Posted: May 25th, 2022

JC Penney management analysis

JCP — Kohl’s

Risk Factors

Don't use plagiarized sources. Get Your Custom Essay on
JC Penney management analysis
Just from $13/Page
Order Essay

JC Penney’s business has a number of risk factors. On the surface, JC Penney should be in a stable, uninteresting industry, but there are a number of risk factors, and the company’s recent difficulties have revealed some of these.

The first major risk factor is that JCP is, ultimately, in the fashion business. Any company that sells clothing faces the singular reality that clothing fashions change, and if at any point the clothes it sells are not in line with the latest fashions, it will be stuck with excess inventory that will have to be sold at a significant discount, in many cases at a loss. Purchasing is therefore a critical element of JCP’s business. The company’s purchasers must accurately gauge the coming trends for each season. There is a long lead time with respect to fashion trends — clothes go on sale at least one season ahead and buyers have to put in their orders two seasons ahead. This gap between purchase orders and the season creates risk for any company selling clothes, and a company that does the volumes Penney does is especially at risk. If they have a year where their inventory turnover is lower than expected, and revenues are down, that probably relates back to the purchasing function and a misalignment between their purchasing priorities and the fashions for the year.

Another significant risk for JC Penney is brand loyalty. Normally, a large department store has fairly stable brand loyalty, but JC Penney has learned the hard way in recent years that there is risk related to such loyalty. When you rely on brand loyalty and repeat business, as any large company must, that can create a certain inertia in the business, where management is afraid to make changes. JCP faced this situation a few years ago, when it wanted to shake up the brand, and made a series of decisions that ultimately alienated its core audience. The company was put on the brink of disaster, and changes to its pricing policies in particular lost it many regular customers, without replacing them with new ones. The company has undertaken substantial efforts in the past couple of years to restore brand loyalty (Halkias, 2015). It needs to — its stores have a tremendous, expensive physical footprint and it needs a lot of traffic in order to pay for that.

A third risk, faced by JCP today, is financial. The company has high fixed costs, and its efforts to transform its business have left its finances vulnerable as a result of declining revenues. In FY 2014, which ended in January 2014, the company had an operating loss of $1.242 billion. Successive years of operating losses have impacted on the company financially, and even last year it faced an operating loss of $89 million. So despite efforts to restore the company’s financials, JCP is still quite vulnerable, something reflected in its low stock price (below $7) and market cap (MSN Moneycentral, 2017). The value of the company’s equity has been hammered in recent years, and its retained earnings now sit at negative $3 billion on the balance sheet (MSN Moneycentral, 2017). It is about to finish its next fiscal year at the end of January so it will be interesting to see where it sits at that point.

There are other risk factors that are identified in their Form 10-K, in which a company is obligated to outline its different risks. Some are fairly self-evident, like the risks posed by competition. JCP does operate in a highly-competitive industry. On one hand, it competes directly against Kohl’s, Macy’s, Nordstrom, Dillard’s and other major department stores. On the other hand, the entire department store category competes against smaller shops — both chains and independent stores — for the clothing category. JCP’s direct competitors are typically large, well-run companies. But the entire department store category is struggling. Where Penney’s management snafus a few years back occurred was in trying to branch out because the category is struggling and the audience was aging. JCP tried a lot of things to win younger customers, who prefer smaller stores more directly targeting their needs. The company’s efforts failed, and managed to alienate members of their core audience at the same time. So the nature of competition proved highly risky, to the point where any misstep can cause the company to struggle. The best way to overcome this, of course, is by making the right decisions, and that starts with management.

The company is also vulnerable to recession. Mass market retailers are affected by broad economic conditions, so GDP growth and unemployment — classic macroeconomic measures — matter to the company. The Great Recession caused all companies in the industry to struggle. The key for JC Penney is that now after its management issues in the past it is more financially vulnerable than usual. A recession now would hurt Penney more than most of its rivals. The company needs to bolster its financials, or at least have a game plan for how it would react quickly to a recession, in order to mitigate this risk.

As with all company’s Penney is also a target for cybercrime. Cybercriminals can gain malicious code easily, and use that code to target companies. A large company is a great target, especially if it has not been investing in cybersecurity to the degree it wants. One with more of an old school culture is more vulnerable to phishing attacks, but ransomware or Trojans that target banking or customer information are also tactics that would be especially suitable for a company like JC Penney. The company needs to ensure that, despite its financial condition, it invests enough money into cybersecurity, in order to mitigate this particular risk, because it could cost them millions, damage the brand, and have a lasting effect on consumer confidence right at the time when the company is trying to build that confidence back up.

Management Process

One of the biggest stories in retail was the management disaster at JC Penney. The company, faced with static sales and an aging customer base, sought to reshape its image. The board brought in an Apple exec, Ron Johnson, who would theoretically bring fresh blood and an outsider’s perspective to the company. The move was an utter failure, one from which the company is still recovering to this day (Tichy, 2014). Johnson did not understand the retail business, the department store business, and the JC Penney culture.

To the company’s credit, it was quick to move on from Johnson’s disastrous tenure. This wasn’t a hard decision, of course, because the poor management was reflected in cratering sales, and it was possible to argue that some of his moves would have paid off given more time, but credit to the board for stabilizing the business at a level that would (almost) pay the rent. The current CEO as of mid-2015 is Marvin Ellison. Some of the company’s ideas — the ones Johnson didn’t eviscerate — were rooted in 1960s views of shopper behavior. Ellison has sought to modernize the approach that the company takes to its merchandising decisions, such as recognizing that men are capable to doing their own shopping.

The company, instead of taking no risks pre-Johnson or bold ones under his tenure, now takes calculated risks. They use a store near corporate headquarters to test out ideas, before rolling them out across the country, and they have a more proactive approach to merchandising and to fashion. The company is in a state of financial recovery right now — still risky, but doing better. This has to be credited to the current leadership (Wahba, 2016).

The current approach is more data-driven than in the past. The company had relied a lot on inertia, doing things the way that they had always been done. This was built into the culture. Johnson basically rejected that, and made dramatic changes too quickly, in what ended up being a shock to the company. Ellison’s approach has been calmer. The company has started to adopt best practices in the area of data analysis, in order to make better decisions. It tests ideas and gathers information about whether they work or not, before rollouts.

The moves have started to pay off. JC Penney’s management is more modern and data-driven, and making smarter decisions as a result. It lost a lot of ground during the Johnson era but has been fighting effectively to win customers back, and that has made a difference. The mix of outsider influence and internal talent has helped the company to modernize without losing sight of the existing loyal customers and staff. This approach has started to be successful, though it will take longer for JC Penney to fully realize the outcomes of its efforts.

The company’s management now focuses on modern supply chain practices, for example (Wahba, 2016). Supply chain is critical to a retailer — remember that fashion is one of the biggest risks that a retailer faces. So getting the risk clothes is important, and having a reverse supply chain to move unsold merchandise at a profit is another critical area that can be aided by data-drive analysis.

There is more attention paid to the individual customer, too. Data is used especially in the back end, but one of the more interesting outcomes of the data revolution is the granularity aspect, and the ability to drill down to fine details for targeting. JC Penney has embraced this, and in doing so has been able to build up relationships with its customers. Remember that loyalty is one of the biggest risk factors, because a store like JC Penney has to be the first place people think to buy something, or that sale will probably be lost.


Halkias, M. (2015). JC Penney CEO Marvin Ellison focused on building customer loyalty. Dallas Morning News. Retrieved January 26, 2017 from

JC Penney 2015 Form 10-K. Retrieved January 26, 2017 from

MSN Moneycentral (2017). JC Penney Retrieved January 26, 2017 from

Tichy, N. (2014) JC Penney and the terrible cost of hiring an outsider CEO. Fortune. Retrieved January 26, 2017 from

Wahba, P. (2016) The CEO who’s reinventing JC Penney. Fortune. Retrieved January 26, 2017 from

Get Professional Assignment Help Cheaply

Buy Custom Essay

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

  • Plagiarism free papers
  • Timely delivery
  • Any deadline
  • Skilled, Experienced Native English Writers
  • Subject-relevant academic writer
  • Adherence to paper instructions
  • Ability to tackle bulk assignments
  • Reasonable prices
  • 24/7 Customer Support
  • Get superb grades consistently

Online Academic Help With Different Subjects


Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.


Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!


While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.


Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.


In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.


Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.


We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!


We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.


Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

  • When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
  • We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

  • The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
  • We will have a different writer write the paper from scratch.
  • Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

smile and order essaysmile and order essay PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

order custom essay paper

Expert paper writers are just a few clicks away

Place an order in 3 easy steps. Takes less than 5 mins.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
Open chat
Need assignment help? You can contact our live agent via WhatsApp using +1 718 717 2861

Feel free to ask questions, clarifications, or discounts available when placing an order.