Macy's: Evolution in the Sunshine State SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Macy's: Evolution in the Sunshine State
In 2009, Lee O'Rourke was promoted to District Vice President in charge of Macy's newly created North Florida district. This district consisted of 11 stores located in the greater Orlando area and in the east coast towns of Daytona, Melbourne, Merritt Island, and Vero Beach. The performance of these stores had lagged in recent years, and O'Rourke was charged with building a cross-functional district team to support these stores and with improving their overall performance. O'Rourke and her team were able to drive almost immediate improvement in the district's sales growth and profitability and in other key areas such as customer service scores. How can O'Rourke ensure that these stores continue to perform well going forward?
Authors :: Boris Groysberg, Das Narayandas, Benson P. Shapiro, Sarah L. Abbott
Swot Analysis of "Macy's: Evolution in the Sunshine State" written by Boris Groysberg, Das Narayandas, Benson P. Shapiro, Sarah L. Abbott includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that O'rourke District facing as an external strategic factors. Some of the topics covered in Macy's: Evolution in the Sunshine State case study are - Strategic Management Strategies, Change management, Leadership, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Macy's: Evolution in the Sunshine State casestudy better are - – technology disruption, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, geopolitical disruptions, there is backlash against globalization, increasing energy prices, challanges to central banks by blockchain based private currencies,
talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Macy's: Evolution in the Sunshine State
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Macy's: Evolution in the Sunshine State case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the O'rourke District, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which O'rourke District operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Macy's: Evolution in the Sunshine State can be done for the following purposes –
1. Strategic planning using facts provided in Macy's: Evolution in the Sunshine State case study
2. Improving business portfolio management of O'rourke District
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of O'rourke District
Strengths Macy's: Evolution in the Sunshine State | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of O'rourke District in Macy's: Evolution in the Sunshine State Harvard Business Review case study are -
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For O'rourke District digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. O'rourke District has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Highly skilled collaborators
– O'rourke District has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Macy's: Evolution in the Sunshine State HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that O'rourke District has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Learning organization
- O'rourke District is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at O'rourke District is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Macy's: Evolution in the Sunshine State Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the O'rourke District are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Training and development
– O'rourke District has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Macy's: Evolution in the Sunshine State Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Superior customer experience
– The customer experience strategy of O'rourke District in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– O'rourke District is one of the most innovative firm in sector. Manager in Macy's: Evolution in the Sunshine State Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– O'rourke District has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled O'rourke District to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– O'rourke District has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Macy's: Evolution in the Sunshine State - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– O'rourke District is one of the leading recruiters in the industry. Managers in the Macy's: Evolution in the Sunshine State are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of O'rourke District
– The covid-19 pandemic has put organizational resilience at the centre of everthing that O'rourke District does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Macy's: Evolution in the Sunshine State | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Macy's: Evolution in the Sunshine State are -
High bargaining power of channel partners
– Because of the regulatory requirements, Boris Groysberg, Das Narayandas, Benson P. Shapiro, Sarah L. Abbott suggests that, O'rourke District is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Low market penetration in new markets
– Outside its home market of O'rourke District, firm in the HBR case study Macy's: Evolution in the Sunshine State needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of O'rourke District products
– To increase the profitability and margins on the products, O'rourke District needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Macy's: Evolution in the Sunshine State that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Macy's: Evolution in the Sunshine State can leverage the sales team experience to cultivate customer relationships as O'rourke District is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Macy's: Evolution in the Sunshine State HBR case study mentions - O'rourke District takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Macy's: Evolution in the Sunshine State, is just above the industry average. O'rourke District needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Capital Spending Reduction
– Even during the low interest decade, O'rourke District has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Macy's: Evolution in the Sunshine State, in the dynamic environment O'rourke District has struggled to respond to the nimble upstart competition. O'rourke District has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Macy's: Evolution in the Sunshine State HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though O'rourke District has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Macy's: Evolution in the Sunshine State has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract O'rourke District 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Macy's: Evolution in the Sunshine State, it seems that the employees of O'rourke District don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Macy's: Evolution in the Sunshine State | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Macy's: Evolution in the Sunshine State are -
Better consumer reach
– The expansion of the 5G network will help O'rourke District to increase its market reach. O'rourke District will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– O'rourke District has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, O'rourke District can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, O'rourke District is facing challenges because of the dominance of functional experts in the organization. Macy's: Evolution in the Sunshine State case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. O'rourke District can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for O'rourke District to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Developing new processes and practices
– O'rourke District can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Creating value in data economy
– The success of analytics program of O'rourke District has opened avenues for new revenue streams for the organization in the industry. This can help O'rourke District to build a more holistic ecosystem as suggested in the Macy's: Evolution in the Sunshine State case study. O'rourke District can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for O'rourke District in the consumer business. Now O'rourke District can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– O'rourke District has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Macy's: Evolution in the Sunshine State - to build a competitive advantage using analytics. The analytics driven competitive advantage can help O'rourke District to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at O'rourke District can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, O'rourke District can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Macy's: Evolution in the Sunshine State, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, O'rourke District can use these opportunities to build new business models that can help the communities that O'rourke District operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Threats Macy's: Evolution in the Sunshine State External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Macy's: Evolution in the Sunshine State are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of O'rourke District.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of O'rourke District business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– O'rourke District has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, O'rourke District needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for O'rourke District in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing wage structure of O'rourke District
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of O'rourke District.
Shortening product life cycle
– it is one of the major threat that O'rourke District is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– O'rourke District needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. O'rourke District needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Macy's: Evolution in the Sunshine State, O'rourke District may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. O'rourke District will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, O'rourke District can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Macy's: Evolution in the Sunshine State .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for O'rourke District in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of Macy's: Evolution in the Sunshine State Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Macy's: Evolution in the Sunshine State needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Macy's: Evolution in the Sunshine State is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Macy's: Evolution in the Sunshine State is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Macy's: Evolution in the Sunshine State is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that O'rourke District needs to make to build a sustainable competitive advantage.