Jcpenney Strategic Analysis Essay

There has been an overall loss in Market Share throughout departments stores. JCPenney is one department store in particular that has a very hard time dealing with this issue and has struggled to retain its market value. JCPenney CEO’s of the past and present have taken very different approaches to solving this problem and that will be discussed throughout this paper. We will start off by introducing you to former CEO, Mike Ullman who managed JCPenney before and after the recession as well as his presence after next CEO Ron Johnson was fired. We will walk through the problems that occurred after Johnson enforced his new turnaround strategies for JCPenney and how it cause disastrous results in sales and in the further decrease of market share. We will then focus on the current CEO, Marvin Ellison, and his plans for JC Penney and if his strategies can fix the overall problem JCPenney is facing.

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.

J.C. Penney’s catered to everyone’s needs during all times, having higher class things for cheap prices so people can afford their merchandise. Reaching from kids clothing to formal clothing but being a leader in price. They knew that things had to be done about price gouging in the economy people were finding it hard to keep jobs and people were in and out of jobs quite often knowing that they needed to help everyone their prices remained lower than the competitions.

In 2013, this department store has been celebrating being in business for 110 years. It also once lured its customers in with its famous discount pricing strategy and coupons. The retailer is J.C. Penney, a fixture at shopping malls across the country. In 2012, J.C. Penney rebranded itself by making the announcement that it wanted to become America 's favorite store by creating a specialty department store experience (JCP, 2013). Founder James Cash Penney began the company with a Golden Rule: treat others the way you want to be treated Fair and Square (JCP, n.d.).

JCPenny was founded in April 1902 by James Cash Penny. The objective of JC Pennys is simple, to provide products to meet each and everyone’s’ needs. The stores have switch to promoting their house brands more than promoting brands that a shopper can get elsewhere. By promoting their house brands, JCPennys feels like they can increase sales because a shopper would have to go to Pennys to get those brands. The company is endorsing what they refer to as the omnichannel. This is the cohesiveness between stores and online to increase the ease of shopping for the consumer. Now the financial objectives are as follows,” the company provided financial performance estimates for the 2017-2019 period, as follows: Compounded annual comparable sales growth anticipated to be 3.0 %; Gross margin is expected to improve 75-100 basis points; Additional SG&A expense leverage of 215-240 basis points; Net income is expected to be between $450-500M by 2019; Earnings per share of $1.40-1.55 by 2019.” (JCPenny, 2016) I know that the company has tried many times to create a new image because they are struggling to meet the demand of the modern shopper. These latest objectives I

J.C. Penney’s has the desire to become America’s favorite retail destination for apparel, accessories and home fashion. With approximately 1,108 operating stores throughout the United States and Puerto Rico, they serve half of America’s families every year. They employ nearly 156,000 associates and strive to be number one in customer service. Despite the recent economic downturn, JCP maintained a steady cash flow and has been able to keep their company running strong.

J.C. Penney has its fair share of strengths, weaknesses, opportunities, and threats. J.C. Penney has been struggling these past few years in order to sustain their business. As a result, they hired Ron Johnson as their CEO in 2012 in hopes of turning their business around. However, he caused more damage than good so J.C. Penney has been struggling to recover ever since. In order to fix Ron Johnson’s mistakes, they hired Mike Ullman to improve all aspects of their business through e-commerce and brick-and-mortar. J.C. Penney has a lot of obstacles to endure regarding their weaknesses and threats. However, their strengths and opportunities could possibly turn their business around and could land them success in the future.

Macy's was founded by Rowland Hussey Macy in 1858 in New York City. They change the way retailers market their product. They were the first to use the one-price system where all items were sold for one price. In November 1902, they became the "World Largest Store." As they continue to grow within the years many of Macy's immigrant workers, organize the Christmas Parade in 1924. They currently have the world's largest retail store with over 1.1 million square feet of land. Macy’s department store is rank #105 in the Forbes Fourtune 500 List.

J.C. Penny Company, which is one of the largest retail stores and catalog merchant in the United States. It became to rise because it offered all types of goods at “one fair price” and it brought fashionable goods to small faraway towns. This Company started back in 1902, in Hammerer ,Wyoming, simply as a one door room, by a man with the name of James Cash Penney. But back then the stores' name was Golden Rule Mercantile Company, and was owned by Callahan and Jonson. He then became partner with his employers (Callahan and Johnson) and opened a store in Kemmerer town. He opened a store that was cash only, which was really risky back then, since there were stores prior to that that had failed before. He took his chances by doing so and

As one of the major retailers in the United States, JCPenney has 1,104 department stores in 49 states and Puerto Rico as of February 2, 2013. The key success of its business is tremendously depending on the sales performance. However, the retail business is highly competitive, with low barriers to entry and low profit margin. Due to large sales plunge in 2012, the company is in financial trouble. The thorough analysis of JCPenney’s financial statements is vital to judge the future performance of its business.

Based on J.C.Penney’s current situation, and the above issues, we recommend the following strategic models.

In my opinion, as the retail industry continues to undergo changes so should JCP, after all change is the vehicle that have the capability to brings about improvements. In 2012, Johnson begin to reinvent the JCP department store by turning from the being a promotional department store into a specialty department store in the hope of setting themselves apart from their competitors. The results of these changes posted on the annual report indicates a vast decline within the net sales at JCP to include its profits, operating income, as well as employee turnover. JCP executive management believed these changes would provide greater opportunities for its consumers through cosmetic, electronics

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.

Penney Corporation (The Editors of Encyclopedia Britannica, 2018). From 1913 to 1924 the store was entitled the J.C. Penney Stores Company, until the corporation embraced its new name in 1968. In the early 2000’s the company managed approximately 1,000 stores within the U.S. and Puerto Rico, with its headquarters located in Plano, Texas. The company has been publicly traded on the New Stock Exchange since 1927. Similar to its competitors such as: Kohl’s, Wal-Mart, and Target, this department store chain is fundamentally focused on the retailing of family clothing, jewelry, cosmetics, and cookware. Conversely, in 2006 J.C. Penney revealed its new partnership with the cosmetic chain Sephora. “In 2008 it launched the American Living brand, a line of clothing, accessories, and home decor developed by the American fashion designer Ralph Lauren (The Editors of Encyclopedia Britannica, n.d.).” Now that we have learned a little bit about the background of J.C. Penney. Let us further broaden this report by becoming acquainted with one of this corporation’s former CEO’s and recount his pricing