Case Study: Jcpenney
Ron Johnson made some bad decisions that caused him to only last as the CEO of JCPenney for seventeen months (Kinicki & Williams, 2013). His bad decisions consisted of misreading what the shoppers wanted, no testing of ideas prior to execution, distancing himself from the essential consumers, misread the JCPenney brand (Tuttle, 2013).
First, he removed the use of coupons and most of the promotions, when he incorporated the “Fair and Square” pricing plan in his strategy (Tuttle, 2013). Since consumers enjoyed the thrill of bargain hunting, the removal of coupons caused JCPenney to lose several of their customers (Tuttle, 2013). Second, he didn’t test his ideas prior to execution (Tuttle, 2013). Mr. Johnson refused to test his “Fair and
Square” pricing plan in a limited trial period to determine if it was going to be successful (Tuttle, 2013). He stated “we didn’t test at Apple” (Tuttle, 2013, p. 1). Third, Mr. Johnson distanced JCPenney from their most loyal customers who felt that they lost their status as JCPenney’s main customers (Tuttle, 2013). Even though coupons and promotions returned, there were no evidence that these previous loyal customers returned to the chain (Tuttle, 2013). Finally, he misread the JCPenney brand (Tuttle, 2013). His vision and mindset of the “Town Square” turned out to be a failure, because most of the shoppers weren’t going to JCPenney to relax and hang out (Tuttle, 2013).
I have a few recommendations that may have helped him to become more successful. First, he needs to listen to his customers (Eller, 2013). This can be accomplished by having his customers complete surveys from either social media or on their sale receipts. Second, he needs to test all of his ideas before they are fully implemented (Eller, 2013). The elimination of coupons and the creation of the “store within a store” idea should have been tested in about 5% of the retail stores in a variety of different locations within a short timeframe to determine if these ideas would have worked (Eller, 2013). Third, “watch things carefully once a new plan is put into effect” (Eller, 2013, p. 29). This basically means that the CEO and the board of trustees don’t always know the shopping habit of the customer, and they need to always be ready to readjust their plan (Eller, 2013).
First, he removed the use of coupons and most of the promotions, when he incorporated the “Fair and Square” pricing plan in his strategy (Tuttle, 2013). Since consumers enjoyed the thrill of bargain hunting, the removal of coupons caused JCPenney to lose several of their customers (Tuttle, 2013). Second, he didn’t test his ideas prior to execution (Tuttle, 2013). Mr. Johnson refused to test his “Fair and
Square” pricing plan in a limited trial period to determine if it was going to be successful (Tuttle, 2013). He stated “we didn’t test at Apple” (Tuttle, 2013, p. 1). Third, Mr. Johnson distanced JCPenney from their most loyal customers who felt that they lost their status as JCPenney’s main customers (Tuttle, 2013). Even though coupons and promotions returned, there were no evidence that these previous loyal customers returned to the chain (Tuttle, 2013). Finally, he misread the JCPenney brand (Tuttle, 2013). His vision and mindset of the “Town Square” turned out to be a failure, because most of the shoppers weren’t going to JCPenney to relax and hang out (Tuttle, 2013).
I have a few recommendations that may have helped him to become more successful. First, he needs to listen to his customers (Eller, 2013). This can be accomplished by having his customers complete surveys from either social media or on their sale receipts. Second, he needs to test all of his ideas before they are fully implemented (Eller, 2013). The elimination of coupons and the creation of the “store within a store” idea should have been tested in about 5% of the retail stores in a variety of different locations within a short timeframe to determine if these ideas would have worked (Eller, 2013). Third, “watch things carefully once a new plan is put into effect” (Eller, 2013, p. 29). This basically means that the CEO and the board of trustees don’t always know the shopping habit of the customer, and they need to always be ready to readjust their plan (Eller, 2013).