Executive Summary
Venturing into the global market is usually a significant move for a company to make, and thus by doing so, it usually requires one to be prepared for any eventuality. The world of business is unpredictable, especially when entering a new market. Macy’s retail company understands well what is needed to venture into a new market. The company’s partnership with Al Tayer Group of Abu Dhabi strategical mode of entry. The paper seeks to assess Macy’s new store in the UAE in conjunction with the collaboration it has made with Al Tayer Group. In line with Macy’s company’s supply chain and operations, an analysis of infrastructure and operations will be carried out. A value stream map will be used to explain the company’s current state in Abu Dhabi and its prospects. How best to achieve the company’s prospects will also be discussed in terms of infrastructural and operational management.
Introduction
To many entrepreneurs, starting and expanding to global markets is usually their primary goal. Some entrepreneurs have been successful while others have not achieved the desired outcomes in the international markets. Entry into a new market is not an easy venture, it usually requires a firm to consider its business strategy, mode of entry, and market challenges. These three elements are essential in mitigating business risk (Singh et al., 2017). One company that recently decided to expand globally is Macy’s, founded by Hussey Macy Rowland in 1858. The firm grew from four retail dry goods stores to a multibillion company having warehouses across the United States, and now in the United Arab Emirates (UAE). The company’s continued success saw it open its doors in Abu Dhabi ad India (Coolidge, 2016). As its entry strategy, the company partnered with Al Tayer Group under a license agreement with Macy’s Inc. Al Tayer Group operates the new Abu Dhabi store to make it run in line with the acquiring company.
Company Analysis
Macy’s has already an established business that has been operational for over a century, and its vast expansion in different states in America confirms its capability to thrive in a new market (Macy’s Inc., 2020). Al Tayer Group, on the other hand, is also a multinational with vast dealings (Bloomberg, 2020). The company has close to 200 retail stores that are currently operating in the Middle East.
Infrastructure
Technology
Retail business has, in the recent past, advanced rapidly. Technology has revolutionized the retail industry by developing computer and mobile applications that save the customer’s energy to visiting a store. Macy’s has been quick to equip itself with recent developments in technology to help it stay afloat in the retail business as far as keeping its supply chain and operations moving is concerned. Macy’s has an e-commerce site and a mobile app that can be accessed by any customer at all times to view the company’s fashion, value, and high-quality products. In Abu Dhabi, technology is as robust as it is in the US, and there are no restrictions on the types of sites to view, as in the Arab countries. Consequently, Macy’s is poise to earn good returns through its online retail business in Abu Dhabi thanks to the store.
Transportation
As UAE’s capital city, Abu Dhabi boasts of several modern transport systems available across the city. The city has an airport and a port just a few kilometers away from the commercial business district (CBD). The city’s road network is vast and in good condition to facilitate smooth and comfortable transportation (Duncan & Tomic, 2016). The city’s rail system is currently under construction, and the first phase is already completed and operational. Transport in Abu Dhabi is superb and thus suitable for Macy’s on-time delivery of goods. Even though traffic may be an issue, the completed railroad project’s commissioning in 2021 will help solve the problem. Since that is the case, the existing transportation system is enough for the store to attend to the needs of a customer quickly.
Operations
Theory of Constraints
In business, the making of profit is usually the ultimate goal and for that profit to be made, being smart in doing business is essential. Measuring performance and evaluating how certain changes in the market will affect the business is mandatory for any successful business since it is the only way an individual will know whether they are making profits or loss (Ikeziri et al., 2019). Currently, Macy’s has dedicated many resources to its new store in Abu Dhabi to help with the store’s marketing, and it is good that the company has been picking up. It is a good indication when considering the mess that corona has done to businesses across the world.
Value Stream Map
Macy’s retail store in Abu Dhabi is a newly opened store that has been operational for close to a year. Even though the Al Tayer Group operates the store, the goods are supplied by Macy’s. Due to the growing online retail business, Macy’s operates the production control, whereby it sends goods to Abu Dhabi based on demand. Upon reaching Abu Dhabi, the goods are stamped and then assembled according to the date of order before they are shipped to various customers within Abu Dhabi or even on the city’s outskirts. The company receives a confirmatory message once the product has been delivered to customers, who are then asked to rank the service provided (Appendix 1). The changes in the proposed map will be the same as the current, the only change will be that production control will be done in Abu Dhabi and not in the US. (Appendix 2)
Recommendation
From an infrastructural perspective, Macy’s must invest much in technology as far as online retailing is concerned. The world is rapidly advancing technologically, and thus, it is essential that Macy’s, in partnership with Al Tayer Group, make sure that the business stays ahead technologically. With regard to transportation, traffic menace may be a hindrance to the timely delivery of goods to customers who shop online. As such, the company must adjust its times of delivery moments when there is the least traffic. It is good that the rail project is nearing completion, therefore, soon most of the deliveries will be done on time.
From an operational perspective, there is a need for the company to be critical in the way it spends its resources. Since Macy’s is new in Abu Dhabi, it is right that its products be sourced from the US, but that should end once the company gains the needed foothold in the market. Besides that, the company should not employ many employees. Employees should not exceed 4: a driver and his helper and two front desk operators. These measures are essential for the success of Macy’s in the UAE.
Conclusion
Abu Dhabi is a prospective market for many retail companies, and it is a worthy that Macy’s has identified it as key to conquering the Middle East market. Al Tayer Group has firm foothold in the Middle East region and thus this will help market Macy’s. Implementation of the recommendations will have an impact on the company as far as the success of the Abu Dhabi store is concerned.
References
Coolidge, A. (2016). Macy’s continues international expansion. Cincinnati.
Duncan, O., & Tomic, S. (2016). Abu Dhabi, UAE. In Architecture and Globalization in the Persian Gulf Region. Routledge.
Ikeziri, L. M., Souza, F. B. D., Gupta, M. C., & de Camargo Fiorini, P. (2019). Theory of constraints: review and bibliometric analysis. International Journal of Production Research, 57(15-16), 5068-5102.
Macy’s Inc. (2020). About Macy’s Inc. Macy’s Inc.
Singh, D., Singh, H., & Sandhu, N. (2017). New market entry strategies: Public and private sector banks in India. SCMS Journal of Indian Management, 14(1), 123-134.