Assignment @ AUGUST 14th

Executive Summary

JC Penny is an acronym which stands for J.C. Penney Corporation Inc.; the company sells different products, which makes it able to reach a broader market. Over the last three years, the company's annual earnings have been decreasing, up to the first quarter of 2020. Examples of products sold include furniture's and jewellery, among others. The company's major competitors in the retail industry are Walmart and Amazon. The SWOT analysis of the company is paramount when it comes to making recommendations on how the company can be made better. The company's employees are approximated to be more than 95000. Major problems facing the organizations are Lack of innovation, presence of confusing pricing across all its stores, too much inventory in stores and delay in products delivery. The research focused on Lack of change as the significant issues facing the organization. The paper proposes solutions on how the problems can be addressed and valuable recommendations through which the issues can be addressed.

Situational Analysis

Brief Company History

Market Research and Financial Background Information

The company belongs to the retail industry. Unlike other companies in the industry, JC Penny deals with multiple products with different product lines. The company has several retail stores which store products that are distributed to customers with ease. For areas where the company lacks a significant amount of general merchandisers, it operates from its centralized applications. Financial reports from 10-K annual reports revealed that the yearly company returns have been decreasing since 2018 up to the first quarter of 2020. Macy's is the major competitors of JC Penny (Eades, Glazer & Eyal, 2017). Over recent years when JC Penny has been performing poorly, Macy's performance has been on the rise (LP, n.d). Its market share value has been increasing, and as at now, it has a higher market value compared to JC Penny.

SWOT analysis

Strengths

The company enjoys a more significant market share which is approximated to be 3.30%. This is relatively bigger when compared to the market share owned by its competitors. Ikea and Ross, for instance, have a market share of 2.3% and 3% respectively (LP, n.d). Although this is viewed as an advantage, it is not the same case when compared with Walmart, which enjoys a market share of 17%. The high market share of the company makes it easier for the firm to make profits and increase its total sales (Ferreira & Ferreira, 2018). This serves as the company's primary competitive advantage.

The shorter supply chain of the organization is more of an advantage and competitive advantage than it is. The structure of the company comprises of directors and departmental managers who are responsible for managing the daily tasks of the firm. The stores are also synced with online transactions, a move which ensures that clients can equally make their orders online and frequently transact (Ferreira & Ferreira, 2018). Such activities provide that unnecessary transactions are avoided.

Multiple product lines possessed by the company is an advantage. When the sale in specific products is down, it is boosted in selling other products. Besides, selling a diverse number of products helps in targeting a broader market and multiple approaches towards market segmentation.

Weaknesses

Although the company has control over the weaknesses, it is facing like the contrary, internal operations, addressing the issues is quite problematic. This is because of the reducing capacity of the company in terms of the net sales made. According to the report published by LP, net sales between 2018 and 2019 reduced the sales also went down in the first quarter of 2020. Sales in 2018 were$12,554, and those of 2019 was $11,664. The transactions recorded in the first quarter of 2020 were $10. 716.

Taking a long duration to clear the inventories can be problematic and barrier to the normal operations of the company. According to the company financial statement, it is evident that the company is spending a lot in keeping the inventory. Most of the stores are filled with products which are not impacting the organization in any way (Ferreira & Ferreira, 2018). The firm should find better strategies which can be put in place to ensure that the inventories under operations have been kept in the required manner. Increasing inventory turnover will positively impact the organization.

Threats

The major threats of JC Penny are external forces of business which are directly or indirectly impacting the normal operations of the company. Stiff competition from the rivals within the retail industry has made it difficult for the company to enjoy in the market. There exist several companies with more significant market shares compared to JC penny. This makes it difficult for the organization to compete with such firms. "Walmart Company has a market share of 17.6%, Bed Bath and Beyond 14.7%, Target Inc. 9.3%, Amazon 4.7%, kohl's Corp 4.6%, and Marshalls 4.2%. For the competitors to have a larger market share than the company, it's a threat which requires the company to come up with market penetration strategy to ensure that it expands its market share so that it can become competitive in the market to avoid collapsing due to high competition rate" (Ferreira & Ferreira, 2018).

Existence of different business cultures impacts the organization negatively. Being an international company in various states across the globe, culture varies in terms of the customers in place and the attitude which people have towards the products which the company is selling. There also exist different regulations in different countries which govern operations of foreign countries. Some are too strict that the company might find it challenging to make a profit.

Opportunities

Globalization of the market offers firms opportunities through which they can expand and increase in its market share. Market expansion is attained because of the expanded customer base and foundation. Taking issues of globalization seriously will support the development of the business. This will be in line with the needs of customers in their geographic locations.

Increased utilization of online transactions is an advantage, which if utilized well, can increase the market reach. The company owns a well-established website which is known to so many customers. Online market expansion is attained with reduced costs, making the organization tasks more profitable. Lastly, the presence of multiple stores across the globe makes it easier to manage the organization because products can be delivered to customers more efficiently.

Problem Analysis & Description

Critical Issues

My Focus Problem

The focus problem to be addressed in this research paper is Lack or inadequate innovation. Despite having catchy advertisements and low product costs, most organizations, including JC Penny, tend to forget that business in the current era requires surplus activities. These surplus activities entail innovation so that the company will remain in line with what is happening across the globe. Making the products enjoyable or even closer to consumers cannot secure the customers. Eve minimizing the price of products is not helpful. Companies need to come up with new ideas which will break-through the customer's mind and satisfy them in multiple weighs. For instance, Netflix and Amazon did, it and they are now relevant in this technological era, and the company's annual net incomes are on the rise. The primary rationale as to why most business globally, JC Penny Company, in particular, is vanishing is because they are getting out-worked by their competitors each time. If JC Penney fails to take the issue of innovation seriously, then chances are there that the company will fail as Nokia and Kodak did. Nokia and Kodak were unable to realize that people or customers no longer go for brand names. Instead, they go for innovation and satisfaction.

Causes of the Problem

The process of innovation is not always smooth as many people might be thinking or perceiving it. Innovation in organizations requires the presence of a specific environment which is proactive in addressing the emerging issues. For the organization success, innovation is vital. With the ever-changing technology and dynamic nature of the organization, Lack of innovation in companies will imply that the companies are failing. The following are some of the cause of this problem in JC Penney company.

First are the absence of innovation strategies in the organization. Constant innovation in organizations enables organizations to remain proactive in all activities executed. Missing innovation strategies in organizations imply that there is no move that an organization can take to clinch innovation to cope up with or outshine its competitors. The second cause of the problem is poor motivation amongst employees. Several managers tend to believe that change is more of a hindrance than an advantage to the organization. The same issue might apply to JC Penney's managers. Such managers tend to sideline employees, neglecting them when it comes to making critical decisions. Employees work best when given freedom of taking any form of risks while trying to test new ideas. When employees feel empowered and motivated, they go the extra mile to find out more about motivation and ways through which new ideas can be incorporated into the organization.

The third cause is poor collaboration among parties making up the organization. Internal and external cooperation in companies is paramount towards its success. There exist different types of collaborations which exist on the organization—for instance, industry partners, customer partners and competitor partnerships. Utilizing the three ensures that innovation in the company has been addressed. The definitive cause of the problem is the Lack of customer connections. Customer empathy is a must for every organization which is concerned with customers. Companies should fight hard to find ways on how customers need can be addressed. Customer feedback needs to be traced in all dimensions to ensure that their satisfaction has been attained.

Indicator of Ultimate Problem

There exist several symptoms indicating that indeed JC Penney is suffering from innovation challenges. The first indicator is a reduction in the overall market share of the organization as compared to its competitors, particularly those who have incorporated emerging technologies in their operations. The second indicator is the closure of some of its stores because of poor management and high losses recorded. Another sign is increasing competition from companies which initially were far behind JC Penney. The third indicator is the inability of the company to compete wholly in the industry and showing any signs of improvement from the ever-worsening situation.

Solution, Evaluation & Recommendations

Solutions to the Problem

The following are four solutions through which Lack of innovation in JC Penney can be addressed. The first solution is taking the lean path. Most of the organization are embracing new technology for its operations when addressing various activities. Generally, this approach builds on a lean approach because organization tend to focus on producing products which directly impacts the customers. This approach can help the organization work handy with other stakeholders and achieve early prototypes which will positively validate some assumptions made. The method also allows the organization to trace how funds are spent. The ultimate advantage of the course is ensuring that innovation is maintained within the organization.

The second solution is welcoming failure and finding ways of addressing them. Discovering solutions which don't work is the best way of finding out the strategies which work. Running trials which eventually fails should not be regarded as a waste of time and resources. This is because they help the organization identify critical issues and possible ways through which they can be addressed. Several business companies tend to pull out of the innovative actions when faced with minor challenges. Pulling out might make organizations lose innovation advantages.

The third solution is retaining flexibility. Most innovative companies are those who expect the unexpected. Creating a potential scope ensures that the organization wins regardless of the number of directions taken. Sudden changes in the business world can positively or negatively impact the organization (Revilla & Saenz, 2017). Possession of a flexible approach towards how the issues in companies are addressed can enhance innovation. This would eventually maximize on emerging marketing conditions. The company can be in a position of reaching heights that have never been met before.

Evaluations and Recommendations

Examining critically the challenges the company is facing, the following recommendations can be put in place to address the problems. The first recommendation in the area is adopting innovation strategies. JC Penny company should have a team of specialists who will be concerned in finding new ways through which the company can remain relevant in the industry and will be devising measures that serve to impact the organization positively.

The second recommendation is drafting measures that empower and motivate company employees. Managers should be educated and made to understand that motivation is an organizational advantage. Allowing employees to innovate will grant them the freedom to what they are supposed to be doing. This empowering will also give them the necessary freedom they require to try something new, or try implementing an idea they have been following all through.

The third recommendation is supporting collaboration between the parties making up the organization. For instance, partners, customers and stakeholders should come together and formulate solutions through which all these can be addressed. The collaboration will find ways through which innovation in the organization can be achieved. The last recommendation is building firm customer connections. Client success has an important role when it comes to innovation success. Customers are capable of telling the kind of services they require and what needs to be done for their satisfaction to be attained.

Implementation & Success Metrics

Ways on How Solutions can be Implemented

In light of implementing the solutions mentioned above, the following four steps will be followed. 1) Preparing the infrastructure. Like many other solutions, this will also be achieved in a distinct and separate environment from which the resolutions were established. This requires consideration of the company environment so that it can not result to back clashes anymore. A proper evaluation will be essential (Revilla & Saenz, 2017). 2) Fully coordinating with the organization. This will give better ways through which communication with relevant parties will be attained. 3) Installing a production solution. The solution must be moved from development to implementation phase. Projects involving significant changes in the organization requires careful implementation because it might alter overall operations. 4) Implementing the proposals and monitoring their performance (Revilla & Saenz, 2017). After the implementation of the solution, there is a need to follow through them and record how they are impacting the organization.

Measures to be Taken

Measures to be taken while implementing the solutions include but not limited to: Avoiding common pitfalls. Since the goals of implementing the solutions are succeeding, then there is a need to avoid pitfalls as much as possible. Some of the common pitfalls to be avoided include lack of proper communication, avoiding meaningless plans and dealing with overwhelming projects. The second measure is ensuring that all bases have been entirely covered before commencing the implementation process. This will ensure that possible barriers have been prevented. The third measure is ensuring that the company enjoys full support. The key components required in the implementation. These include people, available resources and key stakeholders. The last measure is finding out the plan of attack (Revilla & Saenz, 2017). Once a solution has been implemented, the policy of aggression needs to be drafted. This will help address emerging issues.

References