Macy's SWOT Analysis
Macy's has a strong market position and a high market share. In this SWOT analysis of Macy's by EdrawMax, we analyze the brand by its strengths, weaknesses, opportunities & threats.
1. Lead-in
The retail market is highly competitive and has multiple dominating players, and Macy's is one of them. From a small retail store, their journey has taken them to be one of the top retailers in the US. They have a global presence as of 2022 and have more than 511 stores, including 446 departmental stores.
SWOT analysis of Macy's can point out their strengths and weaknesses that have helped them to be in their present position. From the SWOT analysis of Macy's, you can get an idea of the opportunities and threats that can impact their future business. In this guide to master SWOT Analysis, we will introduce a free SWOT analysis Online creator EdrawMax Online that helps create wonderful SWOT analysis diagrams with utter ease.
2. About Macy's
2.1 Introduction of Macy's
Macy's is one of the largest US-based retailers and has a massive customer base. They have connected with their customers with their 160 years of experience. It has helped Macy's to emerge as a successful business. The company is headquartered in New York and deals in varied items, from accessories and apparel to furniture and decor. Macy's location at Herald Square is known to be the largest retail store in the world and is estimated to be valued at around $3 billion. The company earns most of its revenue from its US stores but is gradually trying to expand its business.
In this condition, their strengths can be helpful if they plan their future steps based on their opportunities. They can also work on their weaknesses and cushion their threats to ensure their growth. A detailed SWOT analysis of Macy's can help them gather insight into their strengths, weaknesses, opportunities, and threats. It is significant to know the basic details of the company to do an objective SWOT analysis of Macy's:
2.2 Overview of Macy's
| Name | Macy's Inc. |
| Founded | 28 October, 1858 |
| Industries served: | Fast food |
| Geographical areas served: | Worldwide |
| Headquarters: | New York, United States |
| Current CEO: | Jeffrey Gennette |
| Revenue (US$): | 24.971 billion (Dec 2020) |
| Profit (US$) | 578 million (Dec 2020) |
| Employees: | 123,000 (Dec 2020) |
| Main competitors: | Nordstrom, Amazon, SEPHORA, Wayfair, etcetera |
2.3 History of Macy's
| 1858 | Rowland H.Macy opened R.H. Macy & Co. in New York City |
| 1888 | The Straus Family went to a general partnership with Macy's |
| 1902 | Macy's moved to their new location in Herald Square. |
| 1996 | Their website Macy's.com was launched |
| 2003 | Bloomingdale enters Atlanta Market |
| 2006 | More than 400 May Company stores are converted to Macy's |
| 2008 | Macy's launched a sustainability initiative for environment protection |
| 2010 | Bloomingdale opened in Dubai, company's first international location |
| 2015 | Macy's acquired the beauty retailer Bluemercury |
| 2016 | Bloomingdale opened in Kuwait, the second international store of the brand |
| 2018 | Macy's launches online store and pick up in every location |
3. SWOT Analysis of Macy's
Strengths
- Brand Image: Macy's is one of the biggest brands in terms of retail. They have been operating for over 160 years. They have a loyal customer base, and their brand recognition is helpful for the growth of their business. Their reliability and positive brand image are an addition to their profile. They were ranked 120 by Fortune in Fortune 500 companies.
- Trusted e-commerce service: Retail market is a competitive space. Therefore, the companies must work on their physical sales as well as their e-commerce sales. Macy's has successfully upgraded their business to have an online marketplace from which they earn a significant profit. It has increased the number of its customers.
- Variety of products: As a retail store, Macy's can fulfill the requirements of a wide range of customers. They offer various products, including apparel, cosmetics, home decor, accessories, and more. Choices for men, women, and kids are there in their collection, and they have products from multiple brands, including Macy's, Bloomingdale, and Bluemercury.
- Relationship with customers: Macy's has given effort to their customer relationship management. They pay attention to customer service and address their grievances. Over the years, this has helped them have a positive brand image. They have incorporated automation in their business, which has allowed them to offer a smooth service to satisfy the customers. Thus, they have become a household name and a profitable retail brand.
Weaknesses
- Over-dependence on the US market: For their sales, Macy's is highly dependent on the US market. Therefore, the economic condition of the US will directly impact the business of Macy's. They will also be vulnerable to the socio-economic conditions of the country. At the same time, as a chunk of their revenue comes from the US market, Macy's decided to have rapid expansions in the US. As a result, they fail to provide quality service to their customers.
- Limited Presence: Though Macy's is a prominent name in the US retail market, they have failed to use its maximum potential to ensure its growth. They have not expanded in the countries that have high demand. They also have a limited presence in the countries they are operating. There are mostly one to two stores at a location. It is a drawback holding them back from further growth.
- Management issues: Macy's management has made wrong decisions, which acted against them as they tried to grow their business. Their weaknesses include failure to create a streamlined operation and execute Polaris Plan. There has been a lack of proper strategies to help the company expand and offer a smooth service simultaneously.
Opportunities
- Expansion of their Business: Since Macy's is a prominent name in the US market, it can use its resources to expand globally. They can do thorough market research to find which countries are ready with potential customers. They will gain an advantage if they plan to expand in countries with at least some brand recognition. Otherwise, they can tie up with local brands to gradually penetrate the economy. It will help them have a global presence if they can appropriately strategize their moves.
- Improving e-commerce: Macy's has already launched their e-commerce services. It has helped them successfully reach more customers. They can work on having a smooth system streamlining the operations from the supply chain to the logistics. They can work on their online business in countries with limited presence and serve with one of two stores. It will help them to determine the customers' demand, and at the same time, they can reach more customers.
- Emerging Market: For expansion, the brand can consider emerging economies. Countries like Asia, Africa, and Latin America have emerging markets where the demand for luxury items is rising rapidly. The brand can make strategies to penetrate these markets. It will not only decrease their dependence on the US market, and the process will increase their revenue.
- Mergers and Acquisitions: Macy’s has been in the market for more than 160 years, and it may lead to stagnation. They may have an innovative approach toward their business and consider mergers and acquisitions for expanding their business in a new sector. They can find suitable companies for mergers or acquisitions. It will help them to increase their presence in the market.
Threats
- Pandemic situation: The global economy is recovering as it almost collapsed due to the pandemic. The recession and inflation in some countries are also making the economy unstable. It can result in losses for retailers like Macy's.
- Change in Buying Habits: High unemployment and declining economic conditions are unfavorable for retail businesses. People are not willing to purchase luxury items, which get reflected in Macy's sales figures.
- Trade Pressure: The company depends on multiple conditions like politics, trade laws, and trade relationships between countries. When the nation's politics is not better, it can disrupt the supply chain. Hence, the business gets impacted. The present political scenario in some countries and the tension of countries with the US can negatively impact the growth of Macy's.
- Competitive market: Retail market space is competitive, with many players having loyal customer bases. Some are constantly using their innovative plans and marketing tools to reach more customers. This cut-throat competition can be a threat to their business.
Macy's SWOT Analysis Diagram
As you saw here, SWOT analysis is an integral part of any organization's progress as it not only depicts the strengths and weaknesses in detail but also introduces the opportunities and threats it faces. In order to retain the information for a long time, students and professionals are advised to work on a Macy's SWOT analysis diagram using the astounding customization options offered by EdrawMax.
4. Free SWOT Analysis Diagram Creator
Now that you have seen how easy it is to understand the SWOT of any company, let us check out some of the cool features of using the free SWOT analysis diagram software.
- This free SWOT Analysis creator is free, and even the one-time yearly fees offer many features that most other SWOT analysis software fails to provide.
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- EdrawMax lets you create 280+ diagrams, 3x times more than what Microsoft Visio offers.
- When it comes to EdrawMax, you do not have to worry about the safety and security of your files. All the files in EdrawMax are highly encrypted.
- This free SWOT analysis creator comes for Windows, macOS, Linux, and web (EdrawMax Online).
EdrawMax Online
5. Key Takeaways
The present economic condition is a significant factor that affects the business of almost all retail companies. Macy's is also vulnerable to the economic conditions of the world. It can present declining economic conditions that may harm the growth of the business. Macy's can concentrate on their online business to have more customers. They should use innovative marketing and proper planning to expand their business globally.
As you saw in this detailed guide to understanding the SWOT analysis diagrams, EdrawMax is an all-in-one diagramming tool that offers a wide range of online resources, templates, symbols, and other important elements that helps in creating wonderful SWOT analysis diagrams. With EdrawMax Online, you can share your SWOT analysis diagrams on multiple social media platforms and export them to a wide range of file formats. So, what are you waiting for? Download EdrawMax today and create some wonderful SWOT analysis diagrams for your organization.
Reference
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Dane, K., 2022. Macy's SWOT Analysis 2022 - Macy's Inc. - Business SWOT Analysis., [online]. Business SWOT Analysis. Available at: https://bswotanalysis.com/macys-swot-analysis/ (Accessed 5 September 2022).
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Parker, B., 2022. Macy's SWOT Analysis., [online] Business Strategy Hub. Available at: https://bstrategyhub.com/macys-swot-analysis/ (Accessed 5 September 2022).
