The 5 Big Mistakes That Led to Ron Johnson’s Outer at Jc Penney

Topics: Retailing, Department store, Specialist store Pages: 2 (610 words) Published: April 30, 2013
The 5 Big Mistakes That Led to Ron Johnson’s Outer at JC Penney

JC Penney, is known as one of the national department stores in the U.S. through 1960’s. Recent years, the sales and financial performance of JC Penney were continually decline due to the strong competitive environment within the retail market. In order to keep the brand’s remaining in the top national department stores and also save the brand image and its sales of JC Penney, they hired the formal excusive of Apple Inc., Ron Johnson, as JCP’s new CEO in Nov, 2011. While, after seventeen month with his job at JCP, Johnson got fired and replaced by former CEO Mike Ullman. Ron Johnson, Used to be the VP of Retail Operation of Apple Inc. from 2000. Under Johnson’s direction, the retail stores of Apple achieved a record level of growth, exceeding a billion dollars in annual sales within two years. Before joined Apple, Johnson was the VP of Merchandising at Target, who helped Target raise its brand image to become the upscale super market. It seems Ron Johnson will be the Messiah to save the struggling American retail when he joined the company, but under his new strategy, JC Penney losses millions of customers and the revenue dropped almost one billion in the past year. The article discussed five big reasons make Johnson fail on running the company: * “He misread what shoppers want”

* “He didn’t test ideas in advance”
* “He alienated core customers”
* “He total misread the JC Penney brand”
* “Overall, he didn't seem to like or respect JC Penney”

One of the major strategy Johnson brings to JCP is called the “fair and square” pricing strategy, which using the everyday-low-price to replace those inflated original list prices (the “fake price”). Besides doing these, Johnson also reduced the promotion by minimize using coupons and sales in their businesses. In the past days, 1% of their annual revenue came from selling of full price product, and nearly...
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