PESTEL Analysis of J.C Penny Essay

PESTEL Analysis of J.C Penny

A PESTEL analysis of J.C Penny indicates the external forces that affect the operations of this company.  PESTEL analysis is a framework or tool that marketers use to screen and analyze the external environment within which a company markets its products. The word PESTEL stands for Political, Economic, Social, Environmental and Legal factors or forces. This strategic tool gauges factors in the macro environment of a company. This makes decision making easier.

J.C Penney is a large home furnishing and apparel retailer whose goal is to fit the American diversity with unparalleled quality, style and value. With more than 1,020 stores, customers of this company discover a wide range of assortment of private, national as well as exclusive brands that fit different sizes, shapes, budgets and occasions.

Concrete PESTEL analysis of J.C Penny

J.C Penny PESTEL analysis indicates the general forces that exist outside this organization. These forces are capable of influencing the performance of this company and they must be analyzed to give it a better footing.

Political forces

The United States is a federal republic where the state and the government are headed by the president. There is the Judiciary and the Congress which share powers with a national government while sovereignty is shared between the federal government and the state government. The activities, such as the legislations passed or pushed by these political institutions can affect the operations of J.C Penny. As such, J.C Penny must be aware of the authority that different political institutions have in order to operate smoothly within the United States of America.

Economic forces

There are different economic factors which can affect the operations of J.C Penny. Initially, the resources that this organization implemented at various levels were determined by its life cycle. However, the available resources currently influence its planning operations. Planning entails determining the required inputs and the expected outputs for sustaining the competitive advantage of this company. Additionally, this company is affected by other economic factors such as economic growth rate and inflation which influence the purchasing power of consumers.

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Social forces

J.C Penny must evaluate factors that can affect its human resource in order to maintain its competitive advantage. Maintaining human capital at different cycles of an organization can be challenging. As such, J.C Penny must come up with strategies that will enable it to overcome human capital loss through employees’ turnover. Factors like economic recession and downsizing as witnessed at some point in the running of this company increase turnover and this company must know how to deal with them in order to operate smoothly.

Technological forces

There are external constraints that any technology-based firm will keep facing in terms of material availability and the required cost for the implementation of the technology. Today, more and more consumers are turning to online shopping. As such, J.C Penny must engage in online sales through e-commerce websites. It must also engage in online marketing in order to beat its competitors. The company must come up with a unique technology and brand it as well as decentralize technology products in order to benefit its stores.

Environmental forces

Consumers are becoming increasingly aware of environmental concerns and for J.C Penny to be competitive it must address these concerns during its operations. The company must engage in environmental friendly practices and observe ethical standards. Its aim to ensure environmental conservation must be reflected by its organizational values and mission.

Legal forces

Some of the legal forces that J.C Penny has to deal with include labor laws which stipulate the rights of employees. The company should also consider laws that regulate immigration because immigrant workers have always been a significant factor among the U.S employment issues.

What makes PESTEL analysis of J. C Penny Important?

A PESTEL analysis of this company is important because it identifies the external factors that influence its performance. With this knowledge, the management of J.C Penny will have a better footing when it comes to strategizing. This will enhance the overall performance of the company. Managers will come up with better and more effective strategies that will propel the company ahead.

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