JC Penney Case

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).

The industry we have chosen is the department store-retail industry. Within this industry, we have chosen the department stores of JCPenney and Macy’s. We find this industry, as well as these two companies, interesting from a strategic perspective. JCPenney has recently undergone a massive strategic restructuring in regards to its pricing, brand offerings, and store layout, pushing it away from the typical department store strategy of discounts and coupons. Its new strategy has become much closer to Wal-Mart’s strategy of every day low prices. Macy’s, on the other hand, has restructured with a push from the economic

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.

Penney’s around for so long is their willingness to change and try different things. With technology being a huge things in today’s standards they needed to come up with different shopping methods for people who only shop online or may not be abler to get out as often as they once could. So what J.C. Penney’s did was they created an only shopping center, catalogs for people to get sent to their house, they are always doing the next best things to keep in competition.

Ex- Chief Executive Officer Ron Johnson appointment to reinvent the failing retail monster JCPenney’s was short lived. JCPenney’s having a great run as the pinnacle of shopping destinations for the Baby Boomer and the X-generations was now on the decline. Likewise, both the retailer Sears, and JCPenney have been slow to recognize the changing retail market and adjust to the “point and click” shopping habits of the internet savvy Y-generation millennials.

J.C. Penney has been challenged with the task of changing its strategy to once again be competitive. New chief executive officer, Ron Johnson, noticed shortly after taking his new position with J.C. Penney that the way the company was conducting business was not profitable. Even though the company advertised several sales and promotions, the amount of customer participation was still low (Mattioli, 2012). Of the customers that were actually shopping, only did so when prices had been cut drastically (Mattioli, 2012).

JC Penney in the early 2000s represented a “brick & mortar” retail powerhouse known for its large diverse selection and competed well with similar retailers such as Kmart and Sears. In 2011 JC Penney was exposed by The New York Times in an internet search scandal involving the tampering with rankings on search engine results. Yet, this was not the only shortcoming in the marketing of their stores. JC Penney had also been caught dishonestly pricing their merchandise so that their sales would appear more appealing. Since then JC Penney has undergone many important shifts in focus on how they would attempt to market their products. Now, in 2016 with their new CEO Marvin Ellison they have managed to rebound their sales closer to what they were and have bolstered their stock price for the time being. To understand what had been done to kindle this new fire four key areas should be looked at. These four components are: price, product, place, and promotion. The four P’s allow a segmented view of what changes have been made and how they have been affecting the consumer market.

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The "Fair and Square" repositioning method is a regard based proposal, where J.C. Penney is attempting to get progressively a motivating force through normal low expenses and modify the perspective of customers to view J.C.Penny as a consistent shopping learning versus a store that twists with game plans and headways. This issue J.C.Penny is running into is taken a toll isn't a way to deal with make regard, it is a procedure to get regard. An association framework that is based on esteem overlooks the regard influencing segments of the promoting to mix that genuinely make whole deal regard and achievement of the general method.

First, J.C. Penney reduced the prices of most of their merchandise by an average of 40% to be closer to the price range that the customers would be willing to pay (Kinicki & Williams, 2013). Previously, the large amount of promotions weren’t bringing in more customers to the stores, so Mr. Johnson lowered the amount

J.C. Penny is century old name in retailing, trying to reinvent itself by modernizing its plummeting departmental store business. Company’s chain of 1100 Stores based in US and Puerto Rico, were losing ground to Macy’s and Kohl’s its biggest competitors. Once one of the nation's top catalog operators, Penney has exited the catalog business and is expanding its e-commerce presence. The company has seen a continuous sales decline over the past five years. In fiscal 2014 (ended January), revenue fell 9% to $11.9 billion, versus $13 billion in fiscal 2013, due to a plunge in comparable-store sales. The company still felt the lingering sting related to an ill-fated strategy embarked on under the previous leadership of Ron Johnson (who was fired as CEO during 2013). The strategy -- included eliminating sales and instead offering everyday low prices -- didn't sit well with Penney customers, who increasingly have been shopping elsewhere. In the aftermath of the disastrous financial results, the company has been working to rebuild itself to its former glory.

Penney to create strategies that add value to those clients. Offering free shipping with no threshold limit will attract them to shop more, also the catalogs with the upcoming sales or new arrivals are some valuable perks for those customers. However this might not be enough to increase their share market again, therefore they need to create more appealing stores with comfort alternatives like coffee shops inside the store to make the shopping experience more pleasant. Also they will need a more aggressive online strategy to increase the sales through this channel. A good option could be exclusive access to the latest collections or brands to be display in the store later on for their core customers, with this alternative not only make customers feel appreciated but also give them the exclusive status everyone is looking

In 2011, Ron Johnson was appointed CEO of J.C. Penney. Johnson entered the position and began to change J.C. Penney 's strategy which ultimately led to an annual sales drop of six billion dollars. Johnson’s new strategy involved eliminating J.C. Penney 's discount culture and began to refashion stores as collections of boutiques and higher end brands. He launched this new strategy and design without any advanced testing, which is a crucial step for changes in department stores. Johnson also removed store discounts and coupons. These changes led to the loss of many long time loyal customers. That is, Johnson and his new strategy miserably failed. The changes led to the firing of 40,000 employees, the closing of dozens of retail stores, and forced the company to sell valuable assets in order to build up cash reserves. By 2013, Johnson was fired as CEO, prompting J.C. Penney’s new management to spend the last few years reversing Johnson 's strategy (fortune.com).

The problems that JC Penney is experiencing have been brewing for years. Before Ron Johnson took over and accelerated its decline JC Penney was having difficultly maintaining a profit. There is no denying that JC Penney is not the retail giant that it used to be. However, when looking at the sales and revenues of the company they still manage to sell billions of dollars worth of merchandise to consumers. Therefore, even though JC Penney’s customer base has been shrinking, the ones that are left still hold considerable buying power. JC Penney still has an opportunity to save what was started over a decade ago. In order to make it profitable it is necessary to take a look at what has been causing the massive losses in the first place and address