive strategies based on SWOT analysis in Porter’s five forces model by DANP. Journal of Business Research, 9(2), 511-528. Web.

Tokosh, J. (2019). Is the Macy’s in my mall going to close? Uncovering the factors associated with the closures of Macy’s, Sears, and J.C. Penney stores. Journal of Urban and Regional Policy, 50(1), 403-423. Web.

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