The Retail Industry Inside J.C. Penny Company, Inc.
The industry that I chose to research is the retail industry and the publicly traded corporation that I chose within that industry is J. C. Penny Company, Inc. With this paper I will discuss a little background about J. C. Penny Company, Inc. , analyze the business level strategies that are most important to the long term success of the firm, analyze the corporate level strategies that is most important, the competitive environment, as well as slow cycle and fast cycle markets. J. C. Penney Company, Inc. , commonly known as J. C. Penney and formerly known as Penney’s, is a chain of American department stores based in Plano, Texas.
The company operates 1,107 department stores in all 50 U. S. states and Puerto Rico, and previously operated a catalog business and several discount outlets. In addition to selling conventional merchandise, J. C. Penney stores often house several leased departments such as Sephora, Seattle’s Best Coffee, optical centers, portrait studios, and jewelry repair. Most J. C. Penney stores are located in suburban shopping malls. Before 1966, most of its stores were located in downtown areas. As shopping malls became more popular in the latter half of the 20th century, J. C.
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Penney followed the trend by relocating and developing stores to anchor the malls. In more recent years, the chain has continued to follow consumer traffic, echoing the retailing trend of opening independent stores with some next door to competitors. The company has been an Internet retailer since 1998. It has streamlined its catalog and distribution while undergoing renovation improvements at store level (J. C. Penny History). J. C. Penney began his career in retail management when he opened The Golden Rule store, a partnership with Guy Johnson and Thomas Callahan, on April 14, 1902 in Kemmerer, Wyoming.
He participated in the creation of two more stores, and purchased full interest in all three locations when Callahan and Johnson dissolved their partnership in 1907. In 1909, Penney moved his company headquarters to Salt Lake City, Utah to be closer to banks and railroads. By 1912, Penney had 34 stores in the Rocky Mountain States. In 1913, all stores were consolidated under the J. C. Penney banner. The so-called “mother store”, in Kemmerer, opened as the chain’s second location in 1904. It still operates, as of 2011, except with hours shorter than many of its other store locations.
In 1913, the company was incorporated under the new name, J. C. Penney Company, with William Henry McManus as a co-founder. In 1914, the headquarters was moved to New York City to simplify the buying, financing, and transportation of goods. Around this time, Bert J. Niver joined the company as a junior partner (J. C. Penny History). By 1917, the company operated 175 stores in 22 states in the United States. J. C. Penney acquired The Crescent Corset Company in 1920, the company’s first wholly owned subsidiary.
In 1922, the company’s oldest active private brand, Big Mac work clothes, was launched. The company opened its 500th store in 1924 in Hamilton, Missouri, James Cash Penney’s hometown. By the opening of the 1,000th store in 1928, gross business had reached $190,000,000. In 1940, Sam Walton began working at a J. C. Penney in Des Moines, Iowa. Walton later went on to found future retailer Wal-Mart in 1962. By 1941, J. C. Penney operated 1,600 stores in all 48 contiguous states. In 1956, J. C. Penney started national advertising with a series of advertisements in Life magazine.
J. C. Penney credit cards were issued and accepted at its stores for the first time in 1959 (J. C. Penny History). James Cash Penney founded his company on the principle of the Golden Rule: treat others the way you’d like to be treated – Fair and Square. His legacy continues to this day, as J. C. Penney Company, Inc. boldly transforms the retail experience across 1,100 stores and jcp. com to become America’s favorite store. Focused on making the customer experience better every day, J. C. Penney is dreaming up new ways to make customers love shopping again.
On every visit, customers will discover great prices every day in a unique shopping environment that features exceptionally curated merchandise, a dynamic presentation and unmatched customer service (J. C. Penny). The business level strategy for J. C. Penny Company is to focus on the customer and their needs. James Penny was determined to make his customers love shopping and to give them the ultimate shopping experience in his stores; no matter what price he had to pay it was all about his customer’s needs. The employees were to form a relationship with the customers and try to find new ways to satisfy them.
The customers are the lifeblood of the organization and without them the organization would die. The retail industry is a fast changing industry to compete in. You have to be on top of the game in knowing what the current trends that customers want no matter what the age is. One thing that may be the trend today may not be the same trend tomorrow. That is how the retail industry goes and when the main product line is clothing you have to be able to adapt to the changes well and familiarize yourself with them. The strategy of focusing on the customers’ needs is the best choice they could make in order to have long term success.
Customers are what make success a real thing. When shopping customers want to feel as if the store is focused solely upon them and their needs. They want that individual touch to make it feel it was meant for them; whether that be with a warm atmosphere and friendly, helpful faces to help them with what they need. The corporate level strategies go a little deeper than the business level. The corporate is what keeps the business level functioning. The problems faced by J. C. Penney in the late 1990s and the changes brought about by the company in the early 2000’s. J. C.
Penney, which used to be a leading retailer in the United States, was not able to adapt itself to the changing business environment of the late 1990’s. The growth strategy, which had made the company successful, became a barrier for its effective functioning in the late 1990s. To turn around the company, J. C. Penney moved from a decentralized merchandising system to a centralized merchandising system, recreated its human resource practices by aligning the human resource practices with the business goals, sold off its drugstore Eckerd in order to focus on its core business, and repositioned itself as a trendy, yet value offering retailer.
These restructuring initiatives resulted in increased revenues for the company and improved stock values from $10 in 2000 to almost $50 in 2005 (Forbes). This became an excellent choice for J. C. Penny considering before the revamp they were fading away at a very fast and devastating pace. The downfall seems to have come from moving away from being solely based upon the customers. And moving away from that direction is a prime example of what will happen to a corporation that moves away from being customer based. Other competitors should have used J. C. Penny’s experience as a learning experience for themselves.
The most significant competitor to J. C. Penny I believe would be stores such as Macy’s, Belk, and Dillard’s. These corporations offer the same environment as J. C. Penny, such as shoes, apparel, jewelry, and make up. Although they offer some of the same brands as J. C. Penny, they also offer more well-known and demanded brands that J. C. Penny does not offer; brands such as Ralph Lauren, Tommy Hilfiger, Calvin Klein, Under Armor, and Coach just to name a few. These are all types of brands that are most popular now and carry the most current trends that consumers are out to have. These strategies are what I believe are going to affect J.
C. Penny the most. Those stores are the competitors and in order to compete you have to have the same demanded products available in your stores as well. It is sad to say but the world is all about the brand now instead of just the quality. But the economy has brought about a strategy that has been hard for all to maintain. People are tight with money but yet still want to maintain their high quality standards. This means that companies have had to strategize their marketing to accommodate the public’s budget by offering long term deals and specials that they are unable to resist.
I am sure this was a hard challenge for them all to be able to take financial cuts, but in that sort of industry that is what you have to do in order to keep your head above the water. Without customers they would have no stores, so they have no other choice but to accommodate around their overall situations. The competitor market would and could suffer in the fast cycle market because there is such a thing now as replica brands or imposters as most of us know them. These imposters imitate the popular brands at a fraction of the real brands cost. Although they are illegal, but it is a real challenge for them that happens every day.
In the fast cycle market there is no time to slow down and focus on the strategy. It is more of an all or nothing cycle. There is no time to hesitate. It is all about speed and has quick strategizing decisions to be made. Time is of the essence and is a precious resource that can cost a company dearly. Trend and technology is not protected due to the speed and makes it more vulnerable to imitations. Slow cycle markets are completely different. They allow a company to focus on what they are doing and plan out every single detail they need in order to gain potential success.
It is a well thought out process that is not stressed by time. Competitors have a hard time understanding this cycle because companies are able to keep their plans more discreet. The strategy of a slow cycle market is to protect, maintain, and extend the advantage that the company is out to put out. The risk is much less than the fast cycle market. A slow cycle market is more apt to bring J. C. Penny and its competitors more success because all of their processes and strategies will be well thought out with the consequences in mind instead of basing strategies upon impulses and hunches. J. C.
Penny started out as one of the leading companies in the world and quickly took a turn for the worst over an extended amount of time. But with corporates realization of what was happening before them saved them from devastating consequences. With their recognition it shows to all industries what can happen if you move away from your roots and do not stay on top of your goals. James Cash Penny probably rolled over in his grave when he saw what was happening to his beloved company that he built his empire around. But with quick strategy his legacy was saved and continues to build on the retail market.