J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old
In his August 2012 earnings call, CEO Ron Johnson urged investors to be patient and stay the course with the revised JC Penney marketing strategy despite mounting negative financial indicators. The heart of the strategy was the "Fair and Square" approach to pricing. This was a switch from J.C. Penney's previous high-low pricing program to a new everyday low pricing policy that aimed to fit with a radical repositioning of the JC Penney business model and brand. However, with sales continuing to decline the Board fired Johnson in April 2013 and appointed Johnson's predecessor Myron E. "Mike" Ullman III as his successor. What would Ullman do to stop JC Penney's losses? Would he push forward with Johnson's "Fair and Square" vision; would he return to the former strategy; could he manage a hybrid strategy; or would he define a new path for the retailer to follow?
Swot Analysis of "J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old" 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 Jc Penney's facing as an external strategic factors. Some of the topics covered in J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old case study are - Strategic Management Strategies, 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 (B): Out with the New, In with the Old casestudy better are - – supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels,
central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old
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 (B): Out with the New, In with the Old case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jc Penney's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jc Penney's 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 (B): Out with the New, In with the Old can be done for the following purposes –
1. Strategic planning using facts provided in J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old case study
2. Improving business portfolio management of Jc Penney's
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 Jc Penney's
Strengths J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jc Penney's in J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old Harvard Business Review case study are -
Ability to lead change in Sales & Marketing field
– Jc Penney's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Jc Penney's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Jc Penney's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Jc Penney's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Jc Penney's 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 Jc Penney's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Sales & Marketing industry
– J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old firm has clearly differentiated products in the market place. This has enabled Jc Penney's to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Jc Penney's to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Jc Penney's is one of the leading recruiters in the industry. Managers in the J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Jc Penney's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Jc Penney's 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 (B): Out with the New, In with the Old - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Jc Penney's is present in almost all the verticals within the industry. This has provided firm in J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Superior customer experience
– The customer experience strategy of Jc Penney's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Jc Penney's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Jc Penney's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Innovation driven organization
– Jc Penney's is one of the most innovative firm in sector. Manager in J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old 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.
Weaknesses J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old | 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 (B): Out with the New, In with the Old are -
High cash cycle compare to competitors
Jc Penney's 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.
Low market penetration in new markets
– Outside its home market of Jc Penney's, firm in the HBR case study J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old HBR case study mentions - Jc Penney's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Jc Penney's supply chain. Even after few cautionary changes mentioned in the HBR case study - J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Jc Penney's vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jc Penney's 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 (B): Out with the New, In with the Old can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Jc Penney's 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.
No frontier risks strategy
– After analyzing the HBR case study J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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 (B): Out with the New, In with the Old 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 Jc Penney's has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Jc Penney's 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.
Aligning sales with marketing
– It come across in the case study J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old 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 (B): Out with the New, In with the Old can leverage the sales team experience to cultivate customer relationships as Jc Penney's is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Jc Penney's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old | 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 (B): Out with the New, In with the Old are -
Loyalty marketing
– Jc Penney's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Creating value in data economy
– The success of analytics program of Jc Penney's has opened avenues for new revenue streams for the organization in the industry. This can help Jc Penney's to build a more holistic ecosystem as suggested in the J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old case study. Jc Penney's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Jc Penney's can use these opportunities to build new business models that can help the communities that Jc Penney's operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Building a culture of innovation
– managers at Jc Penney's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jc Penney's 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 (B): Out with the New, In with the Old, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Jc Penney's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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. Jc Penney's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Jc Penney's 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.
Learning at scale
– Online learning technologies has now opened space for Jc Penney's 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.
Using analytics as competitive advantage
– Jc Penney's 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 (B): Out with the New, In with the Old - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jc Penney's 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. Jc Penney's 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 Jc Penney's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Jc Penney's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Threats J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old 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 (B): Out with the New, In with the Old are -
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 Jc Penney's business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Jc Penney's is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Jc Penney's 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Jc Penney's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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. Jc Penney's needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Jc Penney's 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Jc Penney's 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.
Technology acceleration in Forth Industrial Revolution
– Jc Penney's has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Jc Penney's needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Jc Penney's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Regulatory challenges
– Jc Penney's 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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Jc Penney's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Jc Penney's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Jc Penney's can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old 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 (B): Out with the New, In with the Old 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 (B): Out with the New, In with the Old 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 (B): Out with the New, In with the Old 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 (B): Out with the New, In with the Old 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 Jc Penney's needs to make to build a sustainable competitive advantage.