Performance Evaluation Organizational Problem Decision Alternatives J.C. Penney Performance Evaluation Organizational Problem Decision Alternatives Good afternoon and thank you for joining. My name is Sheree and I will be leading the discussion on J.C. Penney’s performance, organizational problem, and some decision alternatives.

Performance Evaluation Sales growth -2010 net income $44 million 2 billion in cash and cash equivalents -2011net income $24 million 1.1 billion in cash and short term investments In 2010, for the 3rd quarter, J.C. Penney had a net income $44 million dollars, compared to $0.11 per share in last year’s third quarter. In addition, J.C. Penney had 2 billion in cash and cash equivalents. These results reflect the Company’s focus on growing top-line sales in stores and online, while managing costs and expenses in order to drive profitability. For 2011, 3rd quarter, J.C. Penney had a net income of $24 million excluding restructuring and management transition charges. 1.1 billion in cash and short term investments.

Performance Evaluation Sales growth 2012- Decline in sales Revamping pricing strategy In 2012, we revamped our pricing strategy. The new pricing strategy involved cutting prices across the board and doing away with the heavy discounts. Although, sales have dropped; J.C. Penney is looking working on a new strategy to bring customers back and increase sales growth.

Performance Evaluation Operating performance Customer satisfaction Store changes More showcasing The strongest merchandise results were from the men’s department and women’s accessories, geographically, the best performance came from the northeast region of the country. While business continues to be softer than anticipated, we are confident the transformation of J.C. Penney is on track.  J.C. Penney is also transforming its stores to create an environment that will keep customers coming back again and again. The stores will be changed monthly to create a sense of newness and excitement. Sales floors will now have wider aisles and will have more showcasing with bolder colors so merchandise will stand out.

Performance Evaluation Brand Recognition i.e. Worthington St. John’s Bay Arizona Jean Co. J.C. Penney is creating a unique and comprehensive retail experience, showcasing products from Martha Stewart. Customers will be able to purchase high quality home furnishings and merchandise that’s affordable. Also our private brands such as Worthington, Arizona Jean Co and Stafford will get a new makeover, bringing in other merchandise that will complement our unique assortment of brands. Our strongest merchandise sales come from men and women's department and from women accessories.

Performance Evaluation Sustainability Many companies incorporate sustainability into the balanced scorecard as a means of balancing a company’s short and long term goals. In 2005, a survey of 250 of the world’s largest companies showed that 52 percent prepared environmental and social responsibility reports compared to 35 percent in 2001 (Blocher, Stout, & Cokins, 2010). J.C. Penney measures its environmental success by continually reviewing ways to improve and reduce environmental effects on the environment. J.C. Penney also has a successful community involvement which measures the firms outreach to local communities.

Organizational Problems Elimination of sales promotions/discounts Transitional changes within J.C. Penney At present J.C. Penney doesn’t have the differentiated merchandise to drive consumers to its stores in the absence of promotions (Chernev, 2012). The customer base at present is promotion driven and may not be receptive to the elimination of sales promotions. In addition, J.C. Penney doesn’t have the cost structure to compete on prices compared with other retailers like Target and Walmart. As Ron Johnson and the leadership team continue to make changes for the next phase of J.C. Penney, the store continues to see a decline in sales, a decrease of 4.8 percent. This could be due to the exit from its catalog and catalog outlet businesses.

Decision Alternatives Pricing Strategy Employees Branding We are working to change the pricing strategy to keep our customers returning. Our store associates are the heartbeat of the transformation and we are realigning our organization to ensure that associates are able to perform and do their best work. J.C. Penney has rolled out different brands that are exclusive to J.C. Penney stores. With a complete brand overhaul, it is our hope that J.C. Penney will become America’s favorite store.

Decision Alternatives New Management Marketing to different sector Environmental Success We have a new management team that has a combination of new and existing leaders. J.C. Penney has partnered with Ellen DeGeneres to usher in a new era for the retailer. J.C. Penney is moving into a direction to put the fun in retail experience. J.C. Penney measures its environmental success by continually reviewing ways to improve and reduce environmental effects on the environment. J.C. Penney also has a successful community involvement which measures the firms outreach to local communities.

Conclusion The performance evaluation of a company represents an approach that requires careful analysis of its financial and non-financial status. J.C. Penney has key strengths through customer service, and their store brand merchandising. Although the company has experienced mixed reviews with the brand merchandising, it is our hope that consumers will see what we already envision. The company is primarily service driven and the company wants to ensure customer satisfactions which are typically done through employee surveys, customer complaints, etc. J.C. Penney will strive to maintain and keep loyal customers as well as gain new customers. J.C. Penney develops ways and different approaches to bringing new products that are in line with customer expectations for quality products at a reasonable price.

Questions Any questions? This concludes my presentation.

References Blocher, E., Stout, D., Cokins, G. (2010). Cost Management: A Strategic Emphasis. New York, NY: McGraw/Irwin. Chernev, A. (2012). Why everyday low pricing might not fit j.c. penney. Retrieved from http://mobile.businessweek. Com/articles/2012-05-17 J.C. Penney (n.d.) Retrieved from http://media.corporate- ir.net/media_files/IROL/70/70528/reports/JCP_2011IA R/HTML1/jc_penney-ar2011_0012- twopage_large.htm