JCPENNEY Bailey Martindale, Balay Hartman, Mary Mandeville

JCP & the Missing Pieces

HISTORY O

F J.C.PENN

EYThe Beginning

• Founded in 1902 by James Cash Penney• Started as the Golden Rule dry-goods store in Wyoming• Company went public in 1927• J.C. Penney was known for conservative policies• Credit card introduced in 1958 against Penney’s wishes

Over the Years

•J.C. Penney expanded their merchandise to compete with competitors such as Sears•Mail order sales with the Penney Catalog•Expanded overseas and relocated its headquarters from New York to Dallas

J.C. Penney in the New Millennium

• Closed it’s international division in 2003 Downsized from 2,000 stores to 1,100

• Partnered with Sephora in 2006 Attempted to gain new clientele and appeal

to new target audience• Launched it’s American Living Brand in 2008

Attempted to breathe new life into the struggling company

JOHN

SON

’S STRATEGYTrouble

•The new concepts confused both customers and employees•In less than two years, the company’s stock dropped nearly 50 percent, 19,000 people lost their jobs and sales fell by more than 25 percent•Under CEO Ron Johnson, JC Penney tried to change its strategy in several ways, but perhaps the biggest change was to promotion policy. The company significantly cut back on the promotions that department store consumers have been accustomed to for decades, not just at JC Penney's stores but at the stores of its competitors.

Customer Complaints

Dissatisfied

Customer Service

Pricey

Store presence

Why Johnson Failed

•JC Penny operates in a competitive landscape that promotion-intensive and completely different than the heavily priced-controlled and limited distribution world of Apple.•Consumers are used to promotions in the department store world, even more so in the segment of the market that JCP operates in. These are price-sensitive, budget-constrained consumers who are willing and able to go to the store next door for better deals.•Not only did the new strategy take away a lot of "deals" that attract consumers to a store and make them feel like smart shoppers, the net price paid by consumers most likely increased because regular prices weren't reduced enough. The appeal of the redesigned JC Penney store is simply not strong enough to offset this. There is too much competition right around the corner.•Unless you have a very highly-differentiated and premium product, promotions are extremely important. Promotions offer both monetary and smart-shopper appeal.

REPORTS

Ron Johnson Standing in the Market

2013-2014

MARKET SU

MM

ARY ANALYSIS

Gears of Business

•Poor internal culture•Hierarchy•Lacking an efficient combination of decentralized/centralized structure

•Testy environment•High turnover•Negative environment due to employee cuts

•Lacking a good hiring standard

•Stocks & Revenue taken a dive

•Too many expenses•Lack of investment/investors•Not seen as promising

•Sales strategy changes have confused customers

•Decent products•Too pricey in some areas•Need more invested into research and development

Products/ Services

PerformanceProcess

People

SWOT

Adjust for Weaknesses, Utilize Strengths, Level Out Threats, Make the Most of Opportunities

Strengths

Long history

Well-known name

Competitive Prices

Weaknesses

Brand identity crisis

Lack of Corporate

Culture

Plummeting Sales

Opportunities

Potential for turnaround

Fresh Start

Credit Card

Threats

High end department

stores

Employee media correspondence

Bankruptcy/Debt

“We can’t solve problems by using the same kind of thinking we used when we created them” – Albert Einstein

Stra

tegyIneffectively

changed the store strategy. Cu

ltureCompletely

lacking a company culture.

Desig

nUnsuccessfully and unnecessarily revamped the look and design of the stores.

Stra

tegyIn order to stay

with competition, they need to offer promotions and restructure sales strategy.

Cultu

reDevelop a unified, well implemented company culture

Desig

nCreating a more suitable store layout.

Prob

lem

sSo

lutio

ns

INCONSISTENT BRANDING

STRATEGYPleasing the Customers

•Finding their identity Aligning themselves against the right competition

such as Kohl’s and Target, no Macy’s or high end department stores

Creating Consistent pricing strategies and branding Offer high quality style for an affordable price –

Trendy and affordable vs. high designer brands•Reintroducing frequent promotions and discounts

Highly competitive marketplace – offer sales, discounts and promotions in order to compete

Setting themselves apart from the competition

•Offering higher quality than competition such as Kohl’s and Target, while still offering competitive prices and promotions.•Through marketing, sales and promotions – Drive customer flow•Interactive social media

Getting input from customers and showing they listen and appreciate the opinion

Broadcast sales, promotions, etc. through Twitter and Facebook.

Have check-in discounts, survey discounts

Company Drivers/Marketplace Drivers

•Competitive pricing•High quality•Desirable Setting•Great Customer Service

CULTU

RECreating a Positive and Influential Culture

•Transparency•Integrating a n effective balance of top-down, bottom-up communication

Build a culture where the best ideas are built from the ground and filter up

Hire creative and hard working people Ensure employees feel empowered and open to

experimenting and sharing ideas•Develop a company culture statement •Incentives and rewards for excellent performance. •Offering social opportunities and civic involvement opportunities to further develop the culture•Return to business casual in stores and implement the “Golden Rule” principle•Reestablish the basic principle of serving the customers at the highest level

Find employees who want to serve the customers and are invested in making the customer experience a positive one

Executive/Corporate

•Figure out what is currently lacking in the company culture, where it stands, employees view on the culture

•Develop better hiring practices/guidelines Hire for the culture

Do they fit in, get along Do they add to the culture Can they work hard & play hard

•Realign the drive of the company and the values•Set the bar high•Strong and positive leadership develops a strong culture and attracts high quality individuals•Add creative’s to the executive team not just business professionals – create a holistic approach•Broadcast the new company culture once it has developed

DESIGNIn Store

•Revamp of store layout Brighter, livelier Eliminate the cluttered feel

•Revamp of storefront – make cohesive with rebranding•Test Stores

75-100 test stores before rolling out across the entire JCP

Payroll savings, employee incentives, promotions, merchandise, etc.

Marketing

•Need a revitalization of advertising and marketing Feels outdated Make it fresh and fun

•Customers compare/contrast to Target Advertising is not as lively, trendy, fun Doesn’t make them want to go into the store Is not appealing

JCP’s latest ads are headed in the right direction.

Old ads

CURREN

T STORE DESIGN

Clutter, Clutter and more Clutter Goal

CURRENT STORE PHOTOS

Currently, J.C. Penney stores are poorly lit. Not stocked with much merchandise and unorganized making it difficult for customers to shop.

GOAL STO

RE DESIGNStreamlined, Bright Lights, Organization

GOAL ADVERTISING EXAMPLES

LOGO IDEAS

OUR LOGO CHOICES

IN STO

RE SIGNAGE

IN STO

RE SIGNAN

GE

WRAP U

PThe Missing Pieces

Customers want a store that offers competitive prices and promotions. They want to feel they’ve got the biggest bang for their buck. By making it a pleasant experience with an inviting environment with exceptional customer service, it will set them apart from their competition and drive in customer flow.

Putting the missing pieces together

Conclusion

•Consistent pricing strategy Competitive pricing, promotions,

discounts

•Consistent design strategy Goal store design across the board New, fresh advertising

•Consistent Corporate Culture Revamp of culture Drive to continue to push culture

higher