STR/581 : Strategic Plan

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Strategic PlanSTR/581Analyze JCPenney's strategic plan, focusing on its operational excellence, new leadership, and productstrategies. How does the company aim to regain market position through its cost leadership anddifferentiation efforts? Include specific tactics and resource allocation in your analysis. (Word count:1,500-2,000)

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Strategic PlanJames Cash Penney startedJCPenney, now knownasJCP,110 years ago.Penney aspiredto be a lawyer for his family was not really well-off. His father was a Baptist minister and a farmer.Henever had an opportunity to start in law school due to educational expenses that his family cannot afford.He worked in a local dry goods store where he became an assistant manager in Golden Rule Store. He hadthe chance to acquire one-third of the venture. In five years time, that was 1907, Penney acquired that ofhis partners (Soylent Communications, 2012). He had a vision to establish an entity that treats people theway he wants to be treated and this is what people commonly hear as “fair and square”. His very firstretail business was named Golden Rule as based on his philosophy in life coming from the words ofConfucius: “treat others as you want to be treated”.JCPenney was successful in his business for longyears. His venture has the capacity to be an industry leader in innovation, pricing, and marketingstrategy. Way before internet was invented, JCPenney offered catalogs to showcase their products.Andnow, they have jcp.com and their facebook page in which they do their promotions, marketing and sales(Toy, 2012).JCPenney had difficult times in keeping a close competition with Macy’s and Dillard’sDepartment Store especially when there were costs hikes when sales were down. The company adoptedmeasures to deal with its problem. There were reorganization and product modificationsto satisfy theircustomers. JCPenney used to adopt a Mission Statement that speaks of the company’s aim to providefashionable and high quality products at reasonable prices.It wishes tosupply its customers the bestservice and products that an entity can provide. By establishing stores in ideal locations, JCPenney canrespond to customer orders and inquiry on a timely manner.Today’s vision of JCPenney includeseight "Winning Together Principles"-associates, integrity,performance, recognition, teamwork, quality, innovation, and community.All associates are valued, developed and rewarded by JCPenney for all their hardwork and skills.To show the company’s integrity, JCPenney conducts its business in accordance with ethical businessprinciples. Trainings and comments are provided to personnel to boost their performance. The success of

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every employee is recognized by the company.To show teamwork,JCPenney’s workforce strive forsuccess together by means of headship, cooperation, open and straightforward communication, andrespect. The company aims to provide quality and innovative products, work, and services with the touchof creativity and smart ideas. As part of JCPenney’s ethical principles, the entity cares for itsenvironment.Before the end of 2011, JCPenney recognized the necessity of bringing together a new setpersonnel to fill the organizational hierarchy especially the top level who would lead the entire teamtowards the fulfillment of its revised vision. One of the persons who filled a very important position isRon Johnson, the company’s new CEO since November 2011. Johnson has a very competitive record inthe field of retail business and he is the man behind the success of Apple Inc. and Target Corporation.Another personality is Michael Francis who became jcp.com’s president during December 2011. Havinga successful experience in Target Corporation, Francis provided JCPenney with his skills in marketing,merchandising methods, and harmonization. For financing, relationship with stakeholders, companyplans, budgeting, supply chain, management of resources, and technological innovations, JCPenney hiredMike Kramer as its new COO during December 2011. JCPenney’s Senior Vice PresidentMichaelDastugueis its present Chief Financial Officer. This new organizational line-up was introduced byJCPenney to achieve its target sales figure and give its entity a new image that can help attract newcustomers.JCPenney has this new program statement that shows the entity is redoing things and is willing torecover from the negative effects ofthe past moves the entity made. It further announced that theirorganization wants to entertain clients the way they want to be entertained: fair and square. JCPenneywants to be of value to the community more than its goal to be the biggest store in the retail industry. Thecompany strives to be the American’s favorite store(jcp.com, 2012).This program characterizedJCPenney and confirmed the philosophy of the entity’s creator.After the company experienced decreasing revenue figures for a matter of ten years, it has nowdecided to follow a new strategic plan. Its aim is to offer its products at affordable pricesand give its

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clients memorable and satisfactory services at the lowest possible cost. The company adopted a strategythat would entail the lowest cost and that would provide products matched to the needs of specific class.When a generic strategy is already in place, the company shall reflect on execution plans that best suit itsstrategy.Identify the Best Value DisciplineThe very foundation of every successful company can be one of the three important concepts ofvalue discipline. These concepts are operational excellence, product leadership, and customer intimacy(Horwath, 2006). In operational excellence, the company is devoted to provide the clients with the bestvalue products (Horwath, 2006). In customer intimacy, the company is devoted to provide specific clientswith their specific requests thus promoting individual contentment. In product leadership, the company isdevoted to provide its clients with the endless supply of trendy items and services (Pearce & Robinson,2011).The latest program of JCPenney aimed to earn client’s trust and provide product segregationthrough its pricing strategy. In 2011, the company introduced the two latest member of its board. Theorganization validated this information by releasing the statement that these two new directors have thesame enthusiasm as those of the current members and that enthusiasm is to achieve success for the entity(jcp.com, 2012).Of the three value disciplines, JCPenney is adopting operational excellence. The entity aimed tooperate in the most efficient means by lowering overhead, minimizing non-value adding activities,minimizing transaction expenses, and maximizing resources and potentials (Pearce & Robinson, 2011).With these, it is evident that the foundation of JCPenney’s new method is its operational excellence.Identification of a generic strategyGeneric strategy is a means to execute a grand strategy with no other framework but to aim forsuccess in the industrial competition. Generic strategy can be classified into three. These are aiming foran efficient industry leadership; aiming to release exceptional products for people from all walks of

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