Question

Do you agree with the changes Johnson is making to the pricing scheme that set to take effect August 1st? Are they enough to turn things around? What should Johnson do now? Looking out on year, will JC Penney be a stronger or weaker brand if he stays on the current course?

Answer 1

Do you agree with the changes Johnson is making to the pricing scheme that are set to take effect August 1st? Are they enough to turn things around?

Ron Johnson had decided to go back to old strategy before “Fair and Square” timeline. This would have actually cost a lot for JC Penny. Price change in a business with in a time frame of a year is going to have a major impact on the customers. This would create a huge confusion and frustration in the customers making JC Penny lose a huge percentage of core customers. This would not be enough to take things around. It might be easy & quick to go in to the loss but the recovery towards the profit line is always slow, painful process involved in risk taking strategies.

What should Johnson do now? Looking out one year, will J.C. Penney be a stronger or weaker brand if he stays on the current course?

Johnson needs to make “Fair and Square” scheme go. He needs to bring back sales, deals and offers for black Friday kind of occasions. It is always advisable to increase the advertisements over the social media. This is a fine way to attract young customers while retaining the core customers. He has to bring back the old JC Penney culture. Johnson needs to conduct market researches and survey to find out what customer needs and wants. If JC Penney stands on the current course of “Fair and Square” then the chances of companies share going down is high. The “Fair and Square” strategy made a huge impact of letting the shares go down from 17 billion dollars to 11 million dollars. The impact is too huge for the company to recover. If they do come up with any brilliant strategy then they could cover up some part of the loss while aiming to retain the reputation of the company.