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 - – supply chains are disrupted by pandemic , increasing household debt because of falling income levels, wage bills are increasing, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices,
increasing commodity prices, central banks are concerned over increasing inflation, 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.
Diverse revenue streams
– J.c Electronic is present in almost all the verticals within the industry. This has provided firm in J.C. Penney: Fashioning a Retailing Nervous System for the Future 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.
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.
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.
Strong track record of project management
– J.c Electronic is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Low bargaining power of suppliers
– Suppliers of J.c Electronic in the sector have low bargaining power. J.C. Penney: Fashioning a Retailing Nervous System for the Future has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps J.c Electronic to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that J.c Electronic 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.
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.
Successful track record of launching new products
– J.c Electronic has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. J.c Electronic 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.
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.
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.
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 -
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Sirkka Jarvenpaa, Blake Ives suggests that, J.c Electronic is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Aligning sales with marketing
– It come across in the case study J.C. Penney: Fashioning a Retailing Nervous System for the Future that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case J.C. Penney: Fashioning a Retailing Nervous System for the Future can leverage the sales team experience to cultivate customer relationships as J.c Electronic is planning to shift buying processes online.
Need for greater diversity
– J.c Electronic 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.
Increasing silos among functional specialists
– The organizational structure of J.c Electronic is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. J.c Electronic needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help J.c Electronic to focus more on services rather than just following the product oriented approach.
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.
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.
Products dominated business model
– Even though J.c Electronic 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 - J.C. Penney: Fashioning a Retailing Nervous System for the Future should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study J.C. Penney: Fashioning a Retailing Nervous System for the Future, it seems that the employees of J.c Electronic don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, J.c Electronic is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study J.C. Penney: Fashioning a Retailing Nervous System for the Future can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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 -
Low interest rates
– Even though inflation is raising its head in most developed economies, J.c Electronic 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.
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.
Loyalty marketing
– J.c Electronic 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.
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.
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.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. J.c Electronic 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. J.c Electronic 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.
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.
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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. J.c Electronic can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, J.c Electronic can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study J.C. Penney: Fashioning a Retailing Nervous System for the Future .
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 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 dependence on third party suppliers
– J.c Electronic 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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents J.c Electronic with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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 .
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.
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 J.c Electronic in the Technology & Operations sector and impact the bottomline of the organization.
Environmental challenges
– J.c Electronic 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 Electronic can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
