Regarding JCPenney's daily low-price strategic misstep. One reason for the decline in
revenue and overall sales is that JCPenney did not take time to understand their customer base.
They eliminated the value that many of their customers had by changing their strategy so much,
so abruptly. Many customers who liked the way J.C. Penney uses coupons now refuse to
continue shopping in the store because they do not understand or prefer this new sales strategy.
In order to remedy this kind of situation, our team would recommend the strategic team
try to do more research to maximize the benefit of their customers. Rather than focusing on their
lost customers, they needed to benefit their existing customers. They need to reach their
customer base, which means JCPenney needs better to market their plans in the most effective
way. This may be a combination of TV advertising and social media. In this way, their customers
can gain more information about the strategy and the new discount methods that JCPenney is
offering. Besides, they also need to fully analyze their customer base to understand who they
serve and their needs. By understanding this, they can effectively market their merchandise to
them by creating value for them in regard to the products they want or need. By analyzing their
purchasing history and purchasing decision methods, the company can try to sell their products
that satisfied customers’ needs. As JCPenney understands the specific needs of its customers,
what the company can do to meet those needs would be a big issue. Companies know that
consumers want low price, high quality, and good customer service, but it would be hard to
achieve without a proper management team.
According to Porter's generic strategies, companies can pursue a competitive advantage
across their chosen market scope through cost leadership, differentiation, niche, and integrative
strategies. It has been shown that the Everyday pricing cost leadership strategy did not work well
with JCPenney. However, instead of abandoning the existing strategy and implementing a new
one. Our team recommends that JCPenney utilize a focused method of either differentiation or
cost leadership. This method would depend on the product since not all of it is standardized,
through which JCPenney can focus on the needs of its customer base. They can do this by
focusing on buying groups or through the product line segmentation. This business strategy
enables J.C. Penney to strategize based on the team's specific needs and enables it to bring
maximum value to all customers.
Although JCPenney has still been subject to severe sales decreases overall, there is still a
glimmer of hope for the company. The New York Times wrote an article in November 2017
regarding the increase in JCPenney's stock prices due to their bold strategy. JCPenney offered
extreme discounts in order to get rid of those unsold items to make room for the popular new
modern style, especially among competitors, which leads to a 15.3 percent increase in their stock
prices (Hsu). This is an example of using a differentiation method of strategy by focusing it on
women's clothing and specific styles. According to the CEO, Mr. Ellison mentions, "We wanted
to flatten the organization, streamline decision-making and increase our agility in this rapidly
changing retail environment." (Hsu). This comment proves that the company is still actively
seeking new changes. Although the prospects for brick-and-mortar stores are not encouraging, by
focusing on understanding customers' needs and needs, J.C. Penney should be able to capitalize
on its marketing and try to reinvent itself as a formidable competitor in the retail industry.
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