Question

Macy’s is one of the highest performing U.S. retail stores, but in recent years the company has begun to look outside the U.S. to generate more sales. It has been able to do that through international shipping via the company’s retail website. But, last year it announced it will open a four-level, 205,000 square-foot store overseas – in Abu Dhabi – in 2018. Long a holdout on international retail business, the $28 billion Macy’s clearly sees that overseas expansion is the way to go with domestic retail sales slowing.

Question: Macy’s is aggressive in its overseas market expansion. Assess Abu Dhabi’s country attractiveness as a potential market (i.e., consider in terms of political, economic, an legal aspects and differences to home country)

Answer 1

Abu Dhabi has a number of attractive features that make it a potentially strong market for Macy's. Politically, the United Arab Emirates (UAE) is a stable and business-friendly country with a well-established legal system. This provides a good foundation for Macy's to enter the market and operate with confidence.

Economically, Abu Dhabi is a wealthy and rapidly-growing market with a high level of consumer spending. The UAE has a high GDP per capita, and Abu Dhabi is home to a significant number of affluent consumers who are interested in luxury brands like Macy's. Additionally, the UAE has a relatively open economy with low taxes and few trade barriers, which makes it an attractive market for foreign retailers.

However, there are also some challenges that come with expanding into Abu Dhabi. One of the biggest differences between the UAE and the United States is the legal system. The UAE is a civil law jurisdiction, which is very different from the common law system used in the United States. This can create some legal challenges for Macy's as it tries to navigate the local legal landscape.

Another challenge is the cultural differences between the UAE and the United States. The UAE is a Muslim country, and retailers need to be sensitive to local customs and traditions. Macy's will need to carefully consider how it markets its products and how it interacts with customers in order to avoid cultural misunderstandings.

Overall, while there are some challenges associated with expanding into Abu Dhabi, the country's strong economy, stable political environment, and growing consumer market make it an attractive opportunity for Macy's.