Business policy case study
Executive Summary
The case summarizes the challenges that JC Penney faced in the 1990s and developments that it brought in 2000. JC Penny was a retailer on the front line in the U.S. thus, found it difficult to embrace changes in the late 1990s. The plans for growth became an obstacle to its effective operation in the 1990s, which later contributed to the company’s improvement. JC Penny relocated from a decentralized merchandising system to a consolidated merchandising system. The company linked its business goals with HR practices and put aside the Eckerd drugs store to pay attention to its main business (Venkatraman & Vasudevan 44). It shifted its operations to be a fashionable value-offering retailer. All the changes led to increased revenues and stocks increased from $10 in 2000 to around $ 50 in 2005 (Venkatraman & Vasudevan 45).
JC Penney encountered many challenges in trying to understand why organizations include foreigners at high management positions in times of crises. The company found it difficult to understand why companies have to be influenced by external factors in the macro environment and how these factors influence companies to adopt organizational changes. The company would not understand the impact of embracing changes in the technological environment as well. The company did not have adequate knowledge about the need for arranging individual practices like plans for compensation with business ambitions. Understanding how the emphasis on the main business could be used as a plan to increase the performance of the company was a problem. All these challenges affected JC Penney in different ways and hindered its performance.
Summary of Issues and Challenges
When JC Penney realized the deterioration of the company in 2011, it recruited Johnson from Apple Inc., who was expected to change the people’s shopping styles and attract young buyers. Johnson declared that he would make a change overnight and announced his strategy to turn around JC Penney. It was clear that Johnson and his team lacked consideration for J Penney’s policies and did not make decisions wisely. Johnson began by presenting his vision to replace top managers and middle managers. However, his potential alternatives for creating changes failed. The new pricing strategies chased away the main customers from the company. The company received negative comments on its Facebook page and store sales declined. It begun to incur losses and at the end of 2012, it had lost 985 million dollars while the prices of shares had declined drastically. Johnson used a wrong approach in rebranding JC Penney. His actions to rebrand the company caused him to lose clients to the competitors.
The radical changes to promotions, merchandise, and prices that attracted enthusiasts sent away loyal customers from the company. Mike Ullman was appointed the new CEO of JC Penney after Johnson’s strategies worsened the stores’ condition. He applied several wits as part of turnaround strategies that aimed at restoring JC Penney’s customers and financial position. The JC Penney’s turnaround strategy focused on a long-lasting development. The main elements of the strategy were: regaining private brands, closing all poorly performing national and private brands, establishing enthralling merchandise assortments and initiating continuous shopping skills in the stores. The company had not yet learned its mistakes after the era of Johnson in the 2014 super bowl. The company used the Twitter to generate a buzz during the game. 45 minutes were spent in twitting purposeful typos leading to many people believing that either their account had been hacked, or the account’s operator was under the influence of alcohol. According to the company’s spokesperson, it was later realized that it was a promotion strategy (Currie 20).
When the spokesman stated ‘twitting with mittens,’ she meant that they were tweeting with their mittens on. She later explained that it aimed at to enabling the company to find a way of staying above the super bowl fray and create a narrative in its place and position. The company’s management team thought that it would make a perfect attraction, since it was cold and the USA mittens were being sold during that period. It realistically showed that JC Penney jumped to tactics without giving a thought to the strategy, which is a mistake they had earlier committed under the Johnson era. The twitting with mittens promotion did not fit into an overall branding strategy even though the brand gained a few more Twitter followers. The tweeting with mittens did not seem to fit into that goal directly since they were up and down trying to correct the Johnson mistakes by re-instating promotions and stores to their pre-Johnson layouts (Currie 23).
Presentation of Potential Alternatives for Addressing Issues and Overcoming Challenges
In the JC Penney case study, Johnson would have had alternatives such as approaching the branding of the company from a strategic standpoint. He was trying to import strategies that had worked well with the young Silicon Valley brand, Apple Inc. to that of a legacy brand, JC Penney. All those radical changes failed in the JC Penney Company. Johnson failed to estimate the fragility of the relations with key publics, which proved to be much costly at the end. Johnson was poor in making business relations. He should have employed good public relations counsel that would have assessed the situation quickly. The company would not have fired the two agencies responsible for guiding the organization’s strategic communication. Johnson would have guided a good replacement theory properly and strategically instead.
He should have made assumptions that fitted with the macro business environment of the company. However, his assumptions were never fitted with reality. The tactics of cutting down prices and remodeling the store layout into smaller specialty shops should not have been employed because it was based on a poor assessment of the environment. The company’s alternative strategy would be to tweet with posts of photos of football fans wearing the re-introduced JC Penney merchandise to solve the challenge that brought the twitting with the mittens. Another alternative would be posting images of people watching the football game in football themed t-shirts with the newly reinstated JC Penny logo. As a result, the company would be in line with the conversations on Twitter on super bowl and keep their objectives in line.
JC Penney should have introduced more modern merchandise slowly while still maintaining the legacy brands; an example being the popular St. Johns Bay on their shelves. The company’s website should have been modernized hence serving as a significant refresh of activities. A constant state of adapting the presence of the online services is crucial to the new shoppers. It should have enacted moves to emphasize on the company’s core values that were there from the beginning; quality and customers services. It could have affirmed the current customers’ loyalty to the current brands and attracted potential customers.
Implementation of Actions and When/How Analyzed
Whenever a brand takes an initiative to modify or re-invent, the need for a strategic approach is vital. A brand should not be modified without considering the needs of the current customers. The public relations counsel is vital since it highlights the relationship between the brand and its public when modifying an existing brand. Therefore, it should ensure that other key business constituents are not distraught during re-branding or altering the business theory consultation with public relations.
Conclusion
In the onset of brand modification, reinvention and other changes in business policy, there is always a great need for an up-to-task strategic approach. The approach broadly includes the high management office in the company through discussions with the public relations management. It leads to the identification of the advantages and possible risks that the company faces if it decides to re-invent or modify a brand. The way the customers relate to the brand is the most important aspect of brand selling. It is observed and understood better by the public relations office of the organization with the aim of making more brand sales (George, Alexander & Andrew 56). The company should prioritize the needs of the customers. In the case study of JC Penney, John would have a good ground of altering the existing JC Penney business theory without defects on other constituents had he taken into consideration the need to understand the relations between the brand and the customers.
Work Cited
Venkatraman, Natarjan, & Vasudevan Ramanujam. "Measurement of business performance in strategy research: A comparison of approaches."Academy of management review 11.4 (1986): 801-814.
Currie, Graeme. "The influence of middle managers in the business planning process: a case study in the UK NHS." British Journal of Management 10.2 (1999): 141-155.
George, Alexander, and Andrew Bennett. Case studies and theory development. Free Press, 1979.
