SWOT Discussion
Strengths: J.C. Penney will be offering complimentary services with the addition of the “Town Square” into all J.C. Penney stores. Already they have been offering free children's haircuts every Sunday which has drawn much customer interest to the company. The new unique layout of the stores that Ron Johnson is pushing through will make the stores easier to navigate through. Customers will also have a unique experience from any other store with the additions of “Town Squares” and “Main Streets” into all stores. J.C. Penney is an old company and so people are familiar it, which will give it a step up when advertising its new retailing approach. With consistent prices, J.C. Penney will not lose as much money on the
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All these other stores offer intense competition for J.C. Penney, especially as it is revamping its image.
Industry Analysis
J.C. Penney is trying to re-invent itself into the retail industry and put its name back at the front of everyone’s mind. People are trying to spend less money during this period of economic downturn and J.C. Penney is trying to market itself to make customers loyal to their brands in order to keep them coming back. J.C. Penney is trying to target people who will come back into the store based on the in-store brands that are available, and the consistent pricing such as middle income families. One tactic that has been used to get families into J.C. Penney is offering free children's haircuts. Parents will hopefully bring their kids in and then browse through the store afterward. Competition during and after the conversion to the new store layouts and pricing will be steep. Stores like Macy's, Kohls, and Target offer many similar products and styles to J.C Penney at similar prices. Other stores like Nordstrom are more expensive but have very loyal customers. J.C. Penney will need to attract customers that traditionally shop at other stores as well as bring back customers who quit shopping at J.C. Penney and went to other stores. Without these customers there will not be enough sales to make back the money spent on renovations, as well as on consistent pricing of merchandise.
Segmentation Analysis
Current Target Market:
Macy’s Inc. competes with other major players in the Department Store Retail Industry as well as with discounter, luxury stores, specialty stores, mail order and pure play internet retailers. Key competitors include Sears, J. C. Penny, Kohl’s, Nordstrom,
In the past, JCP had, on average, one price campaign every day. The stores were full of sale signs and retail rise was getting out of control. JCP partnered with numerous exclusive collaborations which was hoped to bring about an expansion for the firm. However, due to the economic slump, the oversaturation of the market, and an expected lack of quality in the goods from the consumer perspective, JCPenney’s success was degrading in contrast to its competitors. (Sloan, 2010).
J.C. Penney is a retail outlet that operates in many locations globally. It deals with product lines such as clothing, footwear, beauty products, electronics, and jewelry. There are several changes that have taken place in the macro environment that promises to increase the fortunes of the company. The advertisement in technology is one single important factor that has increased the performance of the business (Ali, 2007). The company has an elaborate website through which it uses to tap the online market. In fact, thirty percent of the company’s revenue comes from the website.
2) JC Penney's most immediate goal is to maintain its present customer base and to attract new clients. They can do so by introducing higher-scale brands to their stores in order to attract another category of customers, in other words, customers who are drawn to premium brands. Therefore, JC Penney's brand image will be enhanced; its reputation will be improved. Introducing premium products, and attracting customers who have higher purchasing power will bring in higher revenues to the company.
CEO Johnson’s time with JC Penney’s was short lived and only lasted 17 months. The three core processes of business that he ignored was People, Strategy, and Operations. From the people aspect, he missed several key details. Johnson just assumed that people thought JC Penney’s prices were too high, so he lowered them and quit having sells (Tuttle, 2013). He also drove customers that had been shopping there for years away. With too many changes happening at one time, loyal customers did not agree with the changes and started shopping elsewhere.
In January 2012, newly appointed CEO, Ron Johnson introduced a plan to rebrand the department store chain into a 21st century retail powerhouse. Launching of the new J. C. Penney brand identity was set to occur over four years and would include a new logo, a new in-store experience featuring new and transformed brands, and most importantly, it would change the way that the company priced merchandise. Unfortunately, J. C. Penney suffered a 25% sales decline in the first year and Johnson was fired after only 17 months.
When you look at Kohl’s and J.C. Penney one of the biggest differences that I like is that Kohl's has a customer service department inside the store. I like this for the reason that It i give you a place to do customer service. By making a place for your customer service you are giving them the opportunity to ask questions, make payments, and make returns. When comparing this to J.C. Penny that does
The intensity of rivalry and the threat of substitutes are strong components for J.C. Penney to consider as they continue to strive for increased revenue and market share. Their two primary competitors are Macy’s and Kohl’s, both of whom have fiercely competitive strategies to be strong retail operations. For instance, while Macy’s offers a multitude of promotional deals and is working hard to choose products based upon demographics and geographic segmentation, Kohl’s is attempting to reduce their inventory levels and improve their marketing strategies in order to become a stronger competitor in the department store segment of the retail industry. In order to compete with their competitors, J.C. Penney aims to focus on their previously successful promotions and home department segmentations by bringing in new reputable designers in order to attract a larger customer base. Due to the fact that the intensity of rivalry and threat of substitutes are both moderately strong in the retail department store industry, J.C. Penney ought to be diligent in their implementation of strategies in order to achieve success in the retail business.
Threats: The threat of JCPenney is that growing counterfeit goods market may keep customers away from going to J. C. Penney. Plus, due to fast swift of fashion trends and also pricing pressure, JCPenney may lose its pace with the market. Finally, JCPenney still needs to deal with the weak financial projection for FY2012.
Based on J.C.Penney’s current situation, and the above issues, we recommend the following strategic models.
JC Penney had to undergo and withstand several competitive issues to include changing of brand image, selling strategy and marketing strategy. JC Penney also had to account for Environmental Factors to include: a population that continued to age and also unemployment rates. JC Penney tried to influence customers by portraying an everlasting sale. No matter how hard JC Penney tried to market their products, if people didn’t
The retail industry is highly competitive, with few barriers to entry. Each Company competes with many other local, regional and national retailers for customers, associates, locations, merchandise, services and other important aspects of the Company’s business. Those competitors include other department stores, discounters, home furnishing stores, specialty retailers, wholesale clubs, direct-to-consumer businesses and other forms of retail commerce. Some competitors are larger than JCPenney, have greater financial resources available to them, and, as a result, may be able to devote greater resources to sourcing, promoting and selling their products.” There are many factors that characterize competition, including advertising, service,
JC Penney Co. Incorporated was founded in 1902 in Kemmerer, Wyoming by James Cash Penney and William Henry McManus. Today JC Penney offers a range of family apparel, jewelry, shoes, accessories, and home furnishing products through a chain of department stores and their company website. JC Penney, headquartered in Plano, TX, operates in the United States and Puerto Rico, with a total of 1,108 stores. JC Penney also offers its products through a catalog channel. Each channel serves the same type of customers and provides generally the same merchandise mix. JC Penney’s business is conducted through a single segment, but revenues are reported by product category. In addition to their product categories, the
JC Penney is not as large as some of its competitors, many of which have more substantial resources and are constantly attacking their market share. The company also faces threats from economic conditions, such as high unemployment and the recent recession. When consumers are under financial pressures can easily decide to shop elsewhere, such as Kohl’s, Target, and even the dreaded Walmart. Even the perception of better value can drive consumers elsewhere.
Wal-Mart, Sam's Club, Cost-Co, Target, Amazon.com, and etc are all targeting the same consumers and continually adding value and\or discounting prices.