Implementation, Strategic Controls, and Contingency Plans STR 581
Implementation, Strategic Controls, and Contingency Plans
To make JCPenney’s strategy successful all the important factors must be considered. The implementation plan has to be reviewed by top management to ensure that JCPenney will be walking on the roads of success. The new strategy will have effects on organization, improve its success rate, and modify financial expectations. JCPenney would have to identify the risk factors related to the strategy. It will guide the organization in making sound decisions. Implementation Plan JCPenney tried to create a newer version of the company through its strategic plan inclined to obtain a competitive edge. Hence, this implementation plan will focus on objectives, functional tactics, action items deadlines, task ownership and resource allocation.
Objectives JCPenney’s goal is to become the leading store in the retail industry. This objective is slowly being achieved by the company through its fair and square pricing. This pricing scheme includes three sets of prices. These are the everyday low prices, month long values and best prices. Its logo was also made to match that of the American flag to show its goal of conquering America. On the other hand, its long term goal is focused on establishing 80 to 100 more branding stores within a store.
Functional tactics These tactics are key elements in a company’s daily functions. These include framework, approaches in marketing, operation and manufacturing, and the efficient management of labor. All these are grand strategies that assure accomplishment of shortterm goals. JCPenney lacks differentiation thus; the company is adversely affected by economic changes. The company still has to improve on its product quality to continue its existence in the industry. Action Items and Task Ownership Action items must be identified in strategic planning. Every employee shall be oriented to giving the best customer service, properly trained, equipped with knowledge in pricing strategies, and trained in necessary technology. Milestones and JCPenney’s deadlines For successful implementation, JCPenney developed milestones and deadlines to create a timeline for its goals. Goal achievement is something which cannot be rushed. This is why the timeline they create shall be reasonable enough to finish the tasks in their proper schedule. Resource Allocation Allocating resources must also be considered in developing a strategic plan. But this was not the focus of JCPenney. Instead, the company focused on reduction of costs. The organization believes that this will bring the company to a greater height. The current
CEO of JCPenney said that closing stores will not make any sense when the company doesn’t have yet the control over the entire picture of the scene. JCPenney has been in business for 110 years and is one of the oldest stores and had been in the downside for the past five years. As disseminated marketwatch.com, JCPenney’s stocks were offered for $23.44. If JCPenney really wants to be “America’s Favorite Store.” it has to introduce further changes in its organization. JCPenney’s first leap towards the execution of its strategy is hiring a new chief executive officer effective November 2011. This new CEO is no other than Ron Johnson, Apple‘s former senior vice president (Wall Street.com). Johnson is popular for his successful crafts: Apple, Target, The Dayton Hudson Corp., etc. He is well equipped with skills and wisdom in the retail industry and his professional competency can carry JCPenney to the heights of success. JCPenney’s second move is analyzing the target market. The company evaluates individual preferences and analyzes the effects of the environment to these preferences (Aladwani,1998). The end product of this analysis shall disclose the opposing class of people, and then eventually identify their necessities and interests. Johnson has the better view on this because he knew that people are tired of deciding on the proper occasion to acquire items in the market. He stated that JCPenney can be America’s favorite store but it takes a lot of planning and implementation to achieve this (Korn, 2012). These modifications can make JCPenney a successful business in the industry.
Strategy and Key Success Factors Essential in JCPenney’s existence is the preparation of a strategic plan for key success factors. These success factors include maximizing revenue, distributing channels effectively, and managing the supply chain efficiently. Allocation of budget must be checked from time to time to monitor efficiency and effectiveness of the plan in meeting its long term objectives. Instead of increasing the dividend pay-out ratio, what must be monitored is the sufficiency of allotments to marketing and sales departments. This is in line with the company’s fair and square pricing strategy. Of equal importance is the budget for the work force department for it is the company’s resource of labor. The number of personnel assigned in every department and store must be considered. This therefore entails sufficient budget allocation for procurement process and trainings. The 2011 statistical data on its financials is anticipated to remain at its current high rate. Financial forecast reveals an increasing GDP which is expected to positively affect JCPenney’s financial status. The break-even point is where total revenue is equal to total cost. This point indicates the quantity where all costs are covered. Total revenue is arrived at by getting the product of the number of items sold and their respective unit prices. In effect, there is no income when no product is sold. In break even analysis, fixed costs components are highly important. Fixed costs are analyzed in relation to every unit’s variable cost components. Presented below are the breakeven presentations for some of JCPenney’s products.