JC Penney Case Study. Essay Example

JC Penney is an American department store chain that has over 865 locations within the United States. The organization deals with selling conventional merchandise and also house several leased departments such as salons, jewellery repair, Sephora, and optical centres. The paper focuses on the case study of JC Penney by studying and chronicling the history of the organization in the Ackman years. Also, the paper seeks to identify what went wrong in JC Penney, identifying and analyzing important issues in the case, as well as discussing lessons learnt from the case study.

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Johnson became the CEO of JC Penney in 2011, and his appointment looked like a mistake because he was an outsider from Apple Inc., which clearly did not turn out well for JC Penney (Lublin, Mattioli, & Co, 2013). However, the market did not think so at the time, and the share price of the company continued to trade at 31-32. At the time of his appointment, he had a good reputation due to the good work he had done at Apple stores and that was the reason the market did not think that he would lead to the failure of the company. Johnson later recruited other outsider staff at top management which made it even more difficult for the company. Therefore, Johnson was unable to transform the company's culture, which he needed to support his vision. Besides, he tried to replicate the culture of Apple by replacing managers at JC Penney with executives from Apple (Lublin et al, 2013). As a result, there was a decrease in staff morale due to layoffs made by Johnson, which later led to reduced sales and a decrease in the share price.

Some of the important issues from the case study include failure to listen to customers, inappropriate leadership, and failure to embrace change. For instance, JC Penney Company lacked good leadership after they recruited Johnson to lead the organization and laying off long-serving staff, thus demotivating them. Also, the company led by the CEO did not understand what its customers wanted (Clifford, 2012). For instance, customers of the company did not want an I-pad enabled shopping experience that was introduced by the CEO. Contrary, the customers wanted bargain-priced clothing and easy checkout. As a result of not listening to the clients, the company continued to make huge losses, and the share price kept on declining. The challenge associated with JC Penney was a bad strategy that was adopted by the board of the company (Lublin et al, 2013). The board recruited a CEO that was not knowledgeable on the marketing strategies as well as the company's culture. For instance, Jonson scrapped pricing policies that had been made by the company such as offering discounts, coupons, and heavy promotions, thus leading to its decline. Failure to understand the market and what customers needed also played a part in the fall of the company. The strategic mistakes done by the company regarding the pricing strategy led to losses within the organization. JC Penny did away with its normal pricing strategies after Johnson was made CEO modeling the company's stores after those of Apple (Clifford, 2012).

Some of the big lessons to take away from the JC Penney case study include the importance of considering marketing trends, being aware of B2B partnerships, good leadership and governance, understanding customers, and the need to motivate staff members, for instance, through promotions (Bianchi, & Ostale, 2016). Business and institutions should be at the forefront of motivating their staff to produce more. Therefore, the board should have identified a long-serving manager at JC Penny to become CEO instead of recruiting an outsider.

References

Bianchi, C. C., & Ostale, E. (2016). Lessons learned from unsuccessful internationalization attempts: Examples of multinational retailers in Chile. Journal of Business Research, 59(1), 140-147.

Clifford, S. T. E. P. H. A. N. I. E. (2012). JC Penney to revise pricing methods and limit promotions. New York Times,(January 26) B, 1.

Lublin, J. S., Mattioli, D., & Co, J. P. (2013). Penney CEO Out, Old Boss Back In. Wall Street Journal, 20.

Guffey, M. E., & Loewy, D. Business Communication: Process and Product (with meguffey. com Printed Access Card)(Available Titles Aplia).