Business – Management at J.C.Penny
Introduction
J.C. Penny Inc (JPC) is an American Company that has its origins in Kemmerer, Wyoming while
its headquarters is in Texas in the USA. Its founder is James Cash Penny and was later assisted
by William H. McManus in the year 1902. It deals in retail business with interest in clothing,
footwear, cosmetics, house wares, electronics, furniture and also jewelry. It 2013, it registered a
turnover of almost $13 billion and a net loss of almost $1billion. Its major competitors are
Kohl’s, Sears and Belk. www. JCP.com
1. Initially J.C. Penney operated in-store catalog tables in about a number of states before
embarking in fully owned shopping complexes and malls. J.C. Penny is a public limited
Company whose management styles are close to Paternalistic management style of working.
This is where the leaders and the senior managers of the company make decisions that they
consider best for the company as well as to the employees. (Drucker, 1999) These policies are
developed and implemented for the full benefit of the company and the employees. Most of the
feedback, suggestion, compliments and opinions of the junior staff are also included and
considered when decisions are made by management. This type of leadership motivates the
employees to work hard as they feel attached and part of the organization.
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Between the years 1902 and 1959, J.C. Penny operated independent stores in different parts of
the country. These stores numbered slightly more than one thousand six hundred which were
located in forty eight states across the US.
The managers of these stores managed the stores operate independently while their central office
in New York coordinated all the activities of the stores in all states. In 1920, JCP acquired its
first company and wholly owned subsidiary, The Crescent Corset Co.
In 1979, JCP allowed and introduced in its systems the credit card payment system that accepted
major credit cards. Five years later, JCP acquired its own Bank that was formerly First national
bank in Delaware.
Some of the Companies that JCP acquired are specialized and require skilled manager’s with
modern and different styles of management. In 1996, Fay’s and Kerr Drug were acquired by
JCP and combined together with some other subsidiary that was also acquired by JCP and later
named the Thrift drug.
In the year 2011, JCP scaled down its catalog business and introduced the store within a store
type of business. (Clark, 2012)
2. The catalog business was scaled down in the year 2011 and eventually discontinued in
October 2011. JCP relocated some of their merchandising businesses in New York to provide a
central location for its internet sales supplies also to enable easy coordination of transportation
and other logistic. The company reduced the number of staff and also established a call center in
Pittsburgh, Pennsylvania. The transition was problematic as JCP was facing financial difficulties
and most of its operations were making losses. The high number of employees being retrenched
suggested that the management was facing liquidity issues.
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3. The use of celebrities in product advertising may not be ethically positive as all human beings
have their own successes and failures. (Kotler, 1991) To make a decision to use only a person’s
positive attributes while ignoring and vilifying his negative attributes is both cynical and
unreasonable. The whole concept of using celebrities to advertize products works both ways.
They may improve or decrease sales depending on the season and the position they are currently
in. To gain the best advantage, several celebrities should be used for a shorter period of time but
at diverse periods of their professional sports life. The impact of using the celebrities didn’t
wasn’t felt as the company’s financial continued to decline. No improvement was registered and
the sales continued to decline such that by the end of the year 2013, JCP had incurred a net loss
in its operations that amounted to $1 billion.
4. One of the innovative ideas is basically to reinvent the marketing department, rebrand JCP
and develop new marketing strategies, differentiate the JCP products through distinctive market
segmentation processes and position the products strategically in the market.
The main aim of market segmentation is that it encourages the efficiency in marketing
operations by narrowing the market accessibility specifically toward a designated, defined and
available segment in a way that is in line with the characteristics of the segment. Market
segmentation gradually leads to product differentiation which separates each segment while
tangibly or intangibly in all respects differentiating it from the competitors.
Positioning involves the development of brands as the final images of the company’s products
or services. The combination of all the useful elements of marketing mix is needed to achieve the
stated strategy. Positioning explains and portrays the uniqueness of the services and products in
the common market place and also its major advantages against the other competitors. Branding
is a tool that is often utilized to place and position the product in the market by designing its
Business – Management at J.C.Penny 4
packaging and the writing styles used on the posters. (Knox and Macklan, 1998) For any
communication to be effective, the customers must form a picture mentally about his perception
of the product which eventually influences the price they are willingly or a ready to pay for the
product. Brand equity occurs where customers are willing to pay much more for a product
because of its position. The development of product advertising and promotional message takes
place after the service or product has being successfully position and the potential customers and
their needs have been identified i.e. the requirements and needs of the target group. A distinctive,
creative, unique and well branded advertising creates impressive results that ensure successfully
advertising, marketing and promotional strategy. These will lead to improved sales and better
remuneration for the employees who will be motivated and work even harder for the company’s
success. (Gronroos, 1990) The company should adopt strategic choices and other competitive
strategies. Strategic choice in this case, refers to the critical evaluation and assessment of various
strategic alternatives while comparing one set of alternatives against another. Competitive
strategies are the strategies chosen and adopted by the company for effective implementation.
Product and market strategies all target improved sales and strategic expansion in the change
process. Product types refer to the range of products available to enhance marketing strategy.
Market share strategy allows a company to concentrate and limit its resources to the best and
greatest opportunity to increase sales and gain competitive advantage over its competitors.
5. Following the various instances that JCP has embraced change to enable the company to
compete effectively in the market I would say that JCP can adapt very well to changes in the
global and local market. JCP was one of the initial companies that successfully integrated the
credit card systems in the early years and also introduced the house wares internet sales.
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Change management for JCP may involve setting corporate objectives and identification of the
organization’s mission and its purposes, and then on this basis of these objectives a strategic
management for its marketing and customer needs should be formulated. The objectives will
define what the corporation wants to achieve for itself and to the general society.
The company should concentrate on a few specialized items instead of embracing all the
different types of merchandising goods and various services like banking which require a
different approach of business strategies. The sales of the automobile spare parts to firestone was
a good decision but more departments like the drug stores also need to sold so as to leave the
house wares, cosmetics, clothing, jewelry and other manageable departments that have easier
handling and supervisory needs.
The company can then embark on various marketing strategies to improve its sales. A pulling
strategy generates the consumer demand for its product or service mainly through advertising
and sales promotion and marketing appeals. The ultimate aim of the advertisement is to create a
demand for the service among the potential clients who will eventually be attracted by the
product or service. If a strong demand is created it will pull an item, product or service by
compelling the marketing intermediaries to accommodate it through the marketing channels.
(Kotler, Philip and Armstrong, 2007)
Change management includes employee training, skills, innovation, training and corporate
cultural attitudes relating to individuals and the corporate improvement. In a related knowledge
worker organization, the people are the only repository of innovation and knowledge as the main
resource. It’s important for skilled and innovative personnel to be in a continuous learning mode.
Business – Management at J.C.Penny 6
This constitutes an essential foundation for the success of the knowledge worker in change
management.
Internal benchmarking or best practice benchmarking is the process used in the organization
where analysis and evaluation of various aspects of practices and processes in relation to the best
company’s processes and similar activities normally within a peer group are compared to its
own. (Bogan, English, 1994). This allows the organization to identify and develop plans that
will make the most impact in its improvements and increase its performance substantially. It’s a
continuous process whose results are gradual but effective. (Boxwell, 1994)
The effects of these processes may be positive or negative depending on the employees, the
management or on the senior executive staff perception. Some may view these changes as
stressful and resist the changes while others may cooperate and work positively towards the
implementation processes. The leader should be decisive when dealing with each category as the
results and targets of the organization depends on the cooperation of all the employees. (Drucker,
1999)
To conclude, JCP needs to rebrand its business processes in the market and also adopt the
modern techniques business operations by expanding its operations also to other emerging
markets.
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References
Boxwell, R. (1994) Benchmarking for Competitive Advantage ., New York: McGraw-Hill.
Bogan, C., English, M. (1994). Benchmarking for Best Practices: Winning through Innovative
Adaptation. New York: McGraw-Hill.
Camp, R. (1989). The search for industry best practices that lead to superior performance.
Productivity Press.
Drucker, P. F. (1999) Management Challenges of the 21st Century. New York: Harper
Business,
Gronroos, C. (1990) ‘Services Management and Marketing’, Lexington Books,
Lexington, MA
Knox S and Macklan (1998), ‘Competition Value: Bridging the gap between
branding and customer value’, F.T. Pitman
Business – Management at J.C.Penny 8
Kotler, Philip and Armstrong, (2007) Gary Principles of Marketing Pearson, Prentice Hall, New
Jersey
Kotler, P. (1991) ‘Marketing Management: analysis planning and control’, 7th
edition, Prentice Hall, Englewood Cliffs, NJ
Www. JCP.com
Clark, E. (2012) “J.C. Penney Launches Shops-in-Shop” . Women’s Wear Daily. Retrieved 13
August.
