Summary Of J. C. Penney's Strategy

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J.C. Penney’s new CEO Ron Johnson has decided to make changes to the company’s strategy. Shortly after taking the new position he learned the company had marketing strategies that were what he considered to be over the top. After signing up for email notifications, he found his inbox flooded with sales notifications. This was concerning as 75% of J.C. Penney’s merchandise was discounted at 50% or more. Furthermore, research showed the average customer only made a purchase four times a year. These frequent sales were not effective at increasing profits for the company.
The new CEO has now taken on the risky venture of reinventing the retail experience at J.C. Penney. Johnson strategy is to replace the constant sales with everyday low prices and eliminate the high traffic store center and make it an entertainment epicenter. The retail store also wants to update pricing in order to bring shoppers back into the store and create profits.
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Penney will prove to be tasking. Many of J.C. Penney’s clients have become accustomed to huge discounts offered by the company. In recent years, the company has faced strong competition from Macy’s Inc. and Kohl’s Corp. In efforts to increase revenue, the J.C. Penney eliminated its catalogue and invested heavily in name brands such as Sephora and Mango. However, these efforts have not been successful as the retailer still must offer large discount prices in order to move the merchandise out the store. This has not been an effective strategy for the