BPMN6023
STRATEGIC MANAGEMENT
CASE STUDY
Is JC Penney Killing Itself with a Failed Strategy?
PREPARED BY
NAME
MATRIX NO
LEELA SAAI SUBRAMANIAM
827190
PREPARED FOR
DR MOHD TAIPOR SUHADAH
1. What strategy was the new CEO at JC Penney seeking to implement based on the
generic strategies
The new CEO of JC Penny, Johnson rebranded and implemented new strategy by remaking
JC Penny retail stores by focusing on the specific brands and the types of good within the
stores by bringing up new pricing system for the store with the aim of providing customer
better price deal on all products instead of special discounts on the specific products but
unfortunately this new strategy failed.
2. What was the result of change in strategy implemented?
The result of the implemented new strategy makes JC Penny to overlook their current
customers and the old customers were lost, thus the strategy implemented market as failure
because of the sales decreased and the stock prices also decline makes the company to bear
losses.
3. Why was this strategy a disaster for JC Penney?
This new strategy was a failure because apart from decline price in stock market, they tend
to make lesser profit compare to the old discount method. Other than that, one third only
converted their stores to this new approach when the company promoted heavily the new
concept stores which affected the sales because the new stores only make more profit
because of their new shop look but the other shop sales were declined. Also, they did not
make new customers from outside but from the old stores itself. These new approaches
implemented by Johnson only focused on capital market but not help in satisfying
customers to gain advantages in the competition.
4. What does it mean to be 'stuck in the middle' between two strategies (i.e. low cost and
differentiation strategy)?
As per read from Michael Porter, it is an affair of a business level competitive strategy
because a business cannot successfully pursue for low cost and differentiation strategy at
the same time in a customer’s mind targeting a segment because it might result in weak
profitably and market picture. Most of the firms most probably stuck in middle to whether
they have to choose to be different or pursue low cost. According to the porter, a company
should only focus to be either implement low cost or differentiation strategy to achieve
success in their market as firms that are stuck in the middle generally perform poor because
of lack competitive.