Why Is Jcpenney Successful

J.C. Penney had a disappointing 2012 and CEO Ron Johnson was facing a difficult task of turning around one of America’s most historic and prominent retailers. Cash balances had declined steadily over the past three years and he must now find the best solution to increase funds in order for the company to continue its transformation that will improve the company’s long-term growth and profitability.
J.C. Penney was founded by a man named James Cash Penney in 1902 when he was only 26 years old. The initial $500 from his savings allowed him to open his first store in a one-room building in Kemmerer, Wyoming. His first clients were the mining and farming families in the area but his store became well known for the variety of merchandise and excellent

By 1929 more than 1,000 store locations had been opened and the company was listed on the New York Stock exchange. One week after the company went public an infamous period of time known as the Great Depression began in the United States. JCP were able to prosper during the volatile time with great inventory management and low prices for their customers. By 1951 sales had reached $1 billion due to eliminating the cash-only policy and introducing its first credit card. In 1968 sales exceeded $3 billion but the company started to have increased competition from small specialty stores, however the $1 billion catalog service and the launch of a women’s fashion program saw sales reach $11 billion by 1978. The early 1980s saw JCP begin a restructuring initiative with the goal of turning them into a national department store. $1 billion was spent in remodeling the stores and in 1983 it was announced that they would being phasing out the auto service, appliance, and hardware lines in favor of apparel, home furnishings, and leisure lines. Despite their efforts JCP was still perceived as a middle-ground retailer and consumers were favoring luxury merchants

They are an establish American department store offering private label products at reasonable prices. The introductions of premium brands like Sephora and Liz Claiborne offered their customers another variety of products that they could purchase. The revamping of the website for product purchase proved to be a key factor in the rise during 2010. Customer service has always been a keystone for JCP since its early days and something that will keep customers coming back. However, they do have weaknesses. The recent introduction of the “fair and square” pricing model has not proved successful. Another weakness of the company is a severe deterioration of their cash position. At the end of 2010 they boasted a cash position of $2.6 billion, but at the end of 2012 they only had $930 million.
JCP faces competition from a variety of retailers, being a “middle market” retailer they face competition from high-end retailers like Nordstrom, and bargain retailer’s like Kohls’. These companies steal sales from JCP by offering huge discounts during various times of the year that give customers the confidence that they are receiving the best deal possible. They also sale brand names that are recognizable and marketed independently by the brand manufacturers that customers prefer to purchase opposed to the privately labeled brands that JCP