As humans we can only retain so much knowledge. To the CEOs and managers who are resistant to changes, JCP is a prime example of how overconfidence, bias, not looking both at the inside and outside view, not paying attention to competition, and not paying attention to what customers want, can lead to good decisions turning into bad outcomes. Companies like JCP should take their time to evaluate their choices and judgements to improve their decision making process. One reason for resistance might be that CEOs and managers are strong, smart business people who have experience, therefore their decisions are for the better of a company. They feel like they know what is best for their company’s success. However, experience does not mean you are …show more content…
Overconfidence in people like the CEO, plays a big role in JCP’s failure to succeed. Johnson set very ambitious goals due to his experience and previous successes with companies like Apple and Target. Unfortunately, Johnson was not flexible with his decisions. His thought process was that if it worked once with Apple and Target, it can work again with JCP. He did not process, identify red flags through his strategy and implementation, and lost the best opportunity to adjust before matters got …show more content…
Throughout the recession, Macy’s and Kohl’s decided to keep coupons and discounted rates, and constant sales, to keep customers wanting to shop. These stores also recognized the opportunity e-commerce would bring to their business and spent money on creating a better online shopping experience, while JCP ditched that idea and focused on improving the appearance of its physical stores. It also kept to EDLP while Macy’s and Sears had both tried that pricing strategy in the past and had failed because they realized that customers are more attracted to and will pay more attention to coupons and discounts. Additionally, Johnson did not include a crucial piece in his strategy. He mentioned retraining customers to shop, but he didn’t explain why this was so important or even necessary. They did not explain to customers “why” they no longer have to think of sales to believe they are getting a good deal, because the deal is already in JCP items without the
Wal-Mart was not always the superstore that it is today. In the late 1940’s, Sam Walton took up the ownership of a Ben Franklin’s store in Newport, Arkansas. Even during the time before Wal-Mart, Walton was all about keeping prices low. It is every business’s objective to find the right balance between the prices of an item to meet the demands of the consumer in order to maximize revenue. How could Walton still make a profit while keeping the prices low for the consumer? Even while still operating the Ben Franklin’s store, he would purchase products from wholesalers and minimally markup the price. Where most retailers would rely on markup prices to gain profit, Walton would rely on pure volume in order to make up for the low prices (Frank, 2006). This was a smart decision on his part because it makes sense that if a consumer can get the same product for a lower price then they will purchase the cheaper product. It was not until 1962 that Sam Walton opened the first Wal-Mart store, also in Arkan...
Conversely, we see Jim Taylor, a CEO, with obvious wealth, power and control (Smith, director, 2015). Jim’s position as CEO is understandably extremely stressful, but he is empowered to make decisions and has control and access to a substantial amount of resources. Like Corey, Jim also has high demands, however Jim has high control, which makes all the difference (Smith, director,
When Jim Kilts showed up at Gillette in 2001, the first outsider to run the Boston-based company in more than 70 years, he found a business with great brands losing market share. Its acquisitions of Duracell and Braun were not delivering. Sales and earnings were flat, the company had missed its earnings estimates for 15 straight quarters, the stock had plummeted, and Wall Street had lost patience. Yet two-thirds of the top managers were getting top ratings. People were being rewarded for effort; performance, under Mr. Kilts regime, became the new measure.
In 2014, JB Hi-Fi announced the retirement of their CEO Terry Smart. He had been with the company for more than 14 years. In an interview with Smart Company, Smart explained the process for hiring his successor. Smart (2014) stated that succession planning is not something that can be done overnight, it’s a long-term process and it’s part of the board’s role. When JB Hi-Fi promoted Richard Murray to CEO it was because of his extensive experience, knowledge, skills and contribution to the organisation over 11 years (Keating 2014). This example of JB Hi-Fi’s succession planning not only demonstrates their diligence in following their charter but also the emphasis placed on laying the right
Sears has created a “Financial Crisis” when hedge fund manager Edward Lampert took over control of the company. The mentality of investors of a CFO is an important viewpoint during crisis because it can help streamline process and reduce cost. Retail experience should be dominant the retail in order to feel the pulse of the consumer desires and to determine proper margin levels while eliminating inefficiencies in the organization. According to Marina Strauss of the Globe and Mail, “a sweeping change will be required to improve the retailer’s outlook”. She quoted the (CEO of Sears-Canada) Mr. McDonald saying in a memo that “Our store are too difficult to shop in. We have inconsistent execution…We do not offer the right product in the right market” (STRAUSS M., 2011).
Kohl’s also boasts a loyal customer base and strong brand equity. These strengths are critical to offset their weaknesses. Flaws include an imbalance on sales for men’s products and a lacking online presence. (Kohl's Corporation, n.d.) Another way that Kohl’s is actively counterbalancing their negatives is by capitalizing on opportunities. Kohl’s has found that their beauty sections are an immense source of opportunity. As a result, the company is expanding those departments in an effort to capture those sales that would otherwise go elsewhere. (Wahba, 2014) Finally, Kohl’s keeps the knowledge of their threats at the forefront of their decision-making. They understand that their coupon system can be abused and cause profit losses. They also recognize that price wars in their industry can also be very damaging. As a result, they are working towards more secure methods of offering savings and strategically making efforts to remain the leader for price setting. (Wahba,
The Johnson & Johnson Corporation has conducted business for over 60 years utilizing their credo in implementing their obligations to all of the stakeholders across the globe. Mr. Johnson attempted to share his philosophy, but it took him an additional 8 years to publicize his corporate credo and management to put it into action. “He believed that by putting the customer first the business would be well served, and it was” (Hartman et al., 2014, p. 165). The Johnson & Johnson’s reputation and credo was tested during the Tylenol crisis when a product was use...
What we conclude from our research that there’s no single organization free from facing complications and difficulties. Each and every organization face few or many strategic problems. Johnson & Johnson had a problem with one of their products, and they were smart in handling that problem to keep the company on the safe side without letting it effect it negatively. It is very important to act quickly to fix the problem before many consumers notice.
Poor organizational management, failure to innovate and adapt to the environment, and an outdated brand image have all contributed to Sears massive decline. By not setting a clear organizational strategy, executives of Sears strayed away from innovation, allowing for competitors to attract Sears loyal customers to their organization. In addition, the outdated brand image of Sears has failed to meet the ever changing customers of today’s society. Overall, there are many reasons that have led to the downfall of a once powerful retail giant.
JCPenney is a chain of American mid-range department stores that is based out of Texas that started over 100 years ago. JCPenny has been successful for most of its time up until the last three to four years. The company is trying relentlessly to overcome the lingering effects of the makeover that former CEO, Ron Johnson, had implemented in order for the company to take a new direction in hopes of increasing sales. The new CEO, Myron Ullman, has taken a close look into the markets demographic segmentation along with the income segmentation in order to attempt to return the retailer back to its old self, which is to appeal to middle-market customers. A couple issues of major concern for the company are the dissolving of Johnson’s Boutiques, the price of their products, and overall revenue.
3. Organizations must change in order to meet the needs of the changing workplace, environment, technology, and economy in order to be competitive. Change is good for an organization if it is done in a controlled and structured manner. Change is also risky because it is often met with resistance. For example, people may feel threatened and fear power loses and subsequently, resists the change. Change can also be ineffective if it is narrow and doesn’t concern itself with people and is over determined. In Enron’s case, the organization was constantly changing with no collective rhyme or reason.
Cantalupo, once the vice chairman of McDonalds was brought in to fix problems by reinstating core values. As the Organizational change management text explains, “His vision for the future was in a “back to basics” approach with organizational changes to refocus the organization on core values of quality and service” (Palmer, 2009). The core Principles brought back to the company would assist Jim Skinner in leading McDonalds to a successful future. A lesson that can be learned in this story is that sticking to the foundational concepts that make an organization a leader in the industry should never be lost in organizational
CEO Johnston also has plans to bolster the company’s leadership with the best minds available and also use motivational techniques to invigorate his employees. These ideas show the character of the CEO in enhancing productivity from his work force.
The Strategic Analysis will show some of the steps that have been taken to overcome some of the difficulties that Sears has had. The newest CEO, Arthur C. Martinez, has been a motivating leader for the company. He has implemented many changes that have increased sales and moved Sears back up to the top of the retail chain. These changes would include store remodeling, Internet strategies, differentiation, and human resource management.
No company that falls behind the competition is guilty of standing completely still. But sometimes our efforts fail because of the level of commitment to change.