Environmental Pressures
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Create a table where at least three (3) organizational pressures and at least three (3) environmental pressures in the organization are illustrated and rank those pressures according to their influence.
Environmental Pressure
Market Decline -Rank 1
Hypercompetition-Rank 2
Reputation &Credibility
Rank 3
Macys Inc.s ( M – Analyst Report ) recent announcement of trimming its fourth-quarter fiscal 2012 earnings guidance triggered a downward trend in the Zacks Consensus Estimates.
One of Macys main competitors in the multiline retail industry, Target (TGT) Saks (SKS), J.C. Penney Company (JCP), and Kohls (KSS
Macys, Inc. believes strongly in good corporate governance and transparency in financial reporting.
Organizational Pressures
Growth -Rank 1
Integration& Collaboration
Rank 2
New Broom -Rank 3
The company has reported increasing profit for three straight quarters. In the third quarter, net income rose 1290% while it rose 63.9% in the second quarter and more than fivefold in the first quarter
Federated Department Stores, Inc. (renamed Macys, Inc. in June 2007) was born through the combination of Abraham & Straus of Brooklyn, Filenes of Boston, F&R Lazarus & Co. of Columbus, OH, and Bloomingdales of New York
Macys launches a new customer loyalty program, with escalating benefits for its largest customers, as it issues new credit cards for about 14 million accounts.
Federated acquires The May Department Stores Company. The acquisition creates a stronger, more resourceful company with more stores nationwide.
Describe in detail the environmental and organizational pressures that exist in the organization and how they have evolved over time.
The environment pressure that Macys facing was their biggest competitor like Target, Kohl, Saks, Jcpenny. Since the recession, Macys is dominating its competition and bouncing back from the recession by doing many little things well: adding local flavor to its stores, snagging hit exclusives like Madonnas clothing line and keeping its own costs under control(DJC,2012). The department stores results are among the first in a pile of retail earnings reports over the next two weeks. They could put more pressure on competitors like Kohls Corp. and J.C. Penney Co., both of which cater to shoppers on tighter budgets and are consequently more vulnerable to escalating costs of household basics. Macys based in Cincinnati, reported net income of $131 million, or 30 cents per share, for the three months that ended April 30, easily beating forecasts for 18 cents per share. That compares with $23 million, or 5 cents per share, in the same period last year.
The organizational pressure that exist in Macys is called New Broom pressure, which Macys notice in the year 2007 consumer was slowing down buying merchandise. This pressure cause Macys Chairman and CEO Terry Lundgren conceived the localization strategy as consumer spending was slow. Macys is not immune to rising costs and has started to push higher prices through to consumers. In some cases, shoppers have not resisted small increases. In others, they have pulled back some, but Macys had cut its orders. Macys is covering “the retail basics” like faster turnover of goods and better customer service, said Craig R. Johnson, president of Customer Growth Partners, a retail consultancy in New Canaan, Conn. Its exclusive celebrity merchandise, which includes Tommy Hilfiger sportswear and Martha Stewart home furnishings, as well as Material Girl from Madonna and her daughter, Lourdes, has helped it attract customers.
Explain how the identified environmental and organization pressures impact the company from a financial perspective.
Looking at Macys from a financial perspective it was impacted by two forces environmental and organization pressures. The external pressure improves the way Macys reach out to their consumer through their shopping experiences, stores renovation, and technology. For example, in the past year the department store, which had 2011 net sales of $26.4 billion, has greatly improved its inventory strategy by building new warehouses and drafting nearly 300 stores to act as e-commerce fulfillment centers. Online orders will rarely be out of stock. Macys internet transactions crossed the $2 billion mark for the first time in 2012, according to a company spokesman. By late 2011, develop a new strategy to help with their internal pressure. Macys piloted a “store-to-door” strategy in which stores, in addition to warehouses, were used as fulfillment centers for online orders.
The system specifically targets the Macys locations with an overflow of specific items, so that the store can move the merchandise without resorting to discounting at the end of the season. By late last year, the program had been rolled out to nearly 300 stores. About 10% of online purchases are currently fulfilled by stores(Crain,2013). In addition to their internal pressures, Macys develop three key strategies to drive sale growth which is called My Macys localization, omnichannel integration and MAGIC Selling. Macys believes with this combination this will improve these sales in the near future.
Explain how the identified environmental and organizational pressures impact you personally and / or the other employees of the company.
At first I was excited and nervous at the same time, however Macys training made me a better sales person. Two years ago, Macy introduces to the company the “Magical of Selling”. This was an aid to help us improve our engagement to customers in the store. We were train to meet and make a connection, ask questions and listen, give options, give advice, inspire to buy, and celebrate the purchase. To date, Macys store associates have been through more than 1 million hours of MAGIC training.
As part of the MAGIC Selling process, they place ever-more emphasis on coaching of sales associates on the selling floor by their managers. They provide us with more tools, training, resources and encouragement to the