Have you been tasked to write an paper on PESTEL analysis of Macy’s? This sample paper will focus on the Political, Economic, Socioeconomic, Technological, Environmental, and Legal factors affecting the operations of Macy’s business.
Macy’s is a retail chain headquartered in the United States. It currently operates under Macy’s and Bloomingdale in more than 45 states across the country. Macy’s specializes in a wide range of products including jewelry, clothing, footwear, and household items among other related products. It has its stocks on the New York Stock Exchange with the symbol M. It has a current market capitalisation of over $13 billion, making it the second in the market after Kohl’s Corporation, which has over $16 billion market capital holdings. This PESTEL analysis of Macy’s gives political, economical, socio-cultural, technological, environmental and legal factors, which affect the performance of the company.
The political environment affects the operations of Macy in America and beyond. Under, its political action committee, Macy’s PAC, the company participates in various political contributions. Through the committee and individuals, Macy’s donated about $50,000 in the year 2010 to national and state level parties. This is according to the Open Secrets Org.
The prevailing economic conditions play a major role in determining the success of any business entity. For Macy’s, this is an important element in its external environment because almost all its functions are within America’s domestic market. Like many other companies in America, Macy feels the pinch of economic turbulence, which increases the opportunity cost of business operations and segments. A PESTEL analysis of Macy’s, shows that this economic environment largely contributes to high unemployment rates in the organization. The shrinking US markets further affect business operations of Travelers Companies Inc.
Despite these, Macy’s is on track with outstanding performance in the local market. For example, according to Macy’s Financial Report, 2010, the company earned $25 billion, with an operating income of more than $1 billion, accounting for about a five percent increase from the previous fiscal year. However, if the market conditions worsen, this may have negative effects on the profitability of the organization.
In partnership with charitable organizations, Macy embraces social corporate responsibility. For example, it makes donations every year, which go directly into bettering the lives within its surrounding communities. In 2010, Macy’s spent over $60 million through the Macy’s Foundation on various community-based initiatives. The company also gives gifts in areas of art, women’s issues, education, and HIV/AIDS among others.
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This PESTEL analysis of Macy’s, shows that technological advancements play a major role in determining the success of the organization. In recent years, Macy’s has implemented latest information technology systems to allow the flow of information internally and within its business divisions..
To maximize business across its borders, Macy’s plans to expand its e-commerce platform and improve its online presence to maximize its influence. The company is currently working on Omnichannel strategy, which will give its buyers a new and better buying experience through the internet. The company also embraces mobile technology in making its e-commerce sites more effective for customers worldwide.
According to Marcy’s social responsibility report, the company is committed to giving its customers a better experience whenever they shop at its stores. Macy’s believes is adhering to good, healthy and safe business practices, which safeguard its business and the natural environment within which it operates. Thus, it focuses on meeting customer expectations without harming the environment.
To achieve environmental friendliness, Macy’s has cut down its use of paper, limiting its use and encouraging recycling of waste products to curb environmental pollution and enhance efficiency. It also seeks to increase its uptake of renewable energy from 3% to 5% and adopt the use of sustainable raw materials to conduct its business.
From this PESTEL analysis of Macy’s, the legal environment equally affects the performance of Macy’s in the market. This emanates from state, federal and local laws and regulations, which govern businesses. Macy’s has been involved in law battles before for misleading its customers on jewelry. It has also been sued for its unsafe and hazardous clothing that caught fire and caused burns to users. All these legal proceedings negatively affect the company’s business.
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