Assignment Details
Your task is to convince your Board that you have a credible plan that will not only improve the JCPenney organization’s performance over the next year, but position the company for significant long-term growth that will keep it ahead of the competition.
The Capstone Project requires that current, accurate, and objectively verifiable data be used. This includes financial data and any other information required for your analyses, recommendation, and implementation. Thus, it is recommended you choose a publicly-traded company or an organization for which audited financial statements are available. ( I choose JCPenney)
Finally, the Capstone Project requires that you identify an opportunity that is significant enough to warrant the discussion of a CEO and their Board of Directors that will lead the organization to a sustainable market leadership position.
ANSWER:
JC Penney has faced significant performance challenges since the early 2010s. Towards the end of 2019, it reported that comparable-store sales had declined by 9.3% while comparable store sales declined by 6.6% (Market Insider, 2019). The firm’s inventory had declined by 9% to US$2.93 billion in the third quarter of 2019 compared to the third quarter of 2018 (Market Insider, 2019). JC Penney’s same-store sales for the December 2019 holiday season declined by 7.5%. JC Penney’s competitors have also recorded a declining performance; Macy’s and Kohl’s same-store sales declined by 0.6% and 0.2% in 2019, respectively (Thomas, 2020). The organization’s same-store sales dropped by 7.4% in 2019. The firm’s share prices have been on a decline and currently stand at US$0.69 per share compared to US$8.4 in 2015 and US$4.8 in 2017 (Thomas, 2020). I will use the data to show JC Penney’s performance in the market over time, its changes in value, the performance of its competitors, and the market trends and operating environment. Through the data, I will convince the board of directors that change is needed so that JC Penney can regain its market leadership position.
The primary problem that has aggravated JC Penney’s financial and performance woes is its pricing strategy. When the previous Chief Executive Officer (CEO), Ron Johnson changed the traditional pricing system, the firm started posting poor results. However, revamping the fame and performance that characterized JC Penney in the early 2000s will require significant effort and dedication. According to McKinsey’s 8S model, a strategy is paramount in change (Gerth, 2013). JC Penney should, thus, change its current pricing strategy to one that is made on coupons and discounts. The pricing strategy will aim to continue reading …