Assignment @ AUGUST 14th

Executive Summary

This paper evaluates JC Penny in light of the problems that it experienced in 2019. Company and problem analyses are presented. A possible solution to the problem is also proposed.

Introduction

JC Penny is an international retail chain company based in the USA. Currently, the chain runs about eight hundred and fifty stores. The stores retail a range of products, including furniture, beauty products, jewelry, electronics, and other household products. The company's main competitors include Amazon, Target, and Walmart (Garrity, 2020).

Company Analysis

JC Penny sells typical household merchandise in its eight hundred and fifty locations spread all over the United States. The company specializes in fine jewelry and salon products to establish a competitive edge over its competitors (Garrity, 2020). In recent years, JC Penny has been performing poorly compared to competitors like Amazon, Target, and Walmart. The company has been reluctant to leverage e-commerce services.

Situation Analysis

a. Customer Analysis

i. Customer Profile

JC Penny's target customer is the in-mall enthusiast who is happy to buy merchandise in physical stores rather than in e-commerce platforms. Therefore, the company targets the typical mall going customer who is pleased to retrieve goods and services from a store and leave with them.

ii. Product and Product Distribution

JC Penny sells typical household merchandise in its stores. However, the stores also stock fine jewelry and salon products to stay ahead of the competition. The company buys products directly from manufacturers. The products are then distributed in the stores from where they are purchased by customers who are the final users (Garrity, 2020).

b. Analysis of Competitive Advantage

JC Penny's primary competitive strategy is the sale of fine jewelry and salon products. The company’s main competitors include Amazon, Target, and Walmart. Amazon has positioned itself as a leader in the e-commerce sector. Since customers are becoming more inclined to shop online, Amazon is the global leader in retail business (Garrity, 2020). Walmart is a leading hypermarket chain company renowned for the grocery sales that give it its competitive advantage. Target Corporation's competitive advantage is based on its loyal customer base. Therefore the company invests in customer satisfaction. JC Penny’s business structure is similar to Target Corporation and Walmart’s.

c. Environmental Analysis

i. PESTLE Analysis

In 2019, the political environment was favorable for JC Penny. No law or regulation with significant adverse effects against the company was passed. Concerning economic factors, unemployment rates were low, meaning that most Americans had enough income to buy products (Revilla & Saenz, 2018).

A significant social trend that had a substantial effect on JC Penny is increased online shopping. The trend of online shopping took root in America, where more Americans opted to buy their products over the internet over such platforms as Amazon or E-Bay rather than visit a typical brick-and-mortar store. Also, technological advances in the area of e-commerce lead to a significant shift from conventional in-mall shopping to online shopping. There were also no legal factors that had any impacts on JC Penny. As well, there were also no environmental factors that had a remarkable effect on JC Penny's business.

ii. SWOT Analysis

Problem Analysis and Description

Fishbone Diagram

Closure of Five Stores

Disregard of the competition

Closure of five Stores

Poor Marketing Strategies

The company is filing for bankruptcy

Derailed innovation – slow adaptation to technology

Increased Competition

Reduction of the Company’s Market share

Closure of several stores

Rise of E-commerce