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J. C Penny Company

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Project name: Fair and square Sponsor: J. C. Penny Company Inc Cost: Lost $1B Deadline: Nov 2011 – May 2013 Vendor: Ron Johnson J. C. Penny Company Inc, the national level department store in the USA was suffering from severe financial downturn till the year 2010. The sales were dropping and it was high time for J. C. Penny to change their strategy of doing business. They realized that they needed a new vision and leadership to flourish their business. Hence, to tackle the financial slump, J. C. Penny appointed Ron Johnson as their new CEO to uplift sales. Ron Johnson was the Apple Executive who was responsible for the development of Apple stores, which was indeed a success. J. C. Penny customers were highly dependent on the coupons and sales and very well knew that the product would go on sale someday or the other. Although, with this strategy, the store was not making much of the profit. Hence, Ron Johnson decided to adopt a new strategy where coupons and sales were replaced by price points and color-coded price tags. “Every Day” prices became the basic price that remained static now that coupons and discounting was discontinued, “Monthly Value” prices replaced the weekly sales and “Best Price” were used on the first and third Fridays of each month in an attempt to match up with people’s paydays[1]. In addition, the old practice of using prices that ended in a 9 or 7 cents to indicate the type of sale was dropped. Instead all prices (no matter the type) ended with a zero[1]. …show more content…

Customers often got confused with new pricing strategy and were highly disappointed. Hence the end result was, revenues for the 2012 year dropped by a staggering 28%, a net loss of $1B mounted up and same store sales dropped by 32%[1]. Moreover, the company fired 40,000 employees[2]. This led to the closing of many stores. Due to the unsuccessful strategic planning, Ron Johnson had to

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