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The industrial analysis is important
to know from the economic, social and political points of view.
Improvements
in retail markets in the US of strategic audit
of jcpenney
Improvements regarding various apparel
retail markets are analyzed which shows greater improvements in markets of the US. After passing much time of instability in the
growth. JC Penney is considered to be the
most sizeable and stable retail store; therefore, with the time behavior of
consumers and the environment related to shopping are still growing. Many
analyses have been performed, and it is evaluated the retailers will be one of the
reasons for giving a successful future for rates in optimum states
Analysis
of JC Penney at the economic level of strategic
audit of jcpenney
The analysis of JC Penney provides the
best retail ability not only to men or women but also to the children by its
products. According to data from 2014 it has been calculated that sales of the company
by women are more than men as sales are more increased by women who cost about
24% as compared to men, which accounts for 22%. Therefore, the total revenue
has shown an increase in growth in very short and medium time.
Remodeling
market for home renovation of strategic audit
of jcpenney
For home renovation US. Has been
playing a great role in consumer spending behavior. So it is more important for
JCP to fix the home business for increasing it's worth side by side. As it is a
great need for every home to have the best renovation. Therefore, JCP imparts a
great role once, and it was acting a great leader for the best shops at home
bases. This company exhibited many sales from 1.3 billion dollars to 4.2
billion dollars in 2013. Therefore, these aspects show that new home sections
have positively lifted up by the sales given by the company.
Rising
wages of labor of strategic audit of jcpenney
In the past few years, the cost of
labor has been rapidly increased from 4.1% to 2.7%. These values were estimated
in 2014. This estimated amount and increase in the status of labor put forward
the positive aspects of the industry at great controllable expenses. Labor
seems to be more important and visualize in the form of cast drivers as
compared to sales drivers. But on the other hand, quality is mistreated as they
pay lower wages sometimes do not offer sufficient benefits and inadequate
training. These factors put negative impacts sometimes.
Figure 3: JCPenney: team case analysis
Technological
point of view analysis of strategic audit
of jcpenney
In online shopping, JCP rises the
activity of sales and web sales by 1.080 billion dollars in 2013 and 1.225
billion dollars in 2014. And the website of JC Penny accounts for more than 10%
efficient working. Moreover, working in the form of an internet retailer to top
guide which reported the status of JCP and ranked top 37 in this top guide
represents the well-organized status of JCP about e-commerce. Thus the industrial
analysis is well-operated by such point of view and results in an increase in
total sales in many billions
Political and Sociocultural analysis of the industry
It has been estimated that two giant
retail which is JCP and Macy has been embroiled legal conflict and survived
through any critical situations in previous times but after that JCP
represented itself as one of the best suppliers, and it ensures that all the
suppliers comply with legal compliance programs and subjected to liability
issues. While sociocultural behavior was different among JCP for past years as
many of the small stored set aside and continued to close in 2005 and 50% of
the malls were considered as B level malls according to the reports of many
advisors
But other locations were also considered which
constitute about 25% and found in A prime location and there is a need for
improvement of numbers. Therefore for compensation and growth initiatives plan,
JCP organized the center of core for stores, and it persisted in the traffic
areas in high rates regarding the many cosmetics and fashion accessories for
meeting the demands of the people and stabilize the negative impression
Porter’s 5 Forces
There are major forces that show much
concern about the retail and department stores industry which are more
concerned about the status of the company and followed five important forces
New
entrant and its threats of strategic audit
of jcpenney
Many retail and department stores that mainly
consist of small numbers but highly competitive firms. And in the case when the
number has fallen o a dramatic rate it constitutes much less competitive firms.
But on the other hand, JCP has seen to be more successful and large store
chains in the history that overcome many hurdles. These hurdles are consisting
of many types, and these barriers limit the level of new entrants and their
threats, and they make their own records and find no competition with other
companies
High bargaining power of buyers of strategic audit of jcpenney
The retail departments have mainly
high power of buyers, and these buyers exhibit high bargaining power. It surely
drives companies to compete for prices. So it is more important for companies
to make private brands and give values and quality to the products. And Retailers
should stay wise in balancing such sensitivities of the consumer in a great
manner.
High
threat of substitutes of strategic audit
of jcpenney
As many companies try best to attract
consumers with definite and well-organized discounts, so there are always
threats because consumer to find many options. Here it is important for JCP to
take into account and act wisely to understand the effective consumers' demand
and respond effectively
Low to the moderate bargaining power of suppliers
Mainly suppliers deal with little
bargaining power and enable them to deal with high demands. However, it is more
important for JCP, which carries highly exclusive private brands should shift
some of the power to suppliers as well.
Intense rivalry among competing firms and power of stakeholders
It is important to know that retail stores and departmental stores are found to be the most competitive. Sometimes competition between the stores and industries move to exceed level, and it causes a rivalry state in between good and services. They tend to use some unethical ways to shutdown the optimistic status. So a firm approach is needed. Therefore, stakeholders hold much demand and importance in companies like JCP to maintain the influence and power over the companies for meeting the financial needs by making many strategies ( Bianchi et al., 2004).
Potential Profitability of the Industry
Industry CSF’s, Successful &Failed Organizations
There are much successful and failures
about the JCP industry and accounts for many consideration
Successful organization of strategic audit of jcpenney
In JCP stores with maximizing floor space and
consolidated popular brands, it has visualized that JCP provides many
availabilities for simple and displaying products so that customers easily
avail of the products by reaching towards their needs easily. Moreover, due to the
introduction of innovative products and brands offer it attracts many people to
buy different products
The main success of the organization is the presence
of profit margins that may exceed due to the decrease in rent and maintenance
and with the presence of technological times and many methods to deal with
consumers and users of the internet
Introducing new details helps the customers to shop for numerous things and in return expand their target market.
Moreover, the restoration of corporate images and the establishment of relationships in the chain from past to present and presenting the products for the future allows the customers to say in contact.
maintaining the campaign JCP surprise customers for purchasing the desired items
The most important and successful features
about JCP are much concern shown by stakeholders who care about the corporate
image of JCP. And maintain the standards
Another success of the organization is the emerging concept. This organization besides many hurdles growing internally and externally by establishing and creating new business leaders within JCP. It also created an environment of learning and growth for corporate leaders and focused primarily on the existing employee.
Failure of organization of strategic audit of jcpenney
JCP exhibit many weaknesses in which one of
the biggest weakness is not having a proper financial background. So financial
performance is considered much weak. There is a need to apply various
strategies to improve market performances at the financial level.
Due to the recent lower financial status, JCP
is not fully capable of improving the major needs and there is a difficulty for
implementation of discrepancy in aligning form.
Moreover, shifting corporate culture is considered
time-consuming and complicated. Therefore, there is a need for focusing the
customer relationship which produces a long-term effect with positive behavior
simultaneously.
Moreover, the CEO plays a great role in
tackling many hardships of JCP or any organization. A CEO has well-organized
power and capability to handle situations and work for sustainability in the
industry or any targeted market. Therefore the failure of the company lies
indirectly on the committed CEO so dealing with market shares and other details
it is important to work under the highly motivated and competitive CEO.
There is a need for the High Corporation of organization and need patience with each individual member. As redefining of proper mission require critical thinking, time and effort. As a gathering, every single member on one page is not an easy task so a proper mission is used to develop for overcoming huge problems of failure.
Critical Success Factors for the industry of strategic audit of jcpenney
Besides many successful and negative
impacts on the organization, the value chain is considered the biggest factor
for driving the company to be more profitable and unique. These factors help
the inventory turnover ratio and on the major level what is actually presented
to the customer especially when they arrive in stores. The selection of various
brands by JC penny and their sell on a broader level in stores related to
special brands and thus mainly constitute raw materials and in return exhibit
value chain to a broader and wide level. No doubt customers will not attract to
the company without these well-recognized brands.
Although the manufacturing of JC penny
is mainly half of the total brands they sell they constitute high order and
performance at the global level and made a remarkable reputation all along with
the country. Many suppliers are inbound and logistics of the company and it has
been evaluated that one of the most popular brands of women named Liz Claiborne
has gained much importance at global production lines and the main reason
behind is the sustainability of annual reports and cost-cutting at the global
level. Moreover, successful global production is also because of the advantage
of increased visibilities. Moreover, this organization is playing the best role
globally by delivering merchandise to the distribution of firms in the center
just like JC penny and remain more competitive in the market
. It is interesting to know that JC
penny is successful in working on more than 700 factories which are considered
the most successful and leading perspective of JC penny at a global level.
Because using 700 factories across more than 25 countries has been proved a
great lead for the production of private brands. Thus it has provided better
supply chain management for keeping up the technology. So enhancing the marketing
and sales online or on the website giving many updates about the latest brands
has brought JC penny to much upper level in the technology development and
spread more promotion in social media. It has created more ways to reel many
customers to stores by the new technology of the mobile application market
which is the best strategy to gain the attention of every single individual at the
global level.
Not only this but the market has taken into account the sales and promotion besides corporate structure and culture JC penny have offered a massive amount of discounts through advertisements and these aids are easily assess to every person. And from the year 2014, the world has properly introduced viewed events globally (Ghazzawi et al., 2015).
identification & analysis of global factors & application
Analysis of Micro Environment
Political factors
The political factors are the main
determining factors about the impact of the J. C. Penney company and to measure
the long-term profitability in a certain country or market. J. C. Penney
Company is operating in department stores in more than a dozen countries. The
company faces different types of political system risks and political
environments. The company achieves success in the industry of department stores
across the number of countries. The services of J. C. Penney company are
diverse and dynamic and sometimes face systematic risks of political
environments
1) The risk
associated with a military invasion.
2) Intellectual
protection of property
3) Impact of
department stores of J. C. Penney company on the economy of country and effect
of political stability on a certain market.
4) Interference
and the bureaucracy in the departmental stores of J. C. Penney company by the
government
5) Contract
enforcement and legal framework
6) Antitrust
laws that are mainly related to the department stores
7)
Tax
rates, incentives, and taxation
8) Tariffs
and trade regulations that are related to the provided services
9) Pricing
regulations and the regulatory mechanism of the J. C. Penney company for the
services.
10) Mandatory and important employee benefits
11) Overtime considerations along with the wage
legislation or minimum wage consideration
12) The safety regulations of the industry in the
different safety sectors
13) Requirements of department stores and the
product labeling process carried out in J. C. Penney company.
14) Trading partners and contract of J. C. Penney
company with them
Economic factors of strategic audit of jcpenney
In the macro-environment factors that
are some impinging factors that induce significant impact on the growth and
development of J. C. Penney Company in the industry, for instance, savings rate,
inflation rate, foreign exchange rate, interest rate, and economic cycles that
determine the aggregated investment and aggregated demand in the economy of the
country. The microenvironment factors also have a significant impact on
competitive norms, and it provides a competitive advantage to the firm J. C.
Penney Company
1)
Rate of inflation
2)
Rate of
interest
3)
Discretionary
income
4)
Rate of
unemployment
5)
Economic
growth rate
6)
Stages of
business cycle such as recovery, prosperity, and recession
7)
Levels of
education in the economy
8)
Productivity
under the economic factors and labor cost
9)
Some of
the comparative advantages for the services sectors and the host country
sectors in a particular country.
10) Level of skills and knowledge in the
department store of J. C. Penney company
11) The quality of infrastructure of department
stores of J. C. Penney company
12) The efficiency of the financial market and
how J. C. Penney company is supposed to increase the capital rate in the local
market
13) The analysis of the economic system for the
operations of the company in different countries and the type of economic
system that is stable or unstable under different circumstances
14) The related services of J. C. Penney Company
and government intervention in the free market
15) Stability of the country in which J. C.
Penney Company is providing services and stability of exchange rates
Social factors of strategic audit of jcpenney
The culture and norms of society have
a significant impact on the environment in which the company is operating. The
attitude as the shared beliefs of the company defines the ways in which the company
plays a great role in the international market. J. C. Penney company understands
the customers in the market and who the given market expects for the services
1)
Leisure
interests
2)
Attitudes
of the customers and service providers such as consciousness, environmental
impact, and health considerations for skilled employees.
3)
Broader
nature of the society and entrepreneurial spirit of the society. Some of the
members of society encourage the entrepreneurship of the J. C. Penney company.
4)
The
cultural differences and their impacts such as social conventions, roles, and
gender
5)
The
education standards in the society and the levels of education of the employees
in the J. C. Penney Company
6)
The power
structure, class structure, and the hierarchy of the society
7)
Level of
skills and the demographics of the population
Technological forces of strategic audit of jcpenney
Technology is emerging rapidly in the
industries across the boards. The improvement in technology leads to an
improvement in the transportation industry, health, development of society, and
improvement in skills and education of the concerning society. The best example
of technology improvement is to illustrate the development of the
transportation industry. over the past few years, the industry has been
transforming and establishing a state of services for the customers. The taxi
industry is also dominating in different forms such as lyft and uber
1)
Rate of
technological diffusion in J. C. Penney company
2)
Impact of
the technology improvement and implementation on the cost structure of
department stores industry of J. C. Penney company
3)
The
impact of value chain structure is important to analyze in services sectors
4)
The
impact of technology on the product offering to the customers
5)
The
impact of technology on the services and products offered to the customers
Global Factors of strategic audit of jcpenney
The norms and standards are different
in each society for the services. These norms and standards induce an impact on
the profitability of the organization in markets. Some of the countryside
factors state different liability laws and environmental laws. The best example
of different liability clauses is environmental disasters and mishaps faced by
states of Florida, Texas and the United States
1)
Support
for the renewable energy system in J. C. Penney Company and attitude of the
company towards the new technologies
2)
Endangered
species
3)
Weather
4)
Recycling
5)
Ecological
products and attitude towards the green services
6)
Waste management
and analysis in the service sectors of the J. C. Penney company
7)
Water and
air pollution regulations that affect the working process in the department
stores of J. C. Penney Company
8)
Change in
climate and its impact on services
9)
Laws that
are defined to regulate the environment pollution
In different countries,
some of the institutes and the legal frameworks also have an impact on the
protection of services, property rights and intellectual rights of the
organization. The firms are supposed to have a careful evaluation of services
before launching the services in the market
1)
Data
protection
2)
Employment
laws, regulations, and rules introduced by J. C. Penney company in the services
3)
Discrimination
laws
4)
Intellectual
property laws and rules and regulations for patents and copyright of services
5)
Antitrust
laws implemented in the department stores and the country for the development
of the J. C. Penney Company
6)
Use of
eCommerce and consumer protection
7)
Laws
introduced for health and safety
Threats of strategic audit of jcpenney
The development of
business can be analyzed by the levels of threat faced by the company while
providing services to the customers. In the present analysis, J. C. Penney
company also faces several threats that prevent the company from the
actualization of any service and activities. The threat generates an
unfavorable situation in the environment and sometimes it makes it difficult
for the organizations to achieve the goals and objectives. To address the
issues, it is highly important to take immediate actions otherwise it could
lead to preventing the organization from maintaining the superiority and
existence
1)
Intense
competition is causing a threat to the company. The increase in stable
profitability is important that induces downward pressure on overall sales.
2)
The new
regulations about the environment under the Paris agreement 2016 could cause a
threat to existing product categories and services.
3)
Imitation
of the low-quality product and counterfeit also cause a threat to the products
and services of J. C. Penney company particularly in the existing low-income
market and emerging market.
4)
The
increase in raw material can also pose a threat to the profitability of the J.
C. Penney Company
5)
The
development of new technologies in the competitors also poses a threat to the
market disruptor.
Opportunities of strategic audit of jcpenney
The business opportunities provide a
competitive advantage and it can be considered as a driving force for the
organization. It is important to consider the time and services of J. C. Penney
company to achieve the goals of the company. In the present situation, the already
existing external environment is allowing the company to grow speedily,
overcome the weaknesses and then neutralize the threats presented to the
company by the environment. The external strategic factors are mentioned below,
and it can be used to analyze the possible opportunities for J. C. Penney's
company to grow and to obtain the goals.
1)
The low
rate of inflation is becoming more stable in the market which in turn activates
the credit at a lower interest rate for the customers of J. C. Penney company.
2)
The new
policies of taxation are providing a significant impact on the business
opportunities established for J. C. Penney company to generate profits.
3)
The
stable cash flow in different countries provides J. C. Penney company with the
opportunity to invest in the product segments and then work according to the
developed technology.
4)
The
decrease in the cost of transportation reduce the shipping prices and reduce
the cost of product provided by J. C. Penney Company and company gets more
opportunity to boost the profitability
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