SWOT Analysis
SWOT Analysis
In
order to fully understand the current position of J.C. Penney and the ways in
which improvement and campaign suggestions may enhance performance, it is
important to conduct a SWOT analysis of the company. Strengths, weaknesses,
opportunities, and threats both inside and outside the organization are
revealed when a SWOT analysis is conducted on a company. A SWOT analysis for
J.C. Penney is provided below.
Strengths
J.C.
Penney has various strengths that range over a variety of areas. A wide range
of products and services are offered by J.C. Penney; footwear, electronics,
clothing, jewelry, furniture, and beauty products (Global Compose, 2016). J.C.
Penney has a presence in over a thousand locations and has been known to have
great revenue performance in the past (J.C. Penney, 2017). A customer first
initiative is taken by the company and they even offer free haircuts for kids
to demonstrate this (Adam, 2015). Products and services are offered on vast
levels because of the existence of multiple retail channels (Adam, 2015). Different
private labels have been launched by J.C. Penney and the company has a
relatively balanced brand portfolio (Adam, 2015, & Global Compose, 2016).
In addition, J.C. Penney has strong service and product quality (Adam, 2015). Despite
the company’s many strengths, there are still some weaknesses that need to be
addressed.
Weaknesses
There
are some weaknesses present for J.C. Penney and this marketing plan may be able
to lead the transformation of these weaknesses to strengths over the next
couple years. Inconsistency in stores may be the cause of varied assortment
(Global Compose, 2016). Promoting a leading brand for each department that must
be carried in every store location may be a resolution for this weakness; for
example, Ivy Park may lead the active wear category and Young and Reckless the
millennial style category. Store sales have experienced a great decline for
J.C. Penney (Adam, 2015). A fresh brand reimage to better target millennials
may increase interest and result in more store sales. Additionally, current
political objectives could significantly increase store sale interest because
tax payments may decrease and operational costs decrease. Due to competitors
with similar offerings, J.C. Penney has a limited market share (Global Compose,
2016). Creating brand differentiation by promoting new millennial focus and
quality brand name additions may be a solution for this. J.C. Penney is
experiencing poor monthly sales data (Adam, 2015). Creating a campaign to get
people into the stores, perhaps a J.C. Penney exclusive replica of Black Friday
in May that targets millennial style for the summer months, based around the
new brand focus could be beneficial. Especially in emerging economies and in
comparison to some competition, global presence for J.C. Penney is low (Global
Compose, 2016). Increasing company reach by expanding online presence and
opening stores in rising developing countries could be a solution. J.C. Penney
also has various opportunities available to the company.
Opportunities
A
few different opportunities exist for J.C. Penney that should be considered to
strengthen the company and brand. Disposable income of customers is increasing
and this could be exploited by offering brands that are cost effective,
including any J.C. Penney brands, and brands that are more expensive but known
for higher quality, including the new brand choices of Ivy Park and Young and
Reckless (Global Compose, 2016). Connections with smaller retail chains are
another opportunity for J.C. Penney (Adam, 2015). Connecting with new brands
like Ivy Park and Young and Reckless to sell these brands in J.C. Penney stores
and online could better reach the millennial target audience. Especially in
emerging economies, an opportunity for J.C. Penney is tapping into the
international markets more (Global Compose, 2016). This could be accomplished
by expanding the J.C. Penney brand to emerging developing countries and adjusting
styles and partnerships to fit the consumer preference of these areas. Through
advertising and by offering services that focus on customers, J.C. Penney can
enhance its visibility (Global Compose, 2016). A new millennial
focus, increased social media presence, and development of a forum or brand
connection social platform may be a way to tap into this opportunity. A great
example of this can be seen with Ford’s social network; Ford Social. Launching
exclusive and private label brands is another opportunity J.C. Penney has
(Global Compose, 2016). Launching the new brands targeting millennials and
beginning creation of a J.C. Penney millennial aligned brand may be a way to
capitalize on this opportunity. Creation of a J.C. Penney clothing brand for
millennials will ensure targeting abilities even if partnerships with other
popular brands end. J.C. Penney could even acquire a small retain chain and
venture into more online investments (Global Compose, 2016). In addition to
strengths, weaknesses, and opportunities, J.C. Penney also faces various
threats.
Threats
Threats
exist for J.C. Penney that should be considered and addressed. One threat is J.C.
Penney is losing market share to major competitors like Macys and Kohl’s
because they are expanding (Global Compose, 2016). Expanding is possible by
connecting with and adding new brands, creating a presence in emerging
developing countries, and enhancing online presence to increase company reach;
ensuring to have a website for as many different countries as possible and shipping
options available to each. An additional threat J.C. Penney faces is the
economy even though the company plays at the price point level (Global Compose,
2016). Even though J.C. Penney offers low prices on most all of their
merchandise, they need to specialize some and offer some higher end products
that consumers really desire or need in order to thrive in the struggling
economic conditions. J.C. Penney can have weak financial projection without
implementing changes and in fear of damaging their brand some manufacturers are
becoming hesitant to supply J.C. Penney; reimaging the J.C. Penney brand and
targeting a new main audience may assist in encouraging manufacturers to
continue and begin working with J.C. Penney (Adam, 2015, & Global Compose,
2016). Another threat J.C. Penney faces is the rising cost of labor in its
country of operation; the United States (Global Compose, 2016). Under the new
administration, cost of labor may become less of an issue for J.C. Penney.
However, it may be beneficial for the company to consider opening up to
manufacturing opportunities outside the United States to decrease costs.
SWOT
Analysis Chart
Authors
TaShannah Crippen
Professor Harry Derderian
Marketing Strategy and Design
Baker College Online
04/12/2017
References
Adam. (2015, October
05). SWOT Analysis of J.C. Penney.
Retrieved from
Global Compose. (2016,
January 15). SWOT Analysis of J.C Penney.
Retrieved from
http://www.globalcompose.com/blog/sample-essay-on-swot-analysis-of-j-c-penney/
J.C. Penney. (2017). Company Information. Retrieved from
http://www.jcpenney.com/jsp/browse/marketing/promotion.jsp?&pageId=pg40036000011
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