internal and external analysis JC Penney
J.C. Penney is a retail outlet that operates in many locations globally. It deals with product lines such as clothing, footwear, beauty products, electronics, and jewelry. There are several changes that have taken place in the macro environment that promises to increase the fortunes of the company. The advertisement in technology is one single important factor that has increased the performance of the business (Ali, 2007). The company has an elaborate website through which it uses to tap the online market. In fact, thirty percent of the company’s revenue comes from the website.
The overall threat of new entrants in the retail market is a high level threat as it is relatively easy and inexpensive to enter the market. Entering the retail market as a competitor of J.C. Penney however, is a low-level threat. The initial investment and capital requirement to enter the retail industry at such a high level is so great that it would be near impossible to compete with J.C. Penney. J.C. Penney has product differentiation by supplying the store's own brand. They also have a long history and reputation of supplying quality products. J.C. Penney has the advantage of buying in large quantities at lower costs, and an established supply chain reducing costs of procurement of goods. J.C. Penney has established large retail space which would be extremely costly to imitate.
If internet retail stores are considered a substitute, the threat is massive. J.C. Penney has joined the online retail market and offers most of its products on their website in order to compete in this market. There are many online retailers out there that are making a strong push in the market with very similar product lines that J.C. Penney offers. Such players include Woolworths, Kohl’s Inc., Macy’s Inc., and Wal-Mart. The products include clothing, footwear, beauty products, electronics, and jewelry.
J.C. Penney is a powerful buyer with bargaining power. There
The overall threat of new entrants in the retail market is a high level threat as it is relatively easy and inexpensive to enter the market. Entering the retail market as a competitor of J.C. Penney however, is a low-level threat. The initial investment and capital requirement to enter the retail industry at such a high level is so great that it would be near impossible to compete with J.C. Penney. J.C. Penney has product differentiation by supplying the store's own brand. They also have a long history and reputation of supplying quality products. J.C. Penney has the advantage of buying in large quantities at lower costs, and an established supply chain reducing costs of procurement of goods. J.C. Penney has established large retail space which would be extremely costly to imitate.
If internet retail stores are considered a substitute, the threat is massive. J.C. Penney has joined the online retail market and offers most of its products on their website in order to compete in this market. There are many online retailers out there that are making a strong push in the market with very similar product lines that J.C. Penney offers. Such players include Woolworths, Kohl’s Inc., Macy’s Inc., and Wal-Mart. The products include clothing, footwear, beauty products, electronics, and jewelry.
J.C. Penney is a powerful buyer with bargaining power. There
References: Ali, K. (2007). Commercial Business Organization. New York: Routledge-Cavendish. Britton A. & Jorissen A. (2007). International Financial Reporting and Analysis. Boston, Massachussetts: Cengage Learning EMEA.