J.C. Penney: Fashioning a Retailing Nervous System for the Future SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of J.C. Penney: Fashioning a Retailing Nervous System for the Future
As J.C. Penney's new communications architecture is being put in place, the company's chief information officer must consider how best to position the company as a dominant electronic retailer. The company must exploit its electronic links with customers, suppliers, business partners, and its vast network of retail stores in order to achieve this objective.
Swot Analysis of "J.C. Penney: Fashioning a Retailing Nervous System for the Future" written by Sirkka Jarvenpaa, Blake Ives includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that J.c Electronic facing as an external strategic factors. Some of the topics covered in J.C. Penney: Fashioning a Retailing Nervous System for the Future case study are - Strategic Management Strategies, IT and Technology & Operations.
Some of the macro environment factors that can be used to understand the J.C. Penney: Fashioning a Retailing Nervous System for the Future casestudy better are - – cloud computing is disrupting traditional business models, there is backlash against globalization, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, geopolitical disruptions, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
central banks are concerned over increasing inflation, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of J.C. Penney: Fashioning a Retailing Nervous System for 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: Fashioning a Retailing Nervous System for 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 Electronic, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which J.c Electronic 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: Fashioning a Retailing Nervous System for the Future can be done for the following purposes –
1. Strategic planning using facts provided in J.C. Penney: Fashioning a Retailing Nervous System for the Future case study
2. Improving business portfolio management of J.c Electronic
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of J.c Electronic
Strengths J.C. Penney: Fashioning a Retailing Nervous System for the Future | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of J.c Electronic in J.C. Penney: Fashioning a Retailing Nervous System for the Future Harvard Business Review case study are -
Effective Research and Development (R&D)
– J.c Electronic 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: Fashioning a Retailing Nervous System for 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.
Operational resilience
– The operational resilience strategy in the J.C. Penney: Fashioning a Retailing Nervous System for 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.
Ability to lead change in Technology & Operations field
– J.c Electronic 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 Electronic in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– J.c Electronic 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 Sirkka Jarvenpaa, Blake Ives 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 Electronic is one of the leading recruiters in the industry. Managers in the J.C. Penney: Fashioning a Retailing Nervous System for 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.
Highly skilled collaborators
– J.c Electronic 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: Fashioning a Retailing Nervous System for the Future HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Technology & Operations industry
– J.C. Penney: Fashioning a Retailing Nervous System for the Future firm has clearly differentiated products in the market place. This has enabled J.c Electronic to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped J.c Electronic to invest into research and development (R&D) and innovation.
Innovation driven organization
– J.c Electronic is one of the most innovative firm in sector. Manager in J.C. Penney: Fashioning a Retailing Nervous System for the Future Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- J.c Electronic 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 Electronic is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in J.C. Penney: Fashioning a Retailing Nervous System for the Future Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– J.c Electronic has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled J.c Electronic to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the J.c Electronic 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For J.c Electronic digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. J.c Electronic 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.
Weaknesses J.C. Penney: Fashioning a Retailing Nervous System for the Future | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of J.C. Penney: Fashioning a Retailing Nervous System for the Future are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study J.C. Penney: Fashioning a Retailing Nervous System for the Future, in the dynamic environment J.c Electronic has struggled to respond to the nimble upstart competition. J.c Electronic has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, J.c Electronic 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.
Low market penetration in new markets
– Outside its home market of J.c Electronic, firm in the HBR case study J.C. Penney: Fashioning a Retailing Nervous System for the Future needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, J.c Electronic 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study J.C. Penney: Fashioning a Retailing Nervous System for the Future, is just above the industry average. J.c Electronic 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the J.C. Penney: Fashioning a Retailing Nervous System for 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 Electronic has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As J.C. Penney: Fashioning a Retailing Nervous System for the Future HBR case study mentions - J.c Electronic 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.
Capital Spending Reduction
– Even during the low interest decade, J.c Electronic 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.
No frontier risks strategy
– After analyzing the HBR case study J.C. Penney: Fashioning a Retailing Nervous System for the Future, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Skills based hiring
– The stress on hiring functional specialists at J.c Electronic 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 J.C. Penney: Fashioning a Retailing Nervous System for 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 Electronic 's lucrative customers.
Opportunities J.C. Penney: Fashioning a Retailing Nervous System for 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: Fashioning a Retailing Nervous System for the Future are -
Manufacturing automation
– J.c Electronic can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for J.c Electronic in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of J.c Electronic has opened avenues for new revenue streams for the organization in the industry. This can help J.c Electronic to build a more holistic ecosystem as suggested in the J.C. Penney: Fashioning a Retailing Nervous System for the Future case study. J.c Electronic can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, J.c Electronic 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: Fashioning a Retailing Nervous System for 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.
Leveraging digital technologies
– J.c Electronic 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.
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 Electronic in the consumer business. Now J.c Electronic can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for J.c Electronic 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 Electronic to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– J.c Electronic can develop new processes and procedures in Technology & Operations 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, J.c Electronic is facing challenges because of the dominance of functional experts in the organization. J.C. Penney: Fashioning a Retailing Nervous System for 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. J.c Electronic can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– J.c Electronic can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. J.C. Penney: Fashioning a Retailing Nervous System for the Future 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.
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 Electronic can use these opportunities to build new business models that can help the communities that J.c Electronic operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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 Electronic 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: Fashioning a Retailing Nervous System for 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: Fashioning a Retailing Nervous System for the Future are -
Technology acceleration in Forth Industrial Revolution
– J.c Electronic has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, J.c Electronic needs to keep up with the evolution of technology in the Technology & Operations 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.
Increasing wage structure of J.c Electronic
– 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 Electronic.
Regulatory challenges
– J.c Electronic 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 Technology & Operations 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: Fashioning a Retailing Nervous System for the Future, J.c Electronic may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for J.c Electronic in the Technology & Operations industry. The Technology & Operations 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. J.c Electronic needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that J.c Electronic is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. J.c Electronic can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Electronic business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on J.c Electronic 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.
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 Electronic.
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: Fashioning a Retailing Nervous System for 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: Fashioning a Retailing Nervous System for 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: Fashioning a Retailing Nervous System for 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: Fashioning a Retailing Nervous System for 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: Fashioning a Retailing Nervous System for 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 Electronic needs to make to build a sustainable competitive advantage.