Case Study Macy's Essay

2414 Words Jun 11th, 2013 10 Pages
Macy’s Department Store Reposition Case Study


Tina Parker

In Partial Fulfillment of Course Requirements for
BUS 530A Marketing Management
California Baptist University
Dr. Natalie C. Winter

May 21, 2013

Executive Summary The case study is Macy’s Department Store Repositioning. The key problem is that the traditional department stores sales and profits are declining. There are specialty stores, discount stores, and online stores that offer similar products at a fraction of the cost for the most part. However, in the declining market for the department store industry, Macy’s consolidated stores, established a national department store and continues to make a steady profit. It is usually the time to divest, sale,
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PEST is the political, economic, social and technology economic environmental factors that affect the product or in the case the department store industry. The political analysis looked to the future and the additional health care costs that will be imposed on companies and fully implemented by 2014. The additional costs will be passed on to the consumer, and the amount will have an impact on the return on equity ratio, which is already below the industry desirable rate. The economic factors considered were the continued recession, increase in the coast of gas and cotton, the threat of substitutions and the life cycle of the department store industry. All the above economic factors will impact the cost of the products to the customers and further make the other stores appealing with less disposal income to spend on luxury items purchased in a department store. The other stores would be Wal-Mart, Target or other discounted stores. As with any change, change is hard to accept and customers will likely complain, find fault and decide not to shop at the department store. It is the social norm. However, once the regional company’s were converted to Macy’s, customers saw the price increases, which in turn caused them not to shop at Macy’s. Again, change and increase in cost are not easy for customers to accept or want to accept. Also, they can find similar products for less at

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