J._C._Penney's_Implementation,_Strategic_Controls,_and_Contingency_Plans

J. C. Penney's Implementation, Strategic Controls, and Contingency Plans Annette Neblett University of Phoenix Strategic Planning and Implementation STR/581 Joseph Oslakovic August 01, 2013 J. C. Penney's Implementation, Strategic Controls, and Contingency Plans J.C. Penney’s has been around for many years, it is a favorite household name. Through the years it has gone through many changes. As the economy continues to change JCP has decided to implement new strategies, strategic controls, and contingency plans. Because of the changes JCP has transformed itself from a value retailer to a streamlined, customer-driven retailer to set itself apart from its biggest competitors, Macy’s and Kohl’s. The focus of JCP was on storewide promotions and customer satisfaction. JCP began to retool the image of the store to reflect special savings and a new set of prices. Annette will look at the merchandising strategies of the company, both past, and present methods will be examined. JCP will also take steps to improve the way the returns of merchandising are offered. An internal and external examination will be conducted along with a consumer trends analysis. JCP is open to any suggestions for product strategy improvements that will include high fashion brands, and the current trends. They will acquire the acquisitions of limited partners pertaining to the new brands. The company will collaborate with Sephora cosmetics and Sony electronics during key shopping dates that will benefit the present infrastructure of JCP. Implementation plan Objectives – As part of achieving the strategy of becoming the preferred choice for a retail career, we have established two key initiatives: Retaining, attracting and developing the best people in retail; and Building a WINNING TOGETHER culture by offering a meaningful, challenging and exciting place to work. Another objective of the company is to put the company back on the right path to achieve a profitable growth. JCP has taken the necessary critical steps to stabilize the business by improving the balance sheet and ensuring that the senior leadership is in place. The company is focused on executing and developing market strategies that will reconnect the company with the customers and improve sales while continuing to operate with a strong financial discipline. Functional tactics—JCP will identify the short-term objectives, empower the people within the company by communicating these policies, they will initiate the specific functional tactics and create a rewards system that will benefit everyone. Because functional tactics are the short-term activities in the company, JCP will implement the grand strategy with each functional area within the company. JCP’s functional tactics will provide the employees with certain guidelines and rules to follow. Each department will have and operate by these specific guidelines, and the departments will work together to achieve the company’s goals. These functional strategies will be implemented into the organizational strategy. By integrating the various activities is another focus of JCP’s functional strategies. The managers will ensure each department focuses on completing overall goals and objectives of the business to ensure this is the in the best way possible. Advertising, production, inventory, and the supply chain are functions that have been included in the functional tactics, which the company will benefit. Individual managers will work with other departments to ensure each department works to improve business operations. Action items JCP will focus one are sales, consumer relations, and marketing. Because of the fluctuation of JCP sales, the company will have specific plans in place to achieve the highest sales possible. They will have a timeline for every step of the process, they will delegate the responsibility wisely and set a time for the consumer research team and marketing time to decide to add new products or improve on the products that the already have. They will decide on how to reach the target market by advertising. JCP believes that it knows its consumers needs and wants, therefore they will focus on which will be the best products for the customers. They will conduct customer satisfaction surveys, and incentive buyer programs, this will give the customer the opportunity to give feedback to the company. A marketing action that JCP will implement is a rewards program for their first time buyers so that they can promote the products so that it will appeal to the new customer as well as the existing customers. “In celebration JCP’s commitment to the afterschool cause, which has reached more than $100 million in support since 1999, J. C. Penney Company, Inc. has launched an engaging Facebook campaign that invites JC Penney customers and fans to care, share and win. The company decided which organizations would receive the next $1 million in scholarships and grants provided by its signature charity, JC Penney Afterschool” ("JCP," 2013, p. 1). Milestones and Deadline JCP reached its $100 million milestone that significantly showed the opportunities the afterschool program made possible in every community over the past 10 years. To celebrate this occasion they company recognized the afterschool partners and the community. Their contributions helped to inspire children to be strong, smart, and socially responsible. It also made it possible for more children to participate in life-enriching programs that will benefit them in their future endeavors. As a result of this milestone JCP a total of $500,000 was awarded to four national afterschool organizations. The organizations that received the money were the Boys and Girls Club, the Y, National 4-H clubs and FIRST, which is an organization for inspiring and recognition of science and technology students. Critical Factors that were a Success for J. C. Penney The online apparel industry had four main critical factors for success. These factors included that the company focus was clear for the target customers; they understood the needs, nature, and concerns of the customers. They also understood the advantages and disadvantages of the company and incorporated a website, existing facilities, and policies that fit with the customers concerns, needs, and nature, it help leverage the companies advantages and minimized the disadvantages of the company. Tasks and Task Ownership • Reinvented Market • Signature Item • New Product Line • Reinvented exclusive line mid-pricing • Branding Reinvented Resource Allocations “As part of the new Growth Brands Division at J. C. Penney Company, Inc. (NYSE: JCP), today announced plans to launch a new retail concept catering to the men's big & tall customer. With plans to open 300 stores -- as well as an ecommerce website -- over the next five years, The Foundry Big & Tall Supply Co. will carry an extensive assortment of highly sought-after national men's brands along with The Foundry Supply Co. (TM) private brand merchandise, offering an upscale and one-stop-shop for the big & tall customer” (Dinwoodle & Coultas, 2010, p. 1-5). The resource allocations that JCP will use to ensure the success of the business is information gathered from the other department stores, the marketing team will ensure that each of the 1700 stores understand the objective and are willing to install the new men’s line the same in each store. The social media will ensure that the information concerning the new brand is publicized through all media avenues. The financial department will be given the assignment of creating a financial analysis and determine the break even analysis. A marketing team will be assembled to handle the forecasting and sales of the new product. Everyone from the executives to the sales associate will need to be involved to ensure the success of this new launch. Change Management Strategies JCP began its management strategy changes in February 2012. They changes included product, price, place, presentation, promotion, and personality. These changes will improve the quality of the products by restoring the integrity of the company and aligning it with the expectations of the customers. The prices will be set with what the customer wants, the company will offer lower prices several times per month, and The Company will present the product in a compelling way that will inspire the customer to shop throughout the store as well as the Internet, tablets, and Smartphone. JCP want to communicate the message to the customer who will unite the business with the customer, the company will also present to the customer the new brands shops, which are similar to the companies existing shops such as Mango and Sephora. Success Factors Here are seven factors that had led JCP to its success of today. They are • The customer will receive the value the company provides. • Gave the customer more value than expected. • How one treat the customer determines the company’s success. • Listen. • Books are good. Experience is even better. • Think and prepare one. • Improve. Therefore, JCP has focused their thought on the different demographics, people, shapes, and sizes of the world. They gathered information both internally and externally and have become a successful business. Budget J. C. Penney Company, Inc. (JCP) “14.28 0.30(2.06%) August EDT|After Hours: 14.28 0.00 (0.00%) Aug 2, 7:59PM EDT Cash Flow View: Annual Data | All numbers in thousands Period Ending Feb 2, 2013 Jan 28, 2012 Jan 29, 2011 Net Income (985,000) (152,000) 389,000 Operating Activities, Cash Flows Provided By or Used In Depreciation 543,000 518,000 511,000 Adjustments To Net Income (316,000) 313,000 (5,000) Changes In Accounts Receivables - - - Changes In Liabilities 178,000 (89,000) (141,000) Changes In Inventories 575,000 297,000 (189,000) Changes In Other Operating Activities (5,000) (67,000) 27,000 Total Cash Flow From Operating Activities (10,000) 820,000 592,000 Investing Activities, Cash Flows Provided By or Used In Capital Expenditures (810,000) (634,000) (499,000) Investments - 17,000 - Other Cash flows from Investing Activities 517,000 (253,000) 14,000 Total Cash Flows From Investing Activities (293,000) (870,000) (485,000) Financing Activities, Cash Flows Provided By or Used In Dividends Paid (86,000) (178,000) (189,000) Sale Purchase of Stock 71,000 (832,000) 8,000 Net Borrowings (250,000) - (301,000) Other Cash Flows from Financing Activities (17,000) (45,000) (2,000) Total Cash Flows From Financing Activities (274,000) (1,065,000) (496,000) Effect Of Exchange Rate Changes - - - Change In Cash and Cash Equivalents (577,000) (1,115,000) (389,000) (Goldstein, 2013, p. 1). (Rios, Tran, Shao, Hendrawidjaja, & Whitman, n.d., p. 46) Sales Forecast “The fourth-quarter forecast lowered J.C. Penney Co. for adjusted profit to 65 cents to 70 cents a share because of the softer sales within the first two months of the quarter. Earlier J.C. Penney had projected earnings of $1.05 to $1.15, but in the pre-marketing trading the shares fell 8.3%. This showed the estimated profit analysis of $1.08 a share for the quarter” (Butcho-Lino, 2012, p. 1). In conclusion, JCP started out as a small town store, which blossomed into a major industry. They have been through many transformations. Some of them were not beneficial to the company and almost caused the company to fail. Because of the quickness of the executives and management, they were put JCP back on track where the customer is FIRST. The company revisited the inception of the company and is building it concepts today on what James Cash Penney started over 100 years ago. References Butcho-Lino, S. (2012). J C Penney Cuts 4th Quarter Profit Forecast; Shares Decline. Retrieved from http://www.businessweek.com/news/2012-01-05/j-c-penney-cuts-4th-quarter-profit-Forecast-shares-decline.html Dinwoodle, A., & Coultas, K. (2010). J C Penney’s New Growth Brands Division to Launch Specialty Retail Concept Catering to Men’s Big and Tall Customers. Retrieved from http://ir.jcpenney.com/phoenix/zhtml'c-70528&p=irol-newsCompanyArticle&ID=1496350 Edberg, H. (2008). J C Penney’s Seven Keys to a Smashing Success. Retrieved from http://positivityblog.com/index.php/2008/03/28/jcpenney-seven-keys-to-a-smashing-success/ Goldstein, C. (2013, August 5,). Market Watch [Annual Financials for J. C. Penney Co. Inc]. The Wall Street Journal. Retrieved from http://www.marketwatch.com/investing/stock/JCP/financials/cashflow JC Penney Launched “Round-Up” Program Benefiting the J C Penney Afterschool Fund. (2013). Retrieved from http://ir.jcpenney.com/phoenix'c=70528&p=irol-newsCompanyArticle&ID1040751 Rios, A., Tran, C., Shao, E., Hendrawidjaja, J., & Whitman, S. (n.d.). J C P Retail Management Project. Retrieved from http://www.slideshare.net/jessicahdew/jc-penney-retail-management-project