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How Jcpenney Turned Into A Blue Ocean

956 Words4 Pages

A Mini Case Analysis: How JCPenney Sailed into a Red Ocean Strategic Management: MGT 4199 Heather Hirtle JCPenney was one of the top leading department stores in the United States before the surge of online shopping, but what really led to their demise? In a little bit over a decade, JCPenney’s market valuation went from $18 billion to $269 million, not due to the rise in popularity of online shopping, but because they implemented a bad business strategy (Rathaermel, 489). Executive CEO Ron Johnson was appointed in 2011 to reposition JCPenney’s current cost-leadership strategy to a more efficient one. Johnson rapidly changed positions from a cost-leadership strategy to a blue ocean strategy, which is a mixture of cost-leadership and differentiation strategies. Johnson’s new strategy was aimed towards improving customer experience and providing more exclusive merchandise through in-store boutiques, while also doing away with their mailing coupons and clearance rack (Rathaermel, 489). An executive posed the question to Johnson of having test stores to implement these changes …show more content…

While Johnson aimed for a blue ocean strategy, he failed to maintain the inherent trade-offs of the two very different strategies. In ridding all stores of their discounted clearance racks and mailing coupons, the cost-leadership strategy suffers as almost all their once-loved affordable clothing was wiped out and replaced with the exclusive in-store boutique merchandise. This new exclusive merchandise and plan to increase value innovation through enhanced customer service ultimately failed as well as it did not hold enough value to JCPenney’s consumers. In 2018, JCPenney appointed Jill Soltau as CEO and her new business strategy for the firm is still

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