J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version 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 (Abridged), Spanish Version
As he gets ready to release 2nd quarter 2012 results, Ron Johnson, the new CEO of department store J.C. Penney, is reconsidering the dramatic changes he initiated for the business model and brand image of his company. A new pricing scheme he put in place in February, dubbed "Fair and square", was a central component of the new strategy. The scheme initially had three pricing tiers and eliminated typical sales promotions in an attempt to simplify the shopping experience for consumers; thus moving J.C. Penney off its previous high-low pricing practice. Other components of the new strategy included a new store layout, the inclusion of several well-known brands, and having special lines designed by well-known designers. However, troubling first quarter results that continued into the summer months seemed to indicate that J.C. Penney shoppers, accustomed to receiving JCP Cash coupons and circulars advertising the week's specials, were slow to embrace the new pricing format and began leaving the retailer in droves. Under enormous pressure to turn things around as the all-important back-to-school and holiday shopping seasons were imminent, Johnson decided to make adjustments to the initial pricing scheme that were set to go into effect August 1st. Were these changes enough to turn things around? Should Johnson stay the course on the other elements of his repositioning efforts? Is Johnson's experience in setting up Apple stores helping or hurting him as he tries to achieve his goal of making J.C. Penney "America's favorite store?" (This is an abridged version of the original case, "J.C. Penney's "Fair and Square" Pricing Strategy", 513-036.)
Swot Analysis of "J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version" written by Elie Ofek, Jill Avery 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 (Abridged), Spanish Version case study are - Strategic Management Strategies, Business models, Change management, Collaboration, Customers, Decision making, Entrepreneurship, Financial analysis, Leading teams, Pricing, Strategy execution and Sales & Marketing.
Some of the macro environment factors that can be used to understand the J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version casestudy better are - – there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, wage bills are increasing, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy,
central banks are concerned over increasing inflation, technology disruption, etc
Introduction to SWOT Analysis of J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version
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 (Abridged), Spanish Version 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 (Abridged), Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version 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 (Abridged), Spanish Version | 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 (Abridged), Spanish Version Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version 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.
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.
Ability to lead change in Sales & Marketing field
– J.c Penney 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 J.c Penney in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– J.c Penney has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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 (Abridged), Spanish Version 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.
Successful track record of launching new products
– J.c Penney has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. J.c Penney has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Low bargaining power of suppliers
– Suppliers of J.c Penney in the sector have low bargaining power. J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps J.c Penney to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version 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.
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 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For J.c Penney digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. J.c Penney 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.
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 (Abridged), Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version | 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 (Abridged), Spanish Version are -
Workers concerns about automation
– As automation is fast increasing in the segment, J.c Penney 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.
Capital Spending Reduction
– Even during the low interest decade, J.c Penney has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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.
Slow to strategic competitive environment developments
– As J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version HBR case study mentions - J.c Penney 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 star products
– The top 2 products and services of the firm as mentioned in the J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version 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.
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 (Abridged), Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version, 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 operating costs
– Compare to the competitors, firm in the HBR case study J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version 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.
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.
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 (Abridged), Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version | 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 (Abridged), Spanish Version are -
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for J.c Penney 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.
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 (Abridged), Spanish Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for J.c Penney in the consumer business. Now J.c Penney can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, J.c Penney can use these opportunities to build new business models that can help the communities that J.c Penney operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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.
Leveraging digital technologies
– J.c Penney can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
Buying journey improvements
– J.c Penney can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version 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.
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.
Creating value in data economy
– The success of analytics program of J.c Penney has opened avenues for new revenue streams for the organization in the industry. This can help J.c Penney to build a more holistic ecosystem as suggested in the J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version case study. J.c Penney can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version 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 (Abridged), Spanish Version are -
Technology acceleration in Forth Industrial Revolution
– J.c Penney has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, J.c Penney 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.
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. J.c Penney can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
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.
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. J.c Penney 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.
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.
Environmental challenges
– J.c Penney 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. J.c Penney can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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 (Abridged), Spanish Version, 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 .
Weighted SWOT Analysis of J.C. Penney's "Fair and Square" Strategy (Abridged), Spanish Version 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 (Abridged), Spanish Version 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 (Abridged), Spanish Version 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 (Abridged), Spanish Version 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 (Abridged), Spanish Version 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.