JCPenney: Back in Business SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of JCPenney: Back in Business
In 2016, JCPenney was in the midst of a multi-year turnaround after coming dangerously close to bankruptcy. Under CEO Marvin Ellison, the company had identified three strategic objectives-a focus on omnichannel, private label goods, and increasing revenue per customer-to guide all company initiatives. The company was running pilot tests on a new line of appliances, rebranded hair salons, and new private label merchandise, and management now needed to decide how best to roll out and market these initiatives across the chain. Ellison also considered how to build upon the company's new ad campaign, Get Your Penney's Worth, and how to strike the right balance between serving its "core" and "emerging" customer segments. He wondered if these objectives and initiatives were enough to restore JCPenney's position in the evolving retail landscape.
Authors :: Elie Ofek, K. Shelette Stewart, Christine Snively
Swot Analysis of "JCPenney: Back in Business" written by Elie Ofek, K. Shelette Stewart, Christine Snively includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Jcpenney Ellison facing as an external strategic factors. Some of the topics covered in JCPenney: Back in Business case study are - Strategic Management Strategies, Competition, Crisis management, Human resource management and Sales & Marketing.
Some of the macro environment factors that can be used to understand the JCPenney: Back in Business casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , increasing transportation and logistics costs, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing household debt because of falling income levels,
challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of JCPenney: Back in Business
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in JCPenney: Back in Business case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jcpenney Ellison, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jcpenney Ellison 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 JCPenney: Back in Business can be done for the following purposes –
1. Strategic planning using facts provided in JCPenney: Back in Business case study
2. Improving business portfolio management of Jcpenney Ellison
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 Jcpenney Ellison
Strengths JCPenney: Back in Business | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jcpenney Ellison in JCPenney: Back in Business Harvard Business Review case study are -
Diverse revenue streams
– Jcpenney Ellison is present in almost all the verticals within the industry. This has provided firm in JCPenney: Back in Business 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.
Analytics focus
– Jcpenney Ellison 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, K. Shelette Stewart, Christine Snively 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.
Learning organization
- Jcpenney Ellison 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 Jcpenney Ellison is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in JCPenney: Back in Business Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Jcpenney Ellison digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Jcpenney Ellison 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.
Strong track record of project management
– Jcpenney Ellison is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Jcpenney Ellison has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jcpenney Ellison 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.
Sustainable margins compare to other players in Sales & Marketing industry
– JCPenney: Back in Business firm has clearly differentiated products in the market place. This has enabled Jcpenney Ellison to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Jcpenney Ellison to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Jcpenney Ellison 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.
Operational resilience
– The operational resilience strategy in the JCPenney: Back in Business 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.
Training and development
– Jcpenney Ellison has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in JCPenney: Back in Business 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.
Ability to recruit top talent
– Jcpenney Ellison is one of the leading recruiters in the industry. Managers in the JCPenney: Back in Business are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Jcpenney Ellison in the sector have low bargaining power. JCPenney: Back in Business has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jcpenney Ellison to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses JCPenney: Back in Business | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of JCPenney: Back in Business are -
Aligning sales with marketing
– It come across in the case study JCPenney: Back in Business 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 JCPenney: Back in Business can leverage the sales team experience to cultivate customer relationships as Jcpenney Ellison is planning to shift buying processes online.
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 Jcpenney Ellison supply chain. Even after few cautionary changes mentioned in the HBR case study - JCPenney: Back in Business, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Jcpenney Ellison vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Jcpenney Ellison 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.
High operating costs
– Compare to the competitors, firm in the HBR case study JCPenney: Back in Business 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 Jcpenney Ellison 's lucrative customers.
Products dominated business model
– Even though Jcpenney Ellison has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - JCPenney: Back in Business should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Jcpenney Ellison 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.
Slow to strategic competitive environment developments
– As JCPenney: Back in Business HBR case study mentions - Jcpenney Ellison 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.
Interest costs
– Compare to the competition, Jcpenney Ellison has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Increasing silos among functional specialists
– The organizational structure of Jcpenney Ellison is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Jcpenney Ellison needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jcpenney Ellison to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jcpenney Ellison is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study JCPenney: Back in Business can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study JCPenney: Back in Business, is just above the industry average. Jcpenney Ellison needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities JCPenney: Back in Business | 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 JCPenney: Back in Business are -
Better consumer reach
– The expansion of the 5G network will help Jcpenney Ellison to increase its market reach. Jcpenney Ellison 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Jcpenney Ellison is facing challenges because of the dominance of functional experts in the organization. JCPenney: Back in Business 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
– Jcpenney Ellison 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.
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. Jcpenney Ellison can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Jcpenney Ellison 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.
Learning at scale
– Online learning technologies has now opened space for Jcpenney Ellison 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.
Creating value in data economy
– The success of analytics program of Jcpenney Ellison has opened avenues for new revenue streams for the organization in the industry. This can help Jcpenney Ellison to build a more holistic ecosystem as suggested in the JCPenney: Back in Business case study. Jcpenney Ellison can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Jcpenney Ellison can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Jcpenney Ellison can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jcpenney Ellison 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, JCPenney: Back in Business, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Jcpenney Ellison 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Jcpenney Ellison 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 Jcpenney Ellison to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Jcpenney Ellison 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.
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 Jcpenney Ellison 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 JCPenney: Back in Business External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study JCPenney: Back in Business are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Jcpenney Ellison 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.
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. Jcpenney Ellison needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Jcpenney Ellison in the Sales & Marketing sector and impact the bottomline 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. Jcpenney Ellison 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.
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
– Jcpenney Ellison 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Jcpenney Ellison with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Jcpenney Ellison 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. Jcpenney Ellison 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 JCPenney: Back in Business, Jcpenney Ellison 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 .
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. Jcpenney Ellison 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
– Jcpenney Ellison 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.
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 Jcpenney Ellison business can come under increasing regulations regarding data privacy, data security, etc.
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 Jcpenney Ellison.
Weighted SWOT Analysis of JCPenney: Back in Business 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 JCPenney: Back in Business 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 JCPenney: Back in Business 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 JCPenney: Back in Business 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 JCPenney: Back in Business 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 Jcpenney Ellison needs to make to build a sustainable competitive advantage.