Penney's Strategy Analysis

After taking the helm as CEO in the fall of 2011, Ron Johnson immediately began to deleverage the bargaining power of suppliers, customers, and tackling Penny’s rivalry with its competitors. His initial strategy focused on highlighting established brands, recapturing control of pricing, and making JC Penney stores more engaging (Kinicki & Williams, 2013). Mr. Johnson initiated this strategy by unwinding Penney’s reliance on expensive and ineffective celebrity lines, private labels, and exclusive brands and expanded JCP’s relationship with more established brands (Kinicki & Williams, 2013). Additionally, Mr. Johnson focused on regaining more control of pricing by dramatically reducing the number of sales, promotions, and price reductions by dropping initial product pricing by 40% to align with consumer expectations and accelerate the velocity in which products move off the shelves (Kinicki & Williams, 2013). Moreover, Penney’s has implemented a consistent sales/promotions schedule to control when sales occur so specific in season items can be targeted and clearance sales occur on the first and third Friday each month (Kinicki & Williams,
Johnson developed a strategy to re-imagine the retail shopping experience yet again, with a bold, but perilous strategy to redesign the retail behemoth’s 1,100 stores (Kinicki & Williams, 2013). His plan requires stores to be divided into various specialty shopping areas and the normally highly trafficked center area of the store to be transformed into a Town Square, to loosely mimic the concept of Apple’s Genius Bar (Sacks, 2013). Thus, making JC Penney stores a destination by creating a completely unique and distinctly different shopping experience for customers and differentiating Penney’s from competitors like Kohl’s and Macy’s (Kinicki & Williams, 2013). In closing, Mr. Johnson intuitively took swift and decisive action to formulate a strategy to address the competitive forces impacting JC Penney’s (Sacks,