Great Recession: JC Penney

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.

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.

There has been many ups and downs in the fashion industry and is always changing, being a store that offers that kind of merchandise you need to stay at the top of the game. Since J.C. Penney’s has opened its doors it has been through a great depression, a great recession, and many more ups and downs, and has still made it. Reason being they move with the economy not afraid to change and take the first step. They first open its doors as a fashionable store, and moved down the line to pretty much everything, some J.C. Penney’s have pharmacies,

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.).

J.C. Penney’s used the linking strategy of having thousands of seemingly unrelated web sites that would link to the J.C. Penney website. Most of those links had really descriptive word choice, meaning if you wanted to look up furniture, casual dresses, phone cases, etc. they would all be linked to J.C. Penney’s. It was almost like someone had arranged for all of those sites to go to J.C. Penney’s website, and would help them out even more by making them be in the top five websites that pop up on google searches. They are ranked so high because when people look something up that J.C. Penney supplies or even has something close to it, their name will pop up because they have all those keywords connecting to their

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.

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.