Question

Late in 2011, JCPenney made a dramatic move, ousting CEO Myron Ulman and bringing in Ron Johnson. Johnson was perceived as a change agent who could reinvent the company as a new, hip place to shop, just as he had transformed the Apple Store from a run-of-the-mill mall store to an entertainment destination. His vision was clear, stating, "In the United States, the department store has a chance to regain its status as the leader in style, the leader in excitement. It will be a period of true innovation for this company." Johnson proposed offering new products and interesting product lines, such as Martha Stewart and Joe Fresh, to lure in high-end customers. He also envisioned JCPenney as a destination, where shoppers would look forward to spending time browsing the store, similar to the excitement one often finds in an Apple Store.

Unfortunately for JCPenney, Johnson's new vision was a near-complete failure. Penney's loyal customer base was unhappy with the new store and pricing strategies. The company failed to attract new customers and sales fell by 25 percent in one year. Even the major shareholder who championed johnson's recruitment, Bill Ackman, realized that the company had made a new fatal error, lamenting, "One of the biggest mistakes was perhaps too much change too quickly without adequate testing on what the impact would be. " Notre Dame marketing Professor Carol Phillips points out that the company failed to understand the buyer with its new value pricing, no sale strategy. "JCP's CEO Ron Johnson was ... clueless about what makes shopping fun for women. It's the thrill of the hunt, not the buying." The new strategy was a mismatch with the company's existing managers, product lines, pricing strategies, and customer base.

Do you think Ron Johnson changed the mission of JCPenney or just implemented new strategies? Be sure to support your conclusion.

Answer 1

Ron Johnson just implemented new strategies due to below reason:

1. First of all JC Penney’s mission statement is “To help customer find what she finds for less time, money and effort”. But Ron Johnson focused on bringing new products in product line to suit the high end customers instead of focusing on providing products for reasonable price.

2. He tried implementing same Apple strategy concentrating on the high end customers but did not realised JC Penney was a departmental stores which catered to all kinds of customers.

3. Also he did not focused on the internal culture and just focused on the outside market.

4. Johnson wanted to make a retain revolution but did not make an internal and external analysis and just went with his own strategies which was actually an assumptions.

5. While he focused on destination shopping, he eventually removed the best strategy discounting which was provided by JC Penney and hence many of the loyal customers were disappointed. This was against JC Penney of money.