Discussion:
The J.C. Penney Case
Recall
the example of J.C. Penney described in Week 1. In August 2012, Ron Johnson,
the J.C. Penney chief operating officer, was reviewing the changes he had made
to the company’s business model and brand. Specifically, he introduced a new
pricing model known as “fair and square,” which was a change from the former
high cash flow pricing approach where frequent sales resulted in discounted
pricing off the day-to-day list prices. The fair-and-square model attempted to
simplify pricing to resemble everyday low pricing. In addition, the new
strategy involved a new store layout, the introduction of well-known brand
names, and the creation of J.C. Penney-specific clothing lines by well-known
designers (Ofek & Avery, 2012).
For
this Discussion, you need only consider the information in the case to respond
to the following questions. If you research and find more recent information,
do not assume that what J.C. Penney has done is necessarily correct. Be certain
to defend your recommendations.
By Day 3
Post your response to the following questions:
·
Describe the components of the J.C. Penney new business model.
·
Then, evaluate the business model’s overall effectiveness in the
following ways:
o How did all of the
components work together?
o What components, if
any, are missing?
·
Explain the relationship between J.C. Penney’s marketing/business
model and its pricing strategy. Offer lessons learned about the relationship
between marketing/business models and an organization’s pricing strategy.
·
Explain whether J.C. Penney’s brand is similar to other retail
brands (e.g., Target and Apple) where Johnson has had success in terms of its
marketing/business model and its pricing strategy. Explain why or why not.
By Day 5
Read your colleagues’ postings.
Respond to two or more of your colleagues in one or both of the
following ways:
·
Suggest issues or components your colleague might further consider
(Hint: What might your colleague have missed related to the
customers or competition?).
·
Referring back to resources in previous weeks of the course, are
there other issues or factors that J.C. Penney should have considered that your
colleague missed? Explain what you think the impact of those would be.
·
Recommend what J.C. Penney could do to be successful moving
forward.
