Business Case Study: Macy's Federated Department Stores

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Macy 's management has the opportunity to continue stemming the cash drain by reorganizing the company along geographic lines.
• Another retail giant, Federated Department Stores, agreed in the Summer of 1994 to merge with Macy’s so as to create one of the nation 's largest department store chains and further intensify California 's competitive retail environment where Macy’s has most recently found its greatest “land of opportunity.” Federated is assisting Macy’s in the development of a joint plan to help them emerge from its huge downfall. Under the terms of one proposed agreement, Federated would take on most of Macy 's huge $6-billion debt and Macy’s would operate independently under a Federated umbrella giving them an opportunity to
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While the present economic outlook is indeed quite good, genuine success typically requires a reason for improvement. In this case, much of Macy’s recently demonstrated resilience to macro environmental factors has been the result of Federated’s help. While the new executive team is also doing an impressive job at cutting costs and maintaining Macy’s positive reputation, they do not seem to be doing very much to define the company’s long and short-term goals anytime soon. Such is quite distressful when one considers how behind Macy’s is in technological advancements and the much-needed venture into …show more content…
The fact that Federated is “piggybacking” them now does not help that much when considering Macy’s goals of independence. To date, it is my assessment that the creation of more specific short and long-term goals should be Macy’s primary goal.
• Macy’s would be wise to explore the “on-line market” and seek to expand its current broadcasting channel into World Wide Web Pages and CD-ROM catalogs for the fundamental purposes of more effective competition. Studies consistently demonstrate that the usage of this new medium will be detrimental to the success of most companies during the first quarter of the next century.
• As large as Macy’s is-- and as well as it has managed to do outside of the New York City Metropolitan area in recent decades, I strongly recommend that the company conduct a study of international markets to determine a potentially effective way for it to develop Macy’s outlets overseas; particularly in Europe. In the years between now and 2000, it would be most wise for Macy’s to concentrate on its image. A large part of its recent failures have been the result of inconsistent planning, strategy, and projected imagery initiated during the years that Finkelstein was President. If Macy’s is to change for the better, the company will have to become more consistent in all aspects of its strategy, planning, and market

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