JC Penney's Change Management: Strategies for Business Transformation

This report examines the need for change management within JC Penney, a department store chain facing challenges in store design, inventory management, and the absence of sales executives. The analysis highlights issues such as unorganized store layouts, inadequate inventory levels, and the lack of customer support, which have led to declining sales and market share. The proposed change focuses on prioritizing online sales over brick-and-mortar stores, leveraging e-commerce platforms and logistics providers to enhance customer experience and reduce operational costs. A force-field analysis identifies the forces for and against this change, including lower operational costs and improved customer experience versus potential employee resistance and technological barriers. Recommendations include creating alternative job positions for existing employees, providing training and development sessions, and fostering employee engagement to facilitate a smooth transition. The report suggests that these strategies can help JC Penney adapt to changing consumer preferences and improve its overall business performance, ensuring its sustainability in the competitive retail market. The report also provides a detailed overview of JC Penney's history, challenges, and proposed solutions to improve its business operations and customer experience.

Running head: CHANGE MANAGEMENT
CHANGE MANAGEMENT
Name of the student
Name of the university
Author note

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Introduction to JC Penney
JC Penney is a department store chain that was founded in the year 1902 and is
headquartered in Texas (Jcpenney.com, 2020). The organization holds store chains in around 865
locations of US and Puerto Rico (Jcpenney.com, 2020). It has been observed that most of the
stores of the organization are located in suburban shopping malls with the purpose of drawing
the attention of huge number of customers. The distinguished propositions made by the business
and its active involvement as an internet retailer since 1998 has improved its position in the
markets (Jcpenney.com, 2020). However, there have been specific challenges that are being
faced by the organization while positioning their propositions to the target customers which
result to their incapacitation of holding on to the market share or retaining the number of stores
in the markets. The report will also develop cognition on the restrictions that the organization
might encounter while undertaking the change and thereby suggest recommended activities for
overcoming the challenges.
Need for change in JC Penney
Absence of effective store design and set up
JC Penney’s challenge is specifically based on the lack of absence of presentable setup in
the stores. The stores are specifically racked up with the propositions without classifications and
most of the customers reported that there are no sales executive to support the queries of the
customers while making a buy of the propositions. It has been observed from the comments of
the customers that the propositions in the stores are disbanded and un-categorized, which is
capable of ruining the shopping experience of the customers. Moreover, a significant lower
amount of inventory is observed in the stores which affected the capability of the organization in

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adhering to the diverse needs of the consumers. According to Stouten, Rousseau and De Cremer
(2018), most of the customers prefers to shop in accordance with their own preferences and not
by the manner in which the departmental stores are designed or modelled. In this relation, the
absence of effective remodelling activities in the stores while adhering to the specific preferences
of the customers affected the capability of the organization in retaining the commitment of the
end users. However, the concerned organization, JC Penney lacks in providing their customers
with an absolute shopping experience which restricted the business in increasing their sales
revenue.
According to Van der Voet and Vermeeren (2017), the millennial population prefers
experience based shopping even though they undertake online purchases. The store design and
setup plays an important role in improving the shopping experience of the customers while
operating in accordance with the common goals of the venture. Moreover, Jayatilleke and Lai
(2018) opined that every retail organization takes the initiative of improving their store setup
with the purpose of guiding their customers in finding their preferences. In this relation, the
haphazard design of the stores and the absence of sales personnel on the floor affected the
concerned organization in retaining the commitment and loyalty of the customers. Moreover,
competitors like H&M provided the customers with an absolute store design and shopping
performance which naturally bought away the attention of the customers towards the
propositions (Altamony et al., 2016). Therefore, the organization must take the initiative of
remodeling the store design while classifying and assorting the commodities in accordance to the
preferences or demand of the customers.
Inventory management issues

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The lower levels of inventory affected the capability of the organization in adhering to
the specific demand of the consumers. It has been observed that the changing preferences of the
customers towards shopping are a common factor that is being utilized by the competing
organizations for drawing and retaining the attention of their customers. Gerbec (2017) stated
that the absence of specific inventory management related concerns might restrict an
organization in making the demanded the propositions available in accordance with the demand
forecasting. It might affect the business’ capability of retaining the trust and loyalty of the
customers. It has been observed that the absence of effective storing and orderly classification of
the inventories or the propositions affected the capability of the organization in adhering to the
changes in the demand of the customers (Quinn & Quinn, 2016). Therefore, the concerned
organization must devise strategies for improving their inventory management practices with the
purpose of dealing with the demand of the customers.
Absence of sales executives for guiding the customers
The sales personnel specifically guide the customers towards finding their most required
commodities from among the range of propositions in departmental stores. The assistance of the
sales executives or personnel enables an organization in improving the shopping experience of
their customers. Slater, Evans and Turner (2016) opined that the sales executives and personnel
enables an organization in improving their sales volume while assisting and supporting the
customers in making decisions for a buy of the propositions. In this connection, the absence of
adequate sales personnel or executives in the floor restricted the concerned business in increasing
their sales figure (Syahmi et al., 2019). It has been observed that the falling sales volume of the
organization minimized the annual earnings which forced the business in shutting down their
stores in different locations of the market, losing on their market share to competitors like H&M

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(Ahmed, Hussain & Baharom, 2016). Therefore, the concerned organization must take the
initiative of enforcing efficient sales personnel with the purpose of supporting their customers
while finding the required propositions and making a buy to improve their sales figures.
Description of the change: Prioritizing online sales over brick and mortar
The change
The organization might take the initiative of collaborating with an e-commerce platform
along with a logistics service provider for reaching out to their target customers.
Benefits of change
The organization has been facing three concerns that are affecting the capability of the
same in retaining the commitment and loyalty of the customers. Van der Voet, Kuipers and
Groeneveld (2016) stated that the online shopping platform holds an extreme scope of drawing
the attention of huge number of customers. The prioritization of the online selling over the
physical stores would allow the business in minimizing the cost of operations while improving
the quality of shopping experience in accordance with the expectations of the customers. The
organization has been primarily operating through the brick and mortar stores. However, the
incapability of the organization to remodel or reorganize the store design, involving huge costs,
resulted to diminished customer retention rates. Moreover, the incapability of the organization to
recruit large number of sales assistants or executives on the floor also contributed to the
degrading shopping experience among the customers. Therefore, the complete transition to
online or e-commerce sales would allow the organization in improving the shoppers’ experience.
Krivtsov et al. (2016) stated that the online selling requires lower amount of recurring
expenses which any organization would have to undertake in the brick and mortar stores. The

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organization has been encountering increased expenses due to the maintenance of the stores and
their remodelling activities on a recurring basis which surpassed their yearly earnings. Therefore,
the organization might consider moving towards the online platforms for selling while shutting
down some of the inconvenient brick and mortar stores with lower amount of sales. It would
allow the organization in minimizing the recurring costs. Moreover, the change would support
the organization in empowering the inventory management related operations through automated
calculation and forecasting of demand (Neves, Almeida & Velez, 2018). The automated
forecasts on demand would allow the organization in increasing the inventory management based
operations. The online application would allow the organization in tracking the demand on every
day basis which would allow the business in maintaining wider availability of the propositions
that are demanded for. Li et al. (2016) opined that the human errors in computing on demand
forecasts affects the inventory management activities of an organization. In this relation, the
automation of the inventory management through the application of automated calculations on
demand forecasts, segregating between the different offerings, would allow in maintaining
availability. The effective management of inventories would allow the organization in adhering
to the growing demand of the customers. The organization has been facing significant issues in
remodelling the store setup as it would increase the operational costs. Therefore, the change
process through, prioritization of online sales, would ensure the developments in the organization
in accordance with the common sustenance goals of the venture.

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Switching to
online sales
rather than brick
and mortar/
physical stores
CHANGE
Lower cost of operations with
inventory management
Greater sales prospect with
improved user experience
Resistance from employees on
the buyout process
Absence of technological
knowledge disrupting flow
Forces for change Forces against change
Force field analysis
Fig: Force-field analysis
(Source: Author)
The force-field analysis specifically identified the forces that would support the change in
the organization and the subtle forces that would challenge or resist the change while being
implemented in the business model. The force that would enable the change is the lower cost of
operations in online platforms for sale and the greater sales prospects with improved customer
experience. The implementation of the online selling activities would enable the organization in
negating the recurring costs that would be otherwise incurred by the organization through
remodelling of their store. Moreover, the greater sales prospects will be based on the increased
reach of the channels and the provisions of convenience shopping for the customers. According
to Adil (2016), the online selling platforms provide the customers with the privilege of choosing

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from among the different propositions that are offered by an organization and selecting their
needs from their convenient location and at leisure time. The provision of convenience shopping
for the customers would allow the venture in improving their overall experience of shopping
with the venture. On the other hand, the improved inventory management related operations
would allow the organization in increasing their viability of undertaking demand forecasts and
making their propositions available to the target customers. The online selling platforms provides
an automated inventory management service which would allow the organization in keeping
record of the daily sales and the inventories that would be required for supporting the demand in
future. Therefore, the switch of the organization to an online selling business platform from
physical stores would allow the business in minimizing gaps between the performances and
consumer expectations.
However, the changes might be opposed by the employees as the complete online
operations would curtail the jobs of the sales associates, the billing clerks and the other
employees from the departmentalized stores. The loss of jobs would affect the interests of the
employees and thereby resulting to resistance from the side of the same. According to Harmon
(2019) resistance from the employees, in time of organizational change, occurs specifically out
of fear of losing their jobs or cutting short of their existing remuneration. Organizational change
process might be affected through the lack of collaboration between the employees and the
management towards a change. Moreover, the lack of technological understanding of the
business might completely ruin the overall change process of the business. Therefore, the forces
against change might create challenges for the concerned organization while implementing the
modifications in the operational systems.

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Proposed recommendations
 Creating alternative job positions for the existing employees rather than laying off: The
creation of alternative job positions for the existing employees who have been working
for the organization in the departmental units would allow the venture in retaining the
loyalty and commitment of all the employees while regulating the flow of the operations.
The organization might consider undertaking a negotiation session with the employees
for making the same aware of the business goals and reassure them of their job security.
It would enable the organization in gaining over the support and engagement of the
workforce towards the change process.
 Inducing training and development sessions for the employees: Inducing training
session for the employees would allow the organization in improving the skills and
knowledge for handling different technologies while making online sales and customer
support. The improved skills of the employees would allow the organization in increasing
the rate of business operations while operating in accordance with the common goals.
Conclusion
Therefore, from the above analysis it might be stated that the concerned organization, JC
Penney encountered problems relating to the absence of effective inventory management and
poor setup of the physical stores affecting the customer experience. The report aimed at
proposing the organization with the solution of online retaining through collaboration with an e-
commerce network and effective logistics service provider. The change would allow the business
in increasing the sales volume with improved customer experience. However, the organization
might face challenges while implementing the change through resistance from the employees.

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Therefore, the research developed a list of recommended activities that might be considered by
the business for safe implementation of the change initiative.

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