STRATEGIC ALTERNATIVES

In January 2012, newly appointed CEO, Ron Johnson introduced a plan to rebrand the department store chain into a 21st century retail powerhouse. Launching of the new J. C. Penney brand identity was set to occur over four years and would include a new logo, a new in-store experience featuring new and transformed brands, and most importantly, it would change the way that the company priced merchandise. Unfortunately, J. C. Penney suffered a 25% sales decline in the first year and Johnson was fired after only 17 months.
Historically, J. C. Penney’s strength had been communicating the relationship between quality and value, in a way that the customer could understand. J. C. Penney lost this connection when we …show more content…

At the same time, the first Wal-Mart, Target, and K-Mart stores emerged with their low prices and convenience that was hard to replicate.
Today, companies like Nordstrom, Saks Fifth Avenue, Neiman Marcus, and Macy’s are considered luxury department stores, while Target and Wal-Mart are “discount department stores.” Modern-day department stores still offer convenience and variety, but they no longer offer the experience and status that they once did. Tearooms and elegance no longer symbolize these enterprises.
They are places to shop for a wide variety of goods that cannot be found elsewhere. Shoppers can find low prices at Macy’s and Target, so why would they search for an exclusive department store that may only be located in a shopping mall? This is the question to address when looking at J. C. Penney’s competitors in this department store industry. Target and Macy’s both offer affordable products, but they emphasize quality. Additionally, lower-end stores such as Ross and TJMaxx are seen as competitors with their emphasis on low prices. Although J. C. Penney should be offering the department store “experience,” it no longer is a deep discounter or a highly prized brand. The department store industry is highly competitive, so how can J. C. Penney differentiate itself? The financial crisis of