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1st Post – Using the assigned case study, identify and discuss the challenges presented by the case..  Prioritize them by importance.

2nd Posts – Using the assigned case study, respond to at least 2 other students’ discussion thread and suggest which growth strategy should be followed and why.

Peer 1

The biggest mistake JC Penny made was hiring Ron Johnson as the CEO of the company despite his reputation and experience. During his 17-month employment with JC Penny, the company experienced disasters and long-term damage that would need to be repaired. Some of the issues that were presented were transforming current stores to incorporate multiple services as a “town square” idea. This transformation would lead to significant job cuts and the closing of one of three call centers.

JC Penny had a poor brand position where updating the logo was intended to target a younger audience to represent more affordable pricing, however, there was a backlash from existing customers who claimed that the new logo did not match the JC Penny image. With the multiple logo updates, it caused brand confusion with consumers and caused the JC Penny image to become more fractured. Even though the company changed its position to implement a lower price positioning, consumers still perceived the company as higher.

Lastly, JC Penny struggled internally with a significant change in company culture despite its historical drive to maintain a positive work environment. When Johnson was CEO, there were 19,000 employees let go and supervisors were instructed to color code employees that were to be let go. Additionally, there was no protocol or process within the company anymore and direction was constantly changing causing confusion. There was also a lack of transparency when the new management team was installed.

peer 2

By reading the case study on JCPenney, the company had a location-oriented strategy which the business model was structured to purchase locations in regions with high returns and differentiation from the current marketplace. JCPenney’s goal was to be “America’s Favorite Store.” However, the company saw a major decline in sales from the years 2011 to 2012 due to the following issues that were presented in the case study. First, the apparel and home goods market is highly competitive. For company’s to see higher profit margins they need to have a competitive advantage in the marketplace. Competitors like Kohl’s, Macy’s, and Sears were retailer stores that kept up with consumer demand and market trends to see an increase in their company’s profits. Secondly, JCPenney didn’t position their products in the marketplace very well. As we’ve seen in Capsim simulation, brand positioning is very important to see a profit. Their marketing campaign was geared towards market trends which were popular during that season, however, JCPenney didn’t promote their other products as much which led to the decline. Lastly, JCPenney needed to redefine their business model which led to over $5 billion in profit loss. This was caused due to their CEO Ron Johnson who was later fired due to his business plan that failed in the marketplace. JCPenney needed to restructure their business moving forward after their decline in sales from 2008-2012. The company also needed to issue an apology to their customers for their three-tiered pricing strategy. It was clear that amongst these issues, JCPenney needed to restructure their business model and gear their products to consumer demand in all apparel and store categories (mens, women’s, home goods, children’s apparel, family footwear, and fine jewelry.)

  
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