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J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future


Rehired in April 2013, Myron E. "Mike" Ullman III was brought back to stabilize the retailer's business. Under Ron Johnson's "Fair and Square" program, sales had declined rapidly and quarterly losses and expensive capital investments had put severe pressure on cash reserves. Ullman decided to combine "Fair and Square" everyday low pricing and high/low pricing to reverse the negative trend. For example, to welcome people back to its stores, J.C. Penney ran deep discount sales for Mother's Day and Veteran's Day. By November 2013 the retail stores posted positive sales comparisons year over year, the first time since December 2011. However, margins remained low and Wall Street was wondering if J.C. Penney was sacrificing margin to drive store traffic. Would 2013 holiday sales be strong enough for J.C. Penney to begin building stronger margins? Would another strategy have been more effective? Did the board dispose of Johnson too quickly? Was it wise to bring back Ullman? Can J.C. Penney get back on its feet?

Authors :: Elie Ofek, Jill Avery, Jose B. Alvarez

Topics :: Sales & Marketing

Tags :: Business models, Change management, Customers, Decision making, Pricing, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future" written by Elie Ofek, Jill Avery, Jose B. Alvarez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that J.c Penney facing as an external strategic factors. Some of the topics covered in J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future case study are - Strategic Management Strategies, Business models, Change management, Customers, Decision making, Pricing and Sales & Marketing.


Some of the macro environment factors that can be used to understand the J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future casestudy better are - – there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , wage bills are increasing, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, etc



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Introduction to SWOT Analysis of J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the J.c Penney, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which J.c Penney operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.




SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix


SWOT analysis of J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future can be done for the following purposes –
1. Strategic planning using facts provided in J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future case study
2. Improving business portfolio management of J.c Penney
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of J.c Penney




Strengths J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of J.c Penney in J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future Harvard Business Review case study are -

Organizational Resilience of J.c Penney

– The covid-19 pandemic has put organizational resilience at the centre of everthing that J.c Penney does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Cross disciplinary teams

– Horizontal connected teams at the J.c Penney are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Strong track record of project management

– J.c Penney is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Learning organization

- J.c Penney is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at J.c Penney is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Effective Research and Development (R&D)

– J.c Penney has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Analytics focus

– J.c Penney is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Elie Ofek, Jill Avery, Jose B. Alvarez can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Ability to recruit top talent

– J.c Penney is one of the leading recruiters in the industry. Managers in the J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Training and development

– J.c Penney has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Sustainable margins compare to other players in Sales & Marketing industry

– J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future firm has clearly differentiated products in the market place. This has enabled J.c Penney to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped J.c Penney to invest into research and development (R&D) and innovation.

Operational resilience

– The operational resilience strategy in the J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

High brand equity

– J.c Penney has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled J.c Penney to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Innovation driven organization

– J.c Penney is one of the most innovative firm in sector. Manager in J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.






Weaknesses J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future are -

Increasing silos among functional specialists

– The organizational structure of J.c Penney is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. J.c Penney needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help J.c Penney to focus more on services rather than just following the product oriented approach.

Slow decision making process

– As mentioned earlier in the report, J.c Penney has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. J.c Penney even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

High cash cycle compare to competitors

J.c Penney has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Lack of clear differentiation of J.c Penney products

– To increase the profitability and margins on the products, J.c Penney needs to provide more differentiated products than what it is currently offering in the marketplace.

Need for greater diversity

– J.c Penney has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though J.c Penney has relatively successful track record of launching new products.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, J.c Penney is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

High operating costs

– Compare to the competitors, firm in the HBR case study J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract J.c Penney 's lucrative customers.

Skills based hiring

– The stress on hiring functional specialists at J.c Penney has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Low market penetration in new markets

– Outside its home market of J.c Penney, firm in the HBR case study J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Aligning sales with marketing

– It come across in the case study J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future can leverage the sales team experience to cultivate customer relationships as J.c Penney is planning to shift buying processes online.




Opportunities J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities highlighted in the Harvard Business Review case study J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future are -

Low interest rates

– Even though inflation is raising its head in most developed economies, J.c Penney can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for J.c Penney to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for J.c Penney to hire the very best people irrespective of their geographical location.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects J.c Penney can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, J.c Penney can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Learning at scale

– Online learning technologies has now opened space for J.c Penney to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. J.c Penney can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Redefining models of collaboration and team work

– As explained in the weaknesses section, J.c Penney is facing challenges because of the dominance of functional experts in the organization. J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Developing new processes and practices

– J.c Penney can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.

Better consumer reach

– The expansion of the 5G network will help J.c Penney to increase its market reach. J.c Penney will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Manufacturing automation

– J.c Penney can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Using analytics as competitive advantage

– J.c Penney has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future - to build a competitive advantage using analytics. The analytics driven competitive advantage can help J.c Penney to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. J.c Penney can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help J.c Penney to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.




Threats J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, J.c Penney can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future .

High level of anxiety and lack of motivation

– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. J.c Penney needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.

Regulatory challenges

– J.c Penney needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future, J.c Penney may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .

High dependence on third party suppliers

– J.c Penney high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Backlash against dominant players

– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of J.c Penney business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that J.c Penney is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Stagnating economy with rate increase

– J.c Penney can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.

Increasing wage structure of J.c Penney

– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of J.c Penney.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for J.c Penney in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of J.c Penney.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents J.c Penney with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.




Weighted SWOT Analysis of J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future Template, Example


Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of the case study J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of the Harvard case study J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that J.c Penney needs to make to build a sustainable competitive advantage.



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