Macy’s Department Store Repositioning
BUS 2275 Business Strategy and Simulation–Section 050
Instructor: Anish Bania
Due Date: Jan 16, 2013
Table of Contents Executive Summary 2 Statement of the problem/opportunity/and objectives 2 Analysis of the situation 2 External and internal 2 Porter’s five –forces model 3 1. The threat of new entrants. 3 2. The bargaining power of buyers. 3 3. The bargaining power of suppliers. 4 4. The threat of substitute products and services. 4 5. The intensity of the rivalry among competitors in an industry 4 Unique and a sustainable competitive advantage 4 Identification and evaluation of alternatives 5 Macy’s Future 5
As the …show more content…
2. The bargaining power of buyers.
Buyers threaten an industry by forcing down price, bargaining for higher quality or more service, and playing competitors against each other. Macy’s has lower cost but because of the bad economic, the customers have little bargaining power.
Secondly, Macy’s already had everyday value. They give lower price means they will get lower profit. Low profit creates incentives to lower purchasing costs. However, highly profitable buyers are generally less price sensitive. 3. The bargaining power of suppliers.
Supplier power refers to the ability of providers of inputs to determine the price and terms of supply. Suppliers can exert power over firms industry by raising prices or reducing the quality of purchased goods and services, so reducing profitability. After Macy’s consolidation, Macy’s bought mass amounts from same buyers and Macy’s have strong relationship with these buyers. The bargaining power of suppliers is really high. 4. The threat of substitute products and services.
All firms and industry compete with other industries offering substitute products or services. The threat of substitute products and services was the major concern, particularly with discounters such as Target offering similar products, and large chain that specialized in clothes such as H&M. 5. The intensity of the rivalry among