JCPENNEY
J.C. Penney Analysis
J.C. Penney Corporation is one of the oldest, most renowned retail companies in the United States. Over time, it has become a department store giant and a symbol of American capitalism. Along with its successes, the company has experienced some lows with most struggles occurring during this last decade. The landscape of the retail industry is undergoing a massive transformation, and other players have been reacting to these changes in a more efficient and profitable manner. J.C. Penney has attempted to keep up with these changes in the retail environment, but has failed thus far. The company has been plagued with multiple senior management changes and initiatives that have greatly misaligned its strategic decisions with its traditional competitive advantages. Following a brief company history and analysis of the current retail industry, an exploration of J.C. Penney’s recent failings is conducted. Finally, recommendations are offered to assist the company in a major turnaround.
History, Business Model, and Profitability
James Cash Penney, at the age of 26, opened his first retail store, under the name “The Golden Rule”, in 1902 in Kemmerer, Wyoming. After initial success, the company experienced significant growth and expanded rapidly over the years and survived the Great Depression. Today, there are approximately 1100 J.C. Penney stores throughout the United States as well as in Puerto Rico, Mexico, and Chile. J.C. Penney’s business model was to offer high-quality, low-cost products to customers for their everyday needs. It provided sales discounts and was very good at adapting to changing customer habits as the years progressed. The company experienced a rapid growth and expansion from the 1920’s to 1950’s. The revenues continued to grow even during the depression years and right before its 50th anniversary, the sales were at $1 billion. During the next two decades, the company continued to grow as it entered the
J.C. Penney Corporation is one of the oldest, most renowned retail companies in the United States. Over time, it has become a department store giant and a symbol of American capitalism. Along with its successes, the company has experienced some lows with most struggles occurring during this last decade. The landscape of the retail industry is undergoing a massive transformation, and other players have been reacting to these changes in a more efficient and profitable manner. J.C. Penney has attempted to keep up with these changes in the retail environment, but has failed thus far. The company has been plagued with multiple senior management changes and initiatives that have greatly misaligned its strategic decisions with its traditional competitive advantages. Following a brief company history and analysis of the current retail industry, an exploration of J.C. Penney’s recent failings is conducted. Finally, recommendations are offered to assist the company in a major turnaround.
History, Business Model, and Profitability
James Cash Penney, at the age of 26, opened his first retail store, under the name “The Golden Rule”, in 1902 in Kemmerer, Wyoming. After initial success, the company experienced significant growth and expanded rapidly over the years and survived the Great Depression. Today, there are approximately 1100 J.C. Penney stores throughout the United States as well as in Puerto Rico, Mexico, and Chile. J.C. Penney’s business model was to offer high-quality, low-cost products to customers for their everyday needs. It provided sales discounts and was very good at adapting to changing customer habits as the years progressed. The company experienced a rapid growth and expansion from the 1920’s to 1950’s. The revenues continued to grow even during the depression years and right before its 50th anniversary, the sales were at $1 billion. During the next two decades, the company continued to grow as it entered the
References: 1. http://en.wikipedia.org/wiki/Department_store 2. http://www.fool.com/investing/general/2014/04/16/does-jc-penney-have-a-competitive-advantage.aspx 3. http://smartadvantage.com/blog/3-reasons-why-j-c-penney-is-wrong-to-compete-on-price 4. http://www.fool.com/investing/general/2014/03/20/3-charts-that-explain-jc-penneys-problems.aspx 5. Firm Resources and Sustained Competitive Advantage. Jay Barney. Journal of Management. 1991 17: 99 DOI: 10.1177/014920639101700108. 6. Competitive Advantage: Creating and Sustaining Superior Performance. Michael E. Porter. The Free Press. 1985. 7. http://www.businessinsider.com/ron-johnson-and-james-cash-penney-2013-2 8. http://www.fundinguniverse.com/company-histories/j-c-penney-company-inc-history/ 9. http://www.businessinsider.com/inside-J.C. Penney-2013-2#ixzz3T62t5n88 10. Ofek, E., & Avery, J. (2013). J.C. Penney’s “Fair and Square” Pricing Strategy. HBS No. 9-513-036. Boston, MA: Harvard Business School Publishing.