JC Penney

JCPenney company again seems to be in the process of deciding what it wants to be when it grows up. It now has a new CEO, who is the old CEO, before the previous CEO.

There are fundamental cultural issues within the company, including how to address Associates, and what the appropriate dress code should be. Oh, and there is that little issue of identifying who the customer should be, i.e., teens or retired golfers.

Strategically, there is much to be done at JCPenney. The good news is, in our slow growth economy, this is a good time to work on those growth and development issues.

S.A. Romeo

Chief Strategist

Strategic Planning 2020, LLC

www.planning2020.com

An Apple a Year Keeps the Consumers Coming Back

An Apple a Year Keeps the Consumers Coming Back

Apple has conditioned its customers to expect a new release of the iPhone each summer. That is an aggressive product release schedule, even for a giant like Apple.

Most likely the product development team at Apple would like to see a more staggered and longer product release cycle in order to integrate new and more features and possibly complete more extensive testing before releasing product.

With the release of the new Verizon phone this spring, this may provide Apple with the opportunity to not release the latest version of the iPhone this summer, but wait until fall or even the holiday season.

My guess is that we will not see the release of a new iPhone this summer.

S.A. Romeo
The Strategy Expert

U.S. Gov't Used the Wrong Economic Strategy

U.S. Gov't Used the Wrong Economic Strategy

As I write this post I am in Thailand. I continue to read the economic news back in the states and receive daily briefings. The stock market is up and employee pay has increased to an all-time high. Yet, the general public still feels that the recession never ended. The unemployment rate remains around 9%, many have lost their homes to foreclosure and those who still have a home have found that the value had diminished considerably.

One could determine that the results are clear when you look at countries such as Thailand - the U.S. Government made strategic mistakes when dealing with The Great Recession.

I have said all along that the stimulus package, that has now helped contribute significantly to the U.S. debt, was strategically handled wrong. The money was given to large institutions to shore up their asset base or given to finically struggling companies to erase bad debt when instead the money should have been given to the people. If you want people to pay their subprime mortgage payments, don't give the money to the bank, give it to the people. Bailing out struggling banks and automobile manufacturers just brings their accounts back to zero, it does not grow the economy. In other words, most of the money spent was used to erase debt and pay old bills, not grow the economy to the next stage. That is why we are seeing minimal growth (0.2%) while Thailand is expected to see a 3.8% growth over the next cycle.

Thailand entered the recession after the U.S. and it too had to introduce a stimulus package. Only the Thai government gave the money to the people, who then went out and spent the money and stimulated the economy.

Thailand recently collected it's annual income taxes. The economy grew faster than expected and the government collected nearly 15% more tax revenues than it had projected. While U.S. Representatives are looking for ways to cut billions of dollars from its budget, the Thai government has money left over. One hundred twenty billion bahts are being used for a local beach clean-up and revitalization project.

Meanwhile, the U.S. government is still in debt, the jobless rate is still around 9% and businesses are still not hiring.

Lets see how the U.S. does on April 15 compared to Thailand.

S.A. Romeo
The Strategy Expert

Pattaya International Music Festival

Pattaya International Music Festival

This week I attended the Pattaya, Thailand International Music Festival. From a personal note, it was great to see so many local Thais and tourists sharing an event together. From a professional perspective, it was amazing to see their planning in action.

Pattaya has two main streets - one heading south along the beach and the other inland road heading north. The street heading south was closed for 3.5 km, meaning the usual busy traffic could be a nightmare. But the local authorities were able to accommodate the crowd with just half of it's major thoroughfares open.

The street that was closed had over 1500 vendors set up, in the street, allowing pedestrians to walk down the middle of this usually busy road with vendors on both sides.

I should add that the music festival was a three-day event and during the day, half of the vendors removed their stands allowing one lane of traffic. As darkness approached each day, the one-lane of cars was diverted and the vendors set up shop once again.

Now for the music. The festival included multiple concerts held simultaneously at multiple stages ( i think 4) set up along the 3.5 km road. So, as you walked along, there would be a stage set up in the road with hundreds, if not thousands, of people watching, singing and dancing. If you have never seen Thai dancing you are in for a treat. They have a fantastic time.

Imagine the planning and logistics involved in opening and closing streets twice a day, overseeing the traffic, organizing the multiple bands playing at multiple sites, providing security for the entire venue, designing contingency plans for the weather, getting the bands into the country, making hotel arrangements and even getting their equipment through the crowd. And then there are the logistics of clearing the stages and setting up for the next band. This is literally four concerts happening at the same time three times throughout the night.

The event (in it's 11th year) seemingly was nearly perfect. The weather cooperated, the traffic was manageable, the Thais danced and had a great time with minimal security required, the bands performed and while to the public it was a great time, knowing the amount of planning and preparation that is required for such an event, the organizers should be proud.

Rayong, Thailand

Rayong Thailand

I journeyed from Bangkok to Rayong yesterday. Rayong is an industrial city that is on the Gulf of Thailand and steadily growing.

Many find it surprising but 9 of the world's top 10 auto manufacturers now have plants in Rayong. It is referred to locally as "the Detroit of Southeast Asia". As the facilities continue to grow, employment has now risen to 25,000 people.

Look to Rayong to continue to grow as many look for I industrial port cities in the area.

S.A. Romeo
The Strategy Expert

Time to Layoff Some Employees

Time to Layoff Some Employees

Many companies in the United States have laid off some employees as part of their survival during The Great Recession. While the economy has not yet fully recovered (it may take a decade or longer to fully recover what has been lost) there are signs of a recovery in the works. That means it is time to conduct one more employee performance evaluation and lay off another 10% of your workforce.

Why would you want to layoff employees now, when the recovery is on the horizon?

Companies that plan strategically today and prepare for this next growth cycle are likely to be leaders within their areas for the next decade or longer.

The unemployment rate is high, meaning there are some great people out of work looking for jobs - your jobs. Many of these potential employees can be hired at a salary that is 20-30% less than you would have had to pay just 3 years ago. But in order to hire these talented individuals and build your "dream team" for the next growth cycle, you have to clean house one more time and get rid of some fine mediocre performers in order to make room for this new talent.

Feeling bad about laying off employees? These are the same employees who could give you a two week notice and go to the competition for a 20-30% increase in pay so don't feel too bad.

Not sure this model will work? Generation Electric Company does it every year. It conducts performance evaluations on all employees and dismisses the bottom 10% every year - and has for decades. Many believe this is one reason why GE remains one of the top 5 of the Fortune 500 companies.

It's not personal, it's just business.

S.A. Romeo
The Strategy Expert

Not in Time Manufacturing

Not in Time Manufacturing

For decades, Japan has been a leader in Just in Time manufacturing: the premise that a company can reduce inventory amounts because an order to a Japanese partner or supplier would deliver the product to you, just in time for it's use.

With the three disasters (thus far) that have hit Japan, the auto plants are shut down, electricity production is on a three-hour rolling blackout schedule and Sony has stopped production at six of it's northern plants.

Companies around the world who have depended upon Japan for it's Just in Time delivery schedule may have to revisit their strategic plan and move to plan B, or the contingency plan, as Japan will likely be using a Not in Time production timeline for the near-term foreseeable future.

S.A. Romeo
The Strategy Expert