Management at J.C. Penney Company Inc - Research Paper Example

J.C. Penney Company, Inc. Number Introduction Known by its full J. C. Penney Company Inc., JCPenney or JCP is a US chain comprising several mid-range departmental stores that are based in Texas, Plano. JCPenney was founded in 1902 in the United States, Kemmerer, Wyoming. The original founders of the company are James cash Penney (from whom the company derives its name) and William H. McManus. At the moment, JCPenney has grown to operate 1,107 departmental stores. These stores are distributed throughout the United States and Puerto Rico, though the company has its headquarters based in Plano, Texas. The company deals in conventional merchandise such as beds and beddings, home appliances and furniture, women and men’s clothing and baby layette, handbags and accessories, gifts, jewelry and watches (Carsky, 1994). JCPenney also leases its premises for departments such as portrait studios, optical centers, Seattle’s Best Coffee, Sephora, salons and jewelry repair. The fact that JCPenney has been around for more than a century definitely means that the organization has undergone several changes in its styles and approaches to management, as shall be seen in the ensuing discourse. Question 1 Section 1: Two Key Changes in J.C. Penney’s Management’s Style from the Company’s Inception to the Current Day One of the key changes that accompanied JCPenney’s management style has been the overlooking of its security of tenure which it has always extended to its management executives. Over time, JCPenney has always accorded its shareholders, employees and its directors a guarantee of uninterrupted period of at least two years. However, this trend was broken once after the appointment of Ron Johnson as the chief executive officer (CEO). Johnson had served Apple Store and was replacing Mike Ullman who is reputed for having run down JCPenney for seven uninterrupted years. However, when JCPenney saw that two years after Johnson’s absorption, the company was seriously plummeting in profits, sales and stock price, Johnson was dismissed (Slywotzky and Weissel, 2002). JCPenney has also reviewed its strategies to ward off the risks that it is facing and to lessen operational costs. For the first in its history, JCPenney intends to close 33 of its stores in 2014 and thereby joining McDonald’s Macy’s, Barnes & Noble and Family Dollar league. With the cost of operation having been attenuated, it is expected that the company will be able to use its plough back profits to reinvigorate itself. Section 2: Personal Standpoint on JCPenney’s Management From a personal standpoint, JCPenney was not properly managed, though there is room for improvement. The proneness of JCPenney to mismanagement is illustrated by how fast the company has replaced CEOs. Within three years, the company had replaced Ullman with Johnson and recalled Ullman. The impending closure of 33 JCPenney stores is also a culmination of wanting management approaches. The fact that Johnson could introduce drastic and fundamental plans (such as the abandonment of high-low pricing coupons, acquisition of Joe Fresh cloth line and facing out deep discounting) unchecked bespeak bad management style on JCPenney directors- not Johnson alone (Carpenter and Brosdahl, 2011). The promising part of the management is that following Ullman’s return to JCPenney, the company has been able to identify its position. Because of this, successful retailers are willing to work with JCPenney. Question 2 The senior management plays a pivotal role in preparing the organization to shift from a catalog-based retailer to an Internet retailer. This is because, it is this team that discusses the prospects of such a move with the view to either adopt or reject it. It is this same team that will determine the finances that should be invested in Internet retailing, since JCPenney has to arrange programs according to priority. The senior management will also determine the phases and processes through which Internet retailing will be executed. The transition to Internet retailing was seamless. This is because the move was a culmination of JCPenney’s contract with Viewtron Videotex in 1983. Viewtron Videotex had already availed the resources for online marketing and JCPenney easily sold its products online through Viewtron Videotex (Gertner and Stillman, 2001). Question 3 It is likely that JCPenney management’s decision to use celebrities as key merchandise vendors and spokespersons is bound to facilitate higher sales volume. This is because America widely values celebrity status. Leading brands such as Nike (a la Michael Jordan), Puma, Calvin Klein and Giorgio Armani have consistently used celebrities as key merchandise vendors and retailers. JCPenney can enter into an agreement with celebrities of choice so that they can offer these celebrities services at subsidized rates while these celebrities market and speak for the firm at friendlier rates. This will be instrumental in warding off the exorbitant cost of advertising which characterizes celebrity marketing (Waldon, 2006). The use of celebrity advertising is bound to help JCPenney increase its volume of sales and restore the company’s struggling image. This is because, presently, the company has a significant communication disconnect between itself and consumers. The mass following that celebrities have will also help the matter. Question 4 As a manager within the JC Penney organization, the firm is to use electronic media to bridge the JCPenney-consumer disconnect. In this light, all electronic media advertisements are to be accompanied with a restatement of the company’s business ethics. This is to acquaint the market with the values that JCPenney operates and exists by. Every person who places orders for JCPenney merchandise online is to be accorded a special discount as online transactions are cheaper, save paper work, penetrates the (American) market that has become more virtual more readily and comprehensively and requires less human input, compared to conventional systems. Clients who refer 10 other clients to JCPenney are to be accorded special discount. The discount increases when the number of clients increases by 10. Question 5 JC Penney’s can adapt to the changing needs of customers and the market environment. This is especially the case since JCPenney has already identified the areas that need addressing. These areas are the lacuna between JCPenney and its clients (or the public), setting proper priorities (JCPenney has appreciated the need to stop spending extravagantly on its brands and the need to steer clear of anti-climatic miscalculation which JCPenney brand has suffered extensively from. To rejuvenate JCPenney, it will be important that the organization embraces consultative management structure. The organization can retain its structure but the CEO is not to make and order the execution of key decision without the participation of the managing director and the rest of organizational executives. Organizational stakeholders are also to be consulted through their representatives when major policy changes are being contemplated. This will ward off the dangers of acting on maladroit strategies as was the case when JCPenney sought to abandon high-low pricing coupons, acquire Joe Fresh cloth line and expunge deep discounting simultaneously. References Carsky, M. L. (1994). Creating an American Institution: The Merchandising Genius of J. C. Penney. The Business History Review, 68 (2), 294 - 295 Carpenter, J. M. and Brosdahl, D. J.C. (2011). Exploring retail format choice among US males. International Journal of Retail & Distribution Management, 39 (12), 886 - 898 Gertner, R. H. and Stillman, R. S. (2001). Vertical Integration and Internet Strategies in the Apparel Industry. The Journal of Industrial Economics, 49 (4), 417 - 440 Slywotzky, A. and Weissel, M. (2002). The reinvention and sale of J.C. Penney’s Direct Marketing Services unit. Strategy & Leadership, 30 (1), 18 - 22 Waldon, G. (2006). J.C. Penney Likely Headed to Shackleford. Arkansas Business, 23 (31), 1 Read More