jcpenney pp 2
TRANSCRIPT
Industry & Background
• U.S. retail mid-range price department store; brick and mortar
• First store created in 1902 by James Cash Penney
• Started in Kemmerer, Wyoming
● Political: Minimum wage
● Economic: Consumer discretionary spending Unemployment rate
● Social: Income demographic Age demographic Gender demographic
● Technological: Online shopping Online contests/coupons
● Environmental: Green Dyes and fabrics
● Legal: Health care Taxes
● Capital requirements
● Brand loyalty
Threat of New Entrants
Low threat
● American Eagle● Gap● Neiman Marcus● Nordstrom
Constant moderate threat
Substitutes
● Moderate: Computer systems
● Low: Wholesale companies
Power of Suppliers
Individuals
Power of Buyers
Low power● Kohl’s 32.3%● Sears 27%● Macy’s 19%● JCPenney 12%
Low power
So what?
• Top four rivals compose 90% of the market share for this industry.
• As a result, the threat of new entrants is low.
Resources Capabilities Valuable Rare Inimitable Organization
Tangible Oracle Retail Solutions
Increases efficiency
X X X
Intangible JCP private store labels
Increases quality & customer responsiveness
x x x x
Human Resources
CEO Myron Ullman
Increases efficiency
X X X X
Organization History: James C. Penney and company age
Increases customer responsiveness
X X X X
Building Blocks1. Customer Responsiveness2. Efficiency
Combination of differentiation and low unit cost.• Minimal innovation • Low quality
Recommendations1. “Go green”
• Advantages: Attract a new, younger, customer base Builds a new reputation
• Disadvantages Expensive Not guaranteed to cause desired effects
Recommendation Cont.2. “Who We Are” campaign: Internal and external components
• Advantages: Build morale and get everyone up to date Rebuild the culture Show customers that J. C. Penney is still a viable place to
shop.• Disadvantages
Expensive marketing campaign Not guaranteed to have desired effects
Suggested Recommendation
• Who We Are Help establish the culture again Bring back customers
Regain trust Increase brand recognition and awareness
Coupons, sales, and private labels
Additional Recommendation
• J. C. Penney could move from being a publically held to privately held company.
Stock price Withhold financial records from the public
• Firm Infrastructure Organizational goals Re-establish relationships
• Human Resource Management Internal component helps increase employee
motivation, job commitment, and job satisfaction.
• Resource Procurement Lower cost (media channels)
Maintains expected quality by using trio of advertising agencies JCP uses.
• Campaign will contain sales promotions and advertising
• Sales force training
• Rebuild reputation
Marketing and Sales
Customer Service• Make employees more accessable to
customers in the store to handle customers’ needs.