J.C. Penney is a well-established brick and mortar department store, operating more than 1,000 retail stores is malls across the United States and Canada. In June 2011, department store mogul J.C. Penney (JCP) announced that it was making a change at the CEO position. The current leader of Penney, Mike Ullman, was relieved of duties and replaced by Apple Corporation’s highly successful retail store chain visionary Ron Johnson. Johnson planned to revive Penney from an antiquated retail relic into a fashion-forward, modern brand, geared toward the younger generation. However, the strategy faltered early when Johnson decided that the retailer would discontinue coupons and sales in exchange for a one singular low-price approach (Strauss & Malcolm, …show more content…
During this time, Penney recorded a net loss of over $1 billion causing the stock of the company to fall to $18 per share, nearly half of its value the year prior. The recommendation from this point of the venture would be to attempt to reconnect with is original client base. First, Johnson should reconnect with the middle-class house wives that predominantly shopped the store. These women were the core base of customers looking for the ever-elusive bargain. Even if Johnson stayed with the singular low-price strategy that he was planning to use, some sort of sale or clearance-based sales promotion (comparable to the company’s initial pricing strategy) would have kept the customer base engaged and active (Denning, 2013). Next, to identify any potential weaknesses and threats to the strategy, Johns could have used the customers as a test model for the planning and development of his strategy. Customer testing would have identified that the current client base was not ready to accept the new pricing strategy. Furthermore, the customer testing would have also shown that the radical change in store design (mini boutiques) would have very little chance of success, thus the loss in revenues to accomplish the renovations would not have outweighed the gains of capturing another demographic of customers (the younger generation). Additionally, the failed …show more content…
Once the strategy began to fail, the company was already committed over its financial head. Without having a turnaround point, JCP was forced to rehire the previous CEO and attempt to rebuild its previous status of leading retailer. Going back to exactly what it was doing before the transition was not a viable option due to the amount of time that has lapsed since the change. To be more specific, while a similar approach to gaining back its original customer base should be the focus, JCP now must face the changes over the last five years and look forward to the next five years. Most notably, the competition with Macys, Kohls, and other retailers has now transitioned from a physical brick and mortar, get the customer into the store attitude, to a strategy that must compete with the online shopping experience (Mourdoukoutas, 2017). Nowadays companies like Amazon are now pulling customers away from brick and mortar stores through competitive pricing and most importantly, free shipping. To be competitive on all fronts (online and in stores), the new marketing strategy must use a combination of both strategies used in the past. First, JCP can regain its core customer base by going back to its original plan of marking up the product and then slashing the prices using coupons, sales, and clearances, giving the customer what it always enjoyed about JCP, the thrill of
According to Joe Skorupa, in his article JC Penney 's Turnaround Is Years Away, “Johnson’s time frame for the mini-mall concept to reach maturity in every JC Penney store was 2015. The mini-mall concept was to turn JC Penney into a small-scale mall. Ron Johnson wanted to separate each brand into small shops with in JC Penney. There was also a coffee shop with iPads and games for the family incorporated in areas of the store. Imagine a much smaller mall inside JC Penney stores. He was clear in his report to analysts that it will take the time to see results because the goal is not to improve JC Penney but to transform it. “Due to these changes JC Penney 's nearest debt maturity was on October 2015 when its $200 million 6.875% medium-term notes mature.” (Halkias, 2014). A great wat to explain will be with the product life cycle (PLC) “the course of a products sales and profits over its lifetime. The PLC has five distinct stages, number one is product development this is when the company finds and develops a new product idea.”(Armstrong & Kotler, 2013, p. 242). At this stage the product sales are zero and the company’s investment costs mount. Second is introduction, the period of slow sales growth as the product is introduced in the market. Profits are still nonexistent in this stage. Number three is the
Footlocker’s marketing plan entails selecting the target market, integrating the best marketing tactic to reach as many customers as possible, and customer retention initiatives. Essentially, this customer-driven marketing blueprint is classified as the marketing concept, which does not rely heavily on promotions to procure sales. Instead, the company learns to pinpoint what the customer wants before he or she does, to accommodate existing and future needs. Moreover, within the past five years, a new store entitled House of Hoops has made its debut in the same mall as Footlocker, which has caused the veteran shoe store to experience a decline in sales. This suggests that Footlocker may need to modify its sales strategy to help the company attract more customers to the store. “House of Hoops has a variety of shoes, and a large store front,” stated the interviewee, “customers are drawn to the store because it is new and possesses a
Target moved away from introducing new products and selling products that made them unique. Target’s offerings became more commonplace, offering more items like food and other consumer staples. The once famous marketing strategy Target used to lure in customer looking to spend $20 on the basics and leaving with $100 in impulse purchases was put on hold. Target’s senior leadership team is strong. So strong they felt comfortable complaining about his predecessor to the board of directors, and issuing an ultimatum: Gregg Steinhafe leaves, or we
Kohl’s also boasts a loyal customer base and strong brand equity. These strengths are critical to offset their weaknesses. Flaws include an imbalance on sales for men’s products and a lacking online presence. (Kohl's Corporation, n.d.) Another way that Kohl’s is actively counterbalancing their negatives is by capitalizing on opportunities. Kohl’s has found that their beauty sections are an immense source of opportunity. As a result, the company is expanding those departments in an effort to capture those sales that would otherwise go elsewhere. (Wahba, 2014) Finally, Kohl’s keeps the knowledge of their threats at the forefront of their decision-making. They understand that their coupon system can be abused and cause profit losses. They also recognize that price wars in their industry can also be very damaging. As a result, they are working towards more secure methods of offering savings and strategically making efforts to remain the leader for price setting. (Wahba,
Technology does affect how JC Penney and other retail stores do their business. For example, with the new invention of cellphones, now managers must find ways to prevent their employees from using their devices while they are working. Using technology effectively can increase profits and revenues instead of harming the company. All of the companies must adapt to technology to increase and improve their customer service, speed the transactions, and effectively compete against other online stores. The internet allows customers to buy and search things online. JC Penney must have their company connected with the internet to attract more customers. Social media allows JC Penney to promote their services and products, stay involved with the community,
Penney was doomed to fail. Johnson came into a new company with a set of ideal all his own and began to implement. He ignored the core customer base that J.C. Penney established. These customers may not have produced huge profits but they were keeping the company afloat throughout the years. The consumers at J.C. Penney were mostly middle class working families accustomed to sales. Taking away the coupons was met with large amounts of opposition that the company was not ready for. Best Price Friday’s was a good idea, but did not take into account busy families that normally shop on Saturday. Consumers retaliated by shopping at other stores and online causing even more loss in profits for J.C. Penney. Johnson simply did not take into account the long term impact his decision would have on the
My company of choice for this report is Macy 's. 'The Magic of Macy 's ', as the company advertises it, has inspired me to shop there, take advantage of their incomparable discounts and great online shopping experience. Macy 's, Inc. is one of the largest department store chains in the United States of America. Macy 's manages stores under the Macy 's and Bloomingdale 's brands. I enjoy shopping at both of the company 's store brands, Macy 's and Bloomingdales. Bloomingdales provides a more personalized experience
While J. Crew started out as a small door to door sales company, they quickly expanded in to catalog sales in the 1980’s. Their move into catalogs was a good move at the right time and led to increased sales and helped develop the brand into what it is today. J. Crew developed their brand into a product that younger generations found
Some core competencies that must be exploited are: Brand Kmart is an existing well-known and trusted national brand in USA Kmart has private label and designer clothing that is well endorsed Infrastructure Kmart has a large number of well-located, low-cost, leased stores in urban far away from competitors through out the country ( Appendix B ). Staffing Confidence by the market in Kmart is created by the achievements of its staff and management. With the turn-around strategy in place, new blood has been put into the top management structures. In any renewal there will be retrenchment as unprofitable stores are closed. This can be used as an opportunity to retain and move high performing staff to where they are needed and to get rid of non-performing staff. Anderson the chairperson of Kmart is well supported by Wall Street and the board of Directors. These new staff members enter the company with needed skills to address problems in certain areas that previously were poorly managed such as inventory control and merchandising. Store locations, layout and Performance Stores conveniently located away from competitors like Wal-mart and Target therefore less to compete for customers face-to-face. There are 250 non-performing stores who have already been identified as being more cost effective to close than continue with running costs. Expertise exists in-house for the planning of store layout and appearance to meet different customer segments. This concentration of effort will enable focus on key areas Technology Kmart has already invested in good retailing systems. The system can be use to control inventory, supplier payments, track customer buying and monitor income versus profit margins across all stores. Research and Development The planning department is well established and in cross-functional to provide various perspective. The planning department to ensure that strategies at all levels are executed can further use the access to past data and knowledge of changes in buying patterns. Financial Backing JP Morgan Chase has agreed to support Kmart to avert the current threat of closure due to bankruptcy.
In 2002, CEO of Levi Strauss, Phil Marineau was faced with a tough decision: whether he should sell product at Wal-Mart. In the last five years, Levi-Strauss had lost sales and had to close US plants to move production to cheaper offshore areas. Levi's really needed to revive the brand image to gain back some lost sales and was using marketing to create new advertisements and product placement to broaden their target market. Levi's had tough competition on every level of the price-point spectrum, whether it be high end retailers like Diesel or Calvin Klein, middle vertically integrated retailers like Gap or American Eagles, and on the bottom, private-label brands like Wal-Mart and Target.
A1: Dollar General's main business strategy is to focus on being the leading distributors of consumable basics, with 30% of the merchandise at $1.00 or less. Dollar General believes in maintaining an assortment of consumable merchandise and making shopping for everyday items hassle free and simplistic.
How does managerial planning for Project Impact take place at different levels within the organization?
Another problem was that Kmart did not correctly anticipate customer needs. For instance, let's say that Kmart buys a new style of shirt and stocks it in pink, yellow, green and blue. Further, let's say that the blue shirts sell out immediately; the store is left with inventory of the three other colors. Yet Kmart doesn't reorder the blue ones because 75 percent of its inventory is still unsold – it's still got plenty of that style of shirt to sell. Wal-Mart, meanwhile, would order a new shipment of blue shirts. Their model takes the customer into account, not the inventory – Wal-Mart understands that it's the color the customers want, not the style (in this case, anyway).
Poor organizational management, failure to innovate and adapt to the environment, and an outdated brand image have all contributed to Sears massive decline. By not setting a clear organizational strategy, executives of Sears strayed away from innovation, allowing for competitors to attract Sears loyal customers to their organization. In addition, the outdated brand image of Sears has failed to meet the ever changing customers of today’s society. Overall, there are many reasons that have led to the downfall of a once powerful retail giant.
JCPenney is a chain of American mid-range department stores that is based out of Texas that started over 100 years ago. JCPenny has been successful for most of its time up until the last three to four years. The company is trying relentlessly to overcome the lingering effects of the makeover that former CEO, Ron Johnson, had implemented in order for the company to take a new direction in hopes of increasing sales. The new CEO, Myron Ullman, has taken a close look into the markets demographic segmentation along with the income segmentation in order to attempt to return the retailer back to its old self, which is to appeal to middle-market customers. A couple issues of major concern for the company are the dissolving of Johnson’s Boutiques, the price of their products, and overall revenue.