Macys EFE Matrix and CPM

MACY’S

Macy’s EFE Matrix and CPM: Enhancing the Company’s Competitive Advantage

From the onset, it would be prudent to note that as Godfrey (2015) indicates, the relevance of the EFE matrix cannot be overstated when it comes to the evaluation of the external environment of an enterprise and identification of both threats and opportunities. This particular tool, as Godfrey (2015) further indicates, was first introduced in a book titled Strategic Management, by Fred R. David. In the case of Macy’s EFE matrix, weights have been assigned so as to indicate how important each of the identified factors are. This is especially important given that not all factors are of the same level of importance. Thus, for Macy’s to succeed in this particular industry, it should be aware of which factors should be prioritized. The assignment of weights comes in handy on this front. Thus, the most important opportunities for Macy’s are inclusive of online shopping, technology, expansion, and its Polaris plan. This is more so the case given that they have a relatively high rating. On the other hand, the most crucial threats are inclusive of supply chain and third party risk; global, legal, and external risks; economic conditions; newcomers; apparel manufacturers seeking to offer for sale products directly to consumers; the unique challenges posed by the pandemic; and the growth of ecommerce which reduces brick-and-mortar customers. However, it should be noted that in seeking to assess how effective Macy’s strategies are in efforts to defend the company against threats, and enable it to exploit the available opportunities, there would be need to establish the ratings. Thus in as far as opportunities are concerned, it is clear that Macy’s may need to adapt its strategies in as far as responding to expansion opportunities is concerned. This is more so the case in relation to international expansion. This is the key opportunity with the lowest rating. One strategy the company could consider is pursuing strategic partnerships with multinationals having strong presence in regions it deems promising. To minimize the impact of key threats as well as protect itself from the said threats, Macy’s may also need to adapt the strategies it presently deploys in relation to apparel manufacturers seeking to offer products for sale directly to consumers. This is the crucial threat with the lowest rating. One strategy that Macy’s may find beneficial on this front is negotiating new contracts with up-and-coming apparel manufacturers.

When it comes to CPM, this happens to be a key tool in efforts to compare an enterprise to its competitors, in an attempt to identify not only its relative weaknesses, but also its relative strengths (Amason, 2011). In the case of Macy’s, therefore, we could gain crucial insights from the CPM about this particular company’s weak as well as strong points relative to those of its rivals in the industry. The critical success factors have in this case been identified. These are the factors that Macy’s must excel in if it wishes to remain relevant in the market. The factors of greatest relevance on this front are customer loyalty, product quality, price competitiveness, customer service, and employee dedication. These have a score of 0.10 and above. The rating for values in this case demonstrates how Macy’s and its two competitors (i.e. Dillard’s and Costco) are doing on each front. Thus, Macy’s is weakest in the realms of employee dedication and price competitiveness. These have the lowest rating. We also have the scores which would help us determine which of the three companies is relatively stronger. Macy’s and Costco have a tie in as far as the top score for employee dedication is concerned, whereas the top scorer in terms of price competitiveness happens to be Costco. Thus, Macy’s should deploy strategies to further enhance price competitiveness, i.e. by way of embracing low-cost strategy.