Strategic Leadership Plan JC Penney Harvard Case Solution & Analysis

Strategic Leadership Plan JC Penney Case Solution

Company overview

JC penny is a chain of US department stores based in Texas. It is one of the largest home furnishing and apparel retailers with the mission to provide customer ratification and exciting shopping experience. The company has the store base of around 1000 in the U.S, and Puerto Rico. The stores comprise of diversified range of private portfolios, exclusive and national brands.

JC penny is committed to strengthen the private label brands, generate more revenue per customer, and to be the world class Omni channel retailer. The company has also ensured its online presence to keep pace with the ongoing trends in fashion industry.

JC Penny was incorporated on 22nd Jan, 2002 and its official website is jcpenny. com. The online customers are served by the stores of the company or the warehouse of the company, and the product line of the company includes footwear, accessories, fine jewelry, in store customer pick up, and apparel. The current share price of the company is $9.81 and it went high at an all-time high $11.99 in past 52 weeks and the lowest at $6. Currently according to Reuters, 5 analysts are recommending to buy call its stock and 10 analysts are recommending hold call for this stock. Whereas, one analyst is recommending sell call it as soon as it is possible.

Challenges faced by the company

The company is facing significant challenges, below mentioned listing provides holistic view of the challenges faced by the company.

  • Lower sales per outlet
  • Decline in profitability
  • Competitive environment
  • Poor Human resources and Customer service
  • Lesser customer response
  • Inefficient supply chain
  • Billing and Database challenge

The company’s sales per outlet/store are decreasing due to the increase in competition and poor sales management strategies from the company. The number of stores increased more than 1000 stores, but it remained quite challenging for the company to manage the sales per retail store of the company. Moreover, fewstores of the company were not performing up to the standards.

The profitability of the company was still at risk because of ineffective cost control policies and higher operating/non-operating expenses. According to the annual report of last year, the net profit of the company was -513,000.  The return on equity of the company was -27.37% as compared to the industry’s 14.09%. In addition to this, the return on investment was also below the standards of industry. The ROI of the company was -5.61% as compared to the industry’s 12.32%.

There are many players in this segment/industry that are performing efficiently in the market. This is why there is intense competition in this sector from players such as Target Corporation, Macy’s, Dillard, Bon-Ton Stores, and Kohl’s corporation.

The human resource department of the company is going through layoff, which creates bad morale among the employees. The existing employees will be insecure due to future layoffs which might result in loss of their jobs. Moreover, customer services would not be up to the standards of industry, the representatives of incapable to handle customer queries, and suggestions.

In addition to the above challenges, the supply chain and database of the company is facing difficulties in effective strategies implementation. The company is facing issue regarding shipping to the customers, and the production function of the company is lacking in quality. Furthermore, the IT department of the company is facing greater challenges in terms of billing pattern and data duplication.

Financial Position of the company and its associated challenges

JC penny is facing significant issues in terms of share price fluctuations, liquidity position, and profitability position..............................

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