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J. C. Penney Company Executive Summary

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According to SNHU (2016), Michael Porter describes cost leadership, differentiation, or focus on a target market that ranges from narrow to broad are the generic strategies a company can pursue. A company can add unique values and differentiate from its competitor, or lower its production cost and passes on the savings to its customers or focus different market depending on its core competence to its own advantages while planning and designing a strategy. The factors that differentiate one competitive strategy from another depends, if the company follows a competitive advantage linking to lower cost or targeting a broad or narrow market. Two types of competition lower cost and differentiation, two types of the target market broad and narrow provided total 4 competitive strategies and the 5th the best-cost provider strategy is a blend of all the four (Thompson, Peteraf, Gamble, and Strickland, 2016). …show more content…

C. Penney Company, Inc. is an apparel and home furnishing retailers, is dedicated with unparalleled style, quality and value and a broad assortment of national, private and exclusive brands to fit all shapes, sizes, occasions and budgets. J.C. Penney was losing money and considered Ron Johnson the company’s best hope for a successful turnaround with is a success with Target and Apple, but its store sales nosedived by 31.7% in the fourth quarter of 2012 versus the prior year. The strategy of high prices to allow for discounting to protect gross margin worked in the past for J. C. Penney Company and the customer expects the sale and the coupons. The risk is that any sticker shock price will keep the customer away. The store within store and services to add a new range of service and the product failed to attract new customers as well. Ending the fake price in its store strategy failed miserably to resound with J.C. Penney’s sales-hunting, coupon-loving core customers (Mohammed,

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Case Analysis: J. C. Penney Company, Inc. Founded by James Cash Penney in 1902, J. C. Penney Company, Inc. has grown into a major mid-tier retailer. Focusing on providing goods and services for middle-income families, Penney’s competes in several segments. Although men’s and women’s apparel accounts for nearly half of all sales, Penney’s has a diverse portfolio including cosmetics, hair salons, home furnishings and appliances (J. C. Penney Company, Inc., 2015). As one of the oldest retailers in America, Penney’s has recently struggled to maintain the loyalty of existing customers while attempting to attract new ones. Historical Background Penney’s faced a hyper-competitive environment following the recession of 2008.

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Normally JC Penney promotes from within and was successful with this for years. Subsequently, as profits continued to fail they decided to take a risk and hire from outside the organization. JC Penney was seeing a significant downfall in revenue for three years and knew in order to keep the company alive they needed to go in a new direction (Tichy, 2014). In 2011 Ron Johnson was appointed the new Chief Executive Officer (CEO).

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J. Crew have been expanding over the year. J. Crew remain sustainable in fashionable and has improved in the strategy. The company increased the retail stores and increased in distributing the products via E-commerce business sale in several other countries such as Japan, Canada, and England etc. J. Crew began to selling differentiate products like sweaters, suits, tees, swimwear rather than pants, blouses and jackets (A.J.Strickland, 2014). J. Crew holding multiple brands with different strategy.

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He was trying to make J.C.Penney completely different from it’s competitors like Macy 's, and walmart. I believe he was concentrating on weakness, and opportunities in the SWOT analysis. The weakness

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Differentiation Strategy: - It includes developing new products & services which satisfies customer needs, they offer much more values than their competitors. They differentiated the segment according to the customers. They provide multiple customer segments which includes moderately priced to premium priced customers for example: 1. Bulgaria resorts & hotels (The Ritz Carlton) - Target segment:-Luxury guest. 2.

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The company also uses broad differentiation as a supporting strategy. This secondary strategy involves developing the business and its products to make them distinct from competitors. McDonald’s applies the broad differentiation strategy in one of their product line. For example, McDonald’s introduce the McCafé products line, in this strategy McDonald enables to get customer during off peak hours. Vertical integration is also one of the strategic objective linked to McDonald’s cost-leadership strategy.

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This strategy rests on the choice of a narrow competitive scope within an industry. The focus strategy has two components. (a) In cost focus, a firm seeks a cost advantage in niche market, (b) In differentiation focus; a firm seeks differentiation in its target segment. Examples are car manufacturers like Aston Martin, Rolls Royce, and Bentley. These companies target a niche market and manufacture the cars according to the customers required specifications.

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