JCPenney PP 2

By: Kendra Whittley, Sam Bell, Ami Mizell, Maggie Schaffer, and Brooklyn Dendle

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

External Environment Analysis

Macro-Environment & Porter’s Five Forces

● 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.

Internal Analysis

Resources and Capabilities & Generic Building Blocks

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

SWOT Analysis

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

Implementation

• 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.

Summary• Company introduction

• Macro-environment

• Porter’s Five Forces

• Resources and Capabilities

• Building Blocks

• SWOT Analysis

• Recommendations

• Implementation