Macy's, Inc.2018

As of March 2018, Macy's, Inc. operates 690 department stores in 45 states, Washington DC,

and outside the United States in Columbia, Guam, Puerto Rico, China, United Arab Emirates,

and Kuwait with third party license agreements. Headquartered in Cincinnati, Ohio, the company's

brands include Macy's, Bloomingdale's, Backstage, The Outlet, Last Act, and Bluemercury.

Most stores are located in urban or suburban areas and include a mix of apparel, accessories,

cosmetics, home furnishings, and various other consumer goods. Macy's reported revenues in

excess of $25 billion in year ending January 2017 deriving from 382 company-owned stores,with

the rest being leased.

Approximately 710 stores are department stores operating under the names Macy's and

Bloomingdale's, and the remainder are specialty stores that include Bloomindale's The Outlet,

Bluemercury, Macy's Backstage, and Last Act. Macy's divested 66 stores in year ending January

2017 and 43 year end January 2016, with plans to continue reducing total store numbers by about

30 as leases expire.

Macy's employs 148,300 full-time and part-time employees with 10 percent represented by

unions. Closing more and more stores every year, Macy's is struggling financially and needs a

clear strategic plan. During the month of December 2017, Macy's spent $32 million on television

advertising, compared to J.C. Penney, who spent $27 million that month.

Copyright by Fred David Books LLC; written by Forest R. David.

History

Macy's was founded by Rowland Hussey Macy 150 years ago. He chose the red star logo based

on a tattoo on his forearm which was inspired by the North Star Polaris that often guided him as

a sailor. After several failed attempts in retail, R. H. Macy started Macy's in 1858 as a dry goods

store in New York City with first-day sales grossing $11.06, but first-full-year sales of $85,000.

Macy was a pioneer in many facets of business, promoting the first woman to an executive position

in retail and the first to charge all customers the same price for an item. That original Macy's

store at 1.1 million square feet has been at the same location since 1902 and has been the same

size since 1924.

Macy's went public in 1922 and began expanding across the United States shortly after. The

firm is famously known for its Thanksgiving Day Parade, which began as a Christmas Parade in

1920 by immigrant workers thankful for their new American nationality. In 1929, Macy's was

acquired by Federated Department Stores and remained in operation under that name until 2007

when Federated changed its corporate name to Macy's, Inc. The company's revenues and profits

have declined every year since 2015.

Vision/Mission

Macy's provides a quite lengthy vision statement on their website, but no mission statement. At

the corporate website, simply click on About Us then click on Corporate Vision. Unhappy with

the vision and lack of mission, someone once proposed a mission statement for Macy's as follows:

At Macy's, we aspire to provide our worldwide shoppers an experience that gives them the

confidence to be the best version of themselves. Whether utilizing the unsurpassed expertise

of our employees in store, or shopping on-line, we want to provide our customers with

open and honest communication while they shop for clothing and accessories that makes

them life-long members of our family.

358 STRATEGIC-MANAGEMENT CASE ANALYSIS

Internal Issues

Organizational Structure

Exhibit 1 provides Macy's organizational structure. Currently, 7 of the top 19 executives are

female. Mr. Macy would likely take great pride in this; he hired the first women executives in

U.S. retail history in the 1920s.

1. Jeff Gennette, President, CEO, Director

2. Douglas Sesler, EVP, Real Estate

3. Naveen Krishna, Chief Technology Officer

4. Cheryl Heinonen, EVP, Corporate Communications

5. Justin MacFarlane, Chief Strategy, Analytics and Innovation Officer

6. Elisa D. Garcia, Chief Legal Officer

7. Rachel Shechtman, Brand Experience Officer, Founder of STORY

8. Jill Ramsey, Chief Product and Digital Revenue Officer

9. Paula Price, Chief Financial Officer

10. Jeffrey A. Kantor, Chief Merchandising Officer

1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

11. Richard A. Lennox, Chief Marketing Officer

12. Karen Hoguet, Strategic Advisor

13. Robert Harrison, Chief Operations Officer (COO)

14. Danielle Kirgan, Chief Human Resources Officer

15. Tony Spring, Chairman and CEO Bloomingdale's

16. Maria Beck, CEO, Co-Founder of Bluemercury, Inc.

17. Hal Lawson, President of Macy's

18. John Harper, Chief Stores Officer

19. Barry Beck, Chief Operating Officer, Co-Founder of Bluemercury, Inc.

EXHIBIT 1 Macy's Top Executives and Organizational Chart

Source: Based on company documents.

Sustainability

Macy's is committed to sustainability and has detailed commentary on its website on various

sustainable measures it has taken such as the firm adding 1.8 million LED lights through its

properties, saving 26 million kilowatt-hours of power. Macy's was ranked in 2016 as the fourth

largest American enterprise for installed solar capacity; the company sells most of the solar

power it generates to others. Macy's has been a member of the Dow Jones Sustainability Index

since 2005.

Current Strategies

Macy's fiscal 2017 revenues and profits were down 4.8 and 42.9 percent, respectively, and

the company closed about 7 percent of its stores. The corporation blames shifts in consumer

shopping habits and has designed several new strategies moving forward, but most

center around what Macy's, Inc. refers to as the North Star Strategy, with the name being

an acknowledgement to their founder. There are five key points to the North Star Strategy,

and while all are vague as reported on the Annual Report, they are worth mentioning (paraphrased):

1) Increased marketing research to improve Macy's loyalty programs and pricing

strategies, 2) Increased focus on private label brands only found at Macy's stores as well

as catering increasingly to Macy's Backstage and Last Act customers, 3) Further developing

of the mobile app and focus on better trained sales associates in what Macy refers to

as Omnichannel, simply meaning customers can shop in more ways than traditional stores,

4) Increased focus on cost reduction, reinvestment, and extra care in the real estate decisions,

5) Exploring unmet customer needs and exploring acquisitions through increased marketing

research.

Macy's is adding Macy's Backstage stores in existing Macy's stores. The firm's Last Act

program is aimed to move clearance merchandise at Macy's stores more effectively. The company

is using a retrenchment strategy by recently closing 100 Macy's stores, with plans to close

another 30 stores by year end 2018. Macy's, Inc. is adding Bloomingdale's and Bluemercury

stores as well as adding Bluemercury boutiques inside existing Macy's stores. The company currently

has about 20 Bluemercury locations inside Macy's stores.

CASE 1 MACY'S, INC.2018 359

Macy's has a partnership with Brookfield Asset Management to help determine effective

ways of increasing value in Macy's, Inc.'s real estate investments. Through January 2019, Brookfield

is formulating strategies for each of Macy's Inc.'s real estate assets.

Macy's continues to expand its Macy's Backstage stores, which are around 30,000 square

feet each and offer discounted products, after first opening six such stores in New York in

2015. Current focus is on adding Backstage stores inside existing Macy's stores as a means

of attracting cost conscious customers into Macy's stores. The company desires to expand

further into China and currently has a joint venture with Fung Retailing Limited holding a

35 percent stake and Macy's holding the remaining 65 percent ownership stake in Macy's

China Limited. All business to date is through ecommerce on Alibaba Group's Tmall Global

website.

Suppliers

Macy's purchases its products from many different suppliers with no single supplier accounting

for more than 5 percent of the firm's net purchases and no formal long-term commitments with

any of the suppliers. Macy's considers its relationships with suppliers to be good. The majority of

Macy's products are produced outside the United States, primarily from Asia.

Private Label Brands

Macy's has numerous private labels brands that include American Rag, Aqua, Charter Club,

Epic Threads, first impressions, Greg Norman for Tasso Elba, Hudson Park, John Ashford,

Martha Steward Collection, Morgan Taylor, and many more. Several of the private label

brands are licensed to Macy's, Inc. through third party trademarks that extend decades into

the future.

Finance

Macy's continues to struggle financially as indicated by declining revenues in Exhibit 2,

and all the red downward pointing arrows in the balance sheets provided in Exhibit 3. Even

as its finances worsened, the firm repurchased nearly 8 million shares of stock in 2016 and

increased its dividend to $1.51 per share, possibly as a measure to keep shareholders from

selling the stock. This marked the sixth dividend increase in the last 5 years. From 2015 to

the end of 2017, Macy's stock dropped 75 percent in value from over $70 to $18 per share,

yet dividend payouts in 2017 resulted in a reduction of retained earnings; the firm paid out

approximately $850 million in dividends to only $611 million in net income in 2017.

EXHIBIT 2 Macy's, Inc.'s Income Statements (in millions)

Income Statement 1/28/17 2/3/18 Percent Change

Revenues $25,778 $24,837 -3.65%

Cost of Goods Sold 15,621 15,152 -3.00%

Gross Profit 10,157 9,685 -4.65%

Operating Expenses 8,842 7,857 -11.14%

EBIT 1,315 1,828 39.01%

Interest Expense 363 321 -11.57%

EBT 952 1,507 58.30%

Tax 341 (29) -108.50%

Non-Recurring Events 8 11 37.50%

Net Income 619 1,547 149.92%

Source: Based on company documents.

360 STRATEGIC-MANAGEMENT CASE ANALYSIS

EXHIBIT 3 Macy's, Inc.'s Balance Sheets (in millions)

Balance Sheet 1/28/17 2/3/18 Percent change

Assets

Cash and Short Term Investments $1,297 $1,455 12%

Accounts Receivable 522 363 -30%

Inventory 5,399 5,178 -4%

Other Current Assets 408 448 10%

Total Current Assets 7,626 7,444 -2%

Property Plant & Equipment 7,017 6,672 -5%

Goodwill 3,897 3,897 0%

Intangibles 498 488 -2%

Other Long-Term Assets 813 880 8%

Total Assets 19,851 19,381 -2%

Liabilities

Accounts Payable 5,338 5,053 -5%

Other Current Liabilities 309 22 -93%

Total Current Liabilities 5,647 5,075 -10%

Long-Term Debt 6,562 5,861 -11%

Other Long-Term Liabilities 3,319 2,772 -16%

Total Liabilities 15,528 13,708 -12%

Equity

Common Stock 3 2 -33%

Retained Earnings 6,088 7,174 18%

Treasury Stock (1,489) (1,456) -2%

Paid in Capital & Other (279) (48) 83%

Total Equity 4,323 5,673 31%

Total Liabilities and Equity 19,851 19,381 -2%

Source: Based on company documents.

Segment Data

Exhibit 4 reveals that Macy's is fairly well positioned across the United States, but in reality the

firm is primarily focused on the east and west coasts. Like many department stores and retailers,

women account for the bulk of the business and Macy's, Inc. is no exception with over 60 percent

of revenues derived from products exclusively for women. Department stores generally do not

cater to men much.

Exhibit 5 gives the number of Macy's, Inc. stores by brand. Note the steady decline in the

flagship Macy's department stores. Exhibit 6 gives a percentage breakdown of Macy's, Inc. sales

by product category; note that women products comprise 61 percent of total sales.

As of January 2018, Macy's, Inc. had 852 stores with nearly 400 owned and the others,

leased. Among the 852 stores, 258 were located in the Northeast USA, while 188 were

located in the South, 144 in the North Central, and 131 in both the Northwest and Southwest.

Exhibit 5 reveals that the majority of stores are of Macy's brand with Bluemercury store

numbers accounting for the second most, followed by Bloomingdale's. Bluemercury stores

are significantly smaller than Bloomindales in square feet. The firm does not report revenues

nor profits across segments, but it can be inferred from company actions that Bluemercury is

more efficient at least in generating profits as the firm is expanding this segment while closing

CASE 1 MACY'S, INC.2018 361

Macy's Inc. Stores

Southwest

Northwest

Northeast

North Central

0 50 100 150 200 250

South

EXHIBIT 4 The Number of Macy's Inc. Stores Across the United States

Source: Based on company documents.

Women's Accessories,

Intimate Apparel, Shoes,

Cosmetics and Fragrances

23%

16%

Women's Apparel

Men's and Children's

23% Home/Miscellaneous

38%

EXHIBIT 6 Macy's, Inc.'s Percent of Sales by Division (as of February 2017)

Source: Based on company documents.

EXHIBIT 5 The Total Number of Macy's, Inc. Stores

Business January 2018 January 2017 January 2016 January 2015

Macy's 660 673 737 773

Bloomingdale's 55 55 54 50

Bluemercury 137 101 77 0

Source: Based on company documents.

underperforming Macy's branded stores. Bluemercury is an upscale spa focusing on offering spa

services as well as haircuts, makeup, and other beauty products. Ulta Beauty is a much larger

competitor with a similar profile and target customer as Bluemercury. Macy's, Inc. hopes customers

utilizing Bluemercury will shop in Macy's department stores as they make their way for

spa services at Bluemercury.

Competitors

Competition in the department store business is extremely competitive with many options for

customers ranging from online to traditional stores. Stores specialize in home goods, apparel,

general merchandise, and many other areas from discount stores to higher end stores. Even

stores like Walmart and Target have entire sections devoted to department store offerings including

clothing, home goods, jewelry, and more. Customers have never had as many choices

as before. The entire department store industry is valued at over $150 billion with profits in

362 STRATEGIC-MANAGEMENT CASE ANALYSIS

excess of $4 billion. However annual growth has declined around 5 percent a year for the last

several years and is expected to continue to decline around 3 percent annually through 2023.

Such numbers for example would place department stores in the bottom half of a BCG Matrix

either as cash cows or dogs depending on their relative position to the top revenue-generating

firm in the industry.

Online department stores offering similar products simply do not incur the overhead cost

of traditional stores like Macy's that incur really high rent, tax, utilities, and labor expenses

in areas such as New York City. Moving forward in the industry, it is vital for stores such as

Macy's to differentiate themselves from rivals and online optionsprobably by providing superior

in-store service. To date, Macy's strategy (at least publicly stated on the Annual Report)

is providing omnichannel offerings and superior service. This type of vague strategy will likely

not be good enough to compete with online providers offering similar quality products to

Macy's, Inc.

Being forced to enter pricing wars with online providers is a huge threat facing all brick

and mortar providers, and one they are likely unable to win. Simply offering online products

themselves is a viable strategy although it is likely unwise to undercut in-store prices; customers

can simply shop in the store and then order online. This phenomenon is called show rooming. All

specialty stores that sell similar products as department stores, such as shoe stores and athletic

apparel stores, can be considered rivals to Macy's, Inc. A financial comparison with two rival

companies is provided in Exhibit 7.

J. C. Penney Company (JCP)

Headquartered in Plano, Texas, JCP operates 1,013 retail locations in the United States and Puerto

Rico and had revenues of $4.5 billion in year ending January 2017. The firm has struggled in

recent years switching its strategy and product offerings back and forth at times, often confusing

the customer. Around 2012, JCP hired a new CEO and removed the coupons customers expected

using "One Fair Price" strategy and removed commissions for sales people. Three CEOs later,

these programs are back in effect and operating income is positive after 3 years of negative

numbers. JCP continues to cut its workforce though, particularly at the corporate level. About 45

percent of JCP brands are private label brands that provide higher margins than national brands

the store sells, such as Levis.

JCP has 106,000 full-time employees and operates 875 stores as of November 2017.

Founded in 1902, JCP is not doing well today. At the close of 2017, JCP's Better Business Bureau

(BBB) rating was 1.08 out of 5 stars based on 47 customer reviews and a BBB Rating of F. The

company's ConsumerAffairs.com rating is 1 out of 5 stars based on 259 reviews submitted in the

past year. Most of the low ratings are attributed to poor customer service.

Nordstrom, Inc. (JWN)

Headquartered in Seattle, Washington, Nordstrom was founded in 1901 as a shoe store in

Seattle. Nordstrom caters to upper and middle class consumers who enjoy purchasing luxury

items. Nordstrom typically focuses on goods that are one level below a true luxury good of say,

Louis Vuitton, offering customers excellent quality and notoriety with a better price. Nordstrom's

inventory includes clothing, accessories, handbags, jewelry, cosmetics, and fragrances as well

EXHIBIT 7 A Financial Comparison of Macy's, Inc. with Two Rival Companies

Macy's, Inc. J. C. Penney Company Nordstrom

$ Market Capitalization 7.5B 1.1B 8.0B

# Employees 148K 106K 78K

$ Revenue 25.8B 4.5B 14.7B

% Gross Margin 39.1% 35.6% 35.8%

$ Net Income 619M 1.0B 354M

EPS Ratio 2.28 -0.57 2.87

P/E Ratio 10.80 16.77

Source: Based on a variety of sources.

CASE 1 MACY'S, INC.2018 363

as wedding and home furnishings departments. Nordstrom operates in the US, Puerto Rico, and

Canada.

The firm operates over 120 department stores and 226 off-price with Nordstrom Rack stores

employing 78,000. The firm is currently testing smaller stores with an increased focus on luxury

goods that focus on customers who are less price conscious as a means of differentiating itself in

the market, or at least as a means of focusing on a more profitable customer segment. The first

Nordstrom Rack store in Canada opened in 2018 in Toronto.

Target Corporation (TGT)

Headquartered in Minneapolis, Minnesota, Target is the second-largest general merchandise

retailer in the United States, behind Walmart. Target is similar to Walmart, but with higher

quality products, according to its patrons. Target operates over 1,834 stores across the United

States and employs over 320,000; the firm reported revenues in year ending January 2017 of

$69.5 billion.

Target recently launched a series of national, local and charitable initiatives that mark the

retailer's largest-ever push into team sports. Target is an official partner of Major League Soccer

(MLS) and has a multi-year deal that includes airtime during MLS broadcasts on Univision, FOX

Sports and ESPN, opportunities for in-stadium experiences, player appearances, and ownership

of certain major MLS platform. Target also has a $14 million commitment to local youth soccer

through two new national initiativesan $8 million local soccer grant program, and a $6 million

partnership with the U.S. Soccer Foundation to build 100 new soccer play spaces by 2020.

Online

Consumers are increasingly shopping online for clothing through auctions and online-only

stores. Traditional retailers such as Nordstrom have virtually all responded with their own online

websites, yet often at the same high prices found in their stores. Brick-and-mortar stores still hold

the distinct advantage of customers being able to hold, feel, and try on items before purchasing,

as well as talk to knowledgeable salespeople at higher quality stores.

According to some analysts, the 15 most popular "online only" clothing stores that compete

with Macy's, Inc. by offering clothing, mainly for women, are listed below:

1. Boohooa UK-based company; dresses start at $6; free shipping on orders over 60

2. Cotton Onan Australian retailer; dresses start at $10; free shipping on orders of over $55+

3. One Loved Babean online boutique for women; dresses start at $20; free shipping

4. Yes Stylea Hong Kong-based store; dresses start at $3.95, free shipping on orders over $35

5. Amazon.comPrime members get free shipping and returns

6. Missguideda UK-based firm; dresses start at $6; shipping free is $5 on all orders

7. ASOSvery fast and reliable; dresses start at $12.50; free shipping on orders over $40

8. Adore Mespecializes in lingerie in straight and plus sizes; free shipping

9. Saved by the DressMiami-based; dresses start at $25; free shipping on orders over $60

10. Dog Dogdresses start at $17.95; free shipping on all orders

11. Lulu'sdresses start at $14; free shipping on orders over $50

12. Dress Upboutiques; dresses start at $16; free shipping on orders over $50

13. Thred Upa resale store carrying all brands like new; free shipping on orders over $79

14. Blame Bettyoffers vintage or retro clothing; dresses start at $27.60; shipping costs vary

15. 6pmcarries many brands such as Columbia, Under Armour, Prana; for men and women

External Issues

Economic Conditions

Department stores are heavily dependent on the state of the economy and customers' disposable

income. The economic outlook for the United States is excellent through 2020. Customers are

increasingly purchasing online and this means of purchasing is expected to exceed 10 percent

annually through 2023. Despite lower profit margins, department stores are expected to increase

marketing efforts to attract customers into the stores.

Many customers of Macy's are increasingly shopping online for the price range of products

Macy's provides. Department stores have unknowingly "trained customers to wait for sales or

364 STRATEGIC-MANAGEMENT CASE ANALYSIS

look for deals as consumers are increasingly price conscious." Firms are offering deals in lowtraffic

times and even offering unannounced deals on select items.

Expenses

Although not likely to lead to a competitive advantage, controlling costs remains a significant

concern for department stores moving forward simply to avoid going bankrupt. Purchases account

for over 50 percent of industry revenue alone and Macy's cost of goods sold is about 60

percent. Firms should explore joint ventures or strategic alliances with providers to help reduce

costs, if at all possible. Backward integration is an option as well, but most department stores

simply offer too many different products to make this a viable strategy. Labor continues to be a

relatively high expense totaling around 14 percent of revenues, but most workers are hourly and

not paid significantly. On January 1, 2018, however, 18 states increased their minimum wages

rates, even though the federal minimum wage rate remains unchanged.

Firms must decide moving forward if they wish to increase their labor to provide customers

increased customer service with experienced knowledgeable sales people in each section of the

store. Rent and utilities maybe surprisingly account for around 8 percent of revenues, but the

price is still significant when attempting to compete with online providers who have considerably

lower bills in this category. Marketing, contrary to what many believe is a relatively low expense,

accounts for only 1 percent of revenues. However, this number may increase as firms look to

increase their marketing efforts to help attract customers to the store.

Future

Like many department stores, Macy's is struggling to compete with online shopping and more

niche retail stores that focus tremendously on customer service or a small subset of high-end

customers. Because of this, Macy's is moving their popular Bluemercury stores inside Macy's

department stores to attract new customers, the company's promotions and other tactics hope to

draw new customers into the stores.

As Macy's sales have declined in recent years, management has shifted attention to monetizing

some of the company's highly valuable real estate, knowing that real estate sales often lead

to significant one-time gains on an income statement. Macy's may be the biggest beneficiary in

the retail sector from the new, lower U.S. corporate tax law because with the sale of high-dollar

properties, Macy's can pay down debt, continue paying its really high dividend (currently one of

the highest dividend yields as of mid-2018) and possibly in late 2018 or 2019 start buying back

stock again. In 2016-2017, the company was focused on paying down debt rather than trying to

buy back stock. Macy's has actually started to sell excess real estate, and some of the properties

are in valuable locations.

Some Macy's stores, while profitable, are not making enough money to pay for the opportunity

cost of what the real estate would be worth if it were to be sold. For example, Macy's has

numerous downtown stores in really hot real estate markets like New York, San Francisco, and

Chicago. Every time Macy's sells one of these "50-year-old" stores however, it has to pay a pretty

big tax bill because of that asset sale gain. But with lower corporate taxes, there is more incentive

to sell. To manage this selling of real estate, Macy's has formed a strategic partnership with

Brookfield Asset Management, a private equity and real estate management firm that's looking

into several dozen Macy's store sites and ways to either redevelop the store or do additional real

estate development on, for example, the parking lots or similar ideas of that nature.

Macy's wants to monetize the upper floors of its humongous stores, partly because the company's

real estate is worth more than the entire company's valuation right now. Being able to sell

off some of that real estate can bring in needed cash, pay down debt, pay dividends to shareholders,

and be transformative for Macy's viability.

Fiscal 2018-2019

In early 2019, Macy's closed its Redmond Town Center main store in Redmond, Washington,

bringing the total to 83 of the approximately 100 store closures announced in August 2016. Over

the last three fiscal years, Macy's, Inc. has completed transactions totaling approximately $1.3

billion in cash proceeds. Heading into fiscal 2018, Macy's, Inc. continues to evaluate its real

estate portfolio to identify opportunities where the redevelopment value of its real estate exceeds

CASE 1 MACY'S, INC.2018 365

that of non-strategic operating locations. For example, in February 2018, Macy's signed an agreement

to sell floors 8 through 14 of its State Street store in Chicago to a private real estate fund

sponsored by Brookfield Asset Management. Brookfield intends to convert these largely unused

floors into dynamic, creative office space. As part of this transaction, Macy's, Inc. will receive

a total of $30 million ($27 million of consideration and a $3 million contribution for certain

improvements), as well as upside participation in the ultimate value creation associated with the

conversion of the upper floors to office space. This transaction will enable the company to make

Macy's on State Street a more vibrant shopping destination. The company anticipates closing this

transaction in the first half of fiscal 2018.

Macy's, Inc. expects to open two additional Bloomingdale's stores in San Jose, California,

and Norwalk, Connecticut, in fiscal 2019. Both Macy's off-price brand of stores, Macy's Backstage,

and its clearance strategy, Last Act, are growing. As of February 3, 2018, the company has

a total of 52 Macy's Backstage locations (7 freestanding and 45 inside Macy's stores). Additionally,

Macy's Inc. is growing its luxury beauty products and spa retailer, Bluemercury, by opening

additional freestanding Bluemercury stores and adding Bluemercury products and boutiques to

Macy's stores. As of February 3, 2018, Macy's, Inc. operated 157 Bluemercury locations (137

freestanding and 20 inside Macy's stores).

Moving forward, Macy's, Inc. needs a detailed strategic plan; they must decide what position

they wish to take in the industry. Currently, offering moderately priced items in the traditional

department store format has not been effective relative to discount department stores, specialty

stores, or pure online shopping.