- The Paper Your Case History analysis should include the following:
- An overview of the company. This should include its origin, its mission statement and the size & reach of the company. If this information is not provided in the case text, consider searching external sources.
Note: for Case
- you are prompted to write a mission statement in the questions. Improve upon Dyson’s current mission statement.
- Perform a SWOT analysis for the company. Use the information provided in the case as well as any external information you feel is appropriate.
- Answer the questions at the end of the case.
- What would you recommend the company do?
Solution
COMPANY OVERVIEW
Origin of JCPenney
JC Penny is 110 years old retail chain. It is a prominent departmental store in the United States. It contains 850 stores in 49 states. James Cash Penney founded this organization in 1902. It opened its first store on April 14. From 1960 to 1979, the company gained the success and growth due to people’s response to some acquisitions by the company.
Mission of JCPenney
“The mission of the company is to become the source of the encouragement and inspiration to offer style and quality at low prices. We’ll show our customers that what matters to them, matters to us”.
Size & Reach
The company is operating in different parts of the world. Operation in 49 counties along with 850 stores depicts the success of the expansion strategy of the company. According to 2018 reports, the revenue of the company is US$ 12.506 billion
THE IMPROVEMENT UPON DYSON’S CURRENT MISSION STATEMENT
To make improvements in the mission statement, the management has to align with the pricing strategy. The improved mission statement is” the mission is to deliver products and services through offering differentiated pricing strategy, which enhances the customer experience.”
SWOT ANALYSIS
Strengths of JCPenney
The biggest strength of the company is its business expansion in different locations. For Instance, JC Penney is quite capable of opening the store where people are gathered to hang out. It has been revealed that operational changes by the company worked in the competitive market. The financial condition of the company is also a prominent strength.
Weakness JCPenney
The decline in sales is the biggest weakness. After getting $32.5 billion in term of sales, the company has faced the rapid decline. The company did not integrate with modern retail trends, which allowed rivals gain the competitive advantage.
Opportunities for JCPenney
It seems a great opportunity for the company to increase the sales through the new pricing strategy in the competitive retail market. From 590 separate sales each year, the company can expect the customer response and set new margins. “Fair and Square” pricing is to be streamlined through different media channels. It seems a great opportunity to rationalize the new pricing strategy through running the campaign on media channels
Threats for JCPenney
The biggest threat is the existence of Wal-Mart, Target, and many other retailers. Also, when dealing with “Enough is enough,” customers may come up with a prominent resistance, as they may refuse to accept some major changes. In 2013, loss of $4 billion regarding revenues may hit the strategic opening, and it seems a huge threat to this company.
QUESTION 1-Of the major pricing strategies, which one best describes JCPenney’s “Fair and Square” pricing strategy?
The response of customers in different stores best describes the fair and square pricing strategy. After this development, customers were screaming in stores and waiting in long lines to be lucky customers. Due to this pricing, the company was in the best position to make the right combination of different products and sell at the fair price.
QUESTION 2-Compare JCPenney’s former traditional approach to pricing versus the “Fair and Square” pricing strategy. Discuss the advantages and disadvantages of each.
The traditional pricing approach was not up to the mark because it did not attract or convert customers. Customers want to enter in stores in case of any sale in the store. Comparatively, fair and square is the best pricing strategy, as it provides consistently low prices. This pricing strategy is difficult to understand, as it resembles the Wal-Mart’s everyday low price. The big difference between traditional and modern pricing strategy is the responsiveness of customers, fair and square pricing is a source of the boost in sales.
QUESTION 3-Discuss the role of product, place, and promotion in connection to “Fair and Square” pricing.
Regarding the product, the main intention of the company is to add more products. A big product portfolio justifies the fair and square pricing strategy. In the contemporary retail market, the customer is looking to make some choices in stores regarding the features, benefits, and prices. Thus, to make this pricing strategy successful, shaping some new products is an attractive initiative. Regarding the placement, the company intended to target areas or spots, which are customer’s preferences. Promoting the pricing through campaigns, coupons, limited time sales events, and doorbuster deal are some promotional tools to streamline the fair square pricing strategy.
QUESTION 4-Did “Fair and Square” pricing fail for JCPenney? Explain your answer.
Fair and square pricing strategy is not a failure. However, the company management has overestimated sales. Still, the company is facing the decline in sales. For Instance, on February 20, revenue dropped 25% (13 billion). Customers did not value the coupon and sales, according to the company’s expectations. Instead of integrating with the suggested retail prices, the company a must have to make the difference through key events and holidays. It may take work, but it can work for the company.
QUESTION 5-With Johnson out and Ullman in, what do you predict for JCPenney? What recommendations would you offer?
For Ullman, it is necessary to keep the constant sales and deep discounts. It has been revealed the company has faced the lowest sales decline in last 25 years. Now, it seems necessary to make the difference through the major transformation. Like other retail chains, it is important for the company to use the customer analytics. For instance, the use of the big data to derive customer insights may help the company to pay with deep discounts and sales process, deep discounts, and sales price are to be aligned with customer behavior, attributes, and trends. The departure of the Johnson is not good news for the company. However, it is a perfect time to move forward and integrate with some strategic considerations, as far as the new pricing strategy is concerned.
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