Week 5 EOC: Fixing JC Penny

JC Penny's recently appointed CEO, Ron Johnson, was fired from his position for failing to do what he was hired to. Ron Johnson had not only failed, but he did it in a way that was obviously doomed to failed. He had taken a company that was already struggling with costumers and sales, and made the situation far worse. He attempted to makeover the how the store ran. He stop putting "fake" prices for more realistic ones, and stopped coupons and sales. Sales dangerously decreased in eary 2012, and overtime the mistake that was made was becoming more and more obvious to even Ron himself. Even after he realized his mistake, the damage was done. Fast foward to now, he had not only failed to attract more costumers but he lost most of the store's loyal and longest-standing costumers. Ironically during the time that he was hired in the fall of 2011, people thought that he would take the 'genius' creativity and innovation he had previously brought to two companies to success.

"By most accounts, Johnson was trying to accomplish the seemingly impossible with a radical reinvention of the JC Penney brand. Many thought that if anyone could do it, it was Johnson, the retail superstar credited for making Target hip and turning the Apple Store into a monster success story. His plans were bold—too bold, virtually everyone now agrees." http://business.time.com/2013/04/09/the-5-big-mistakes-that-led-to-ron-johnsons-ouster-at-jc-penney/#ixzz2bbmbcvp8 

"JC Penny operates in a competitive landscape that is much closer to the promotion-intensive, distribution-intensive consumer packaged goods world of P&G than the heavily price-controlled and limited distribution world of Apple from which Ron Johnson came. Consumers are used to promotions in the department store world, even more so in the segment of the market that JCP operates in. These are price-sensitive, budget-constrained consumers who are willing and able to go to the store next door for better deals." http://www.usnews.com/opinion/blogs/economic-intelligence/2013/04/12/why-jc-penny-failed-under-ron-johnson

 Even though Johnson did create a mess, JC Penny's wasn't stable even before they hired him (it was ultimately the reason why they scouted the man). JC Penny's main costumer were older women and men, it wasn't the place to shop for everyone else. Their advertisements didn't help either. Point is: if they want to surface from the bottom, they need to fix their mistakes but not head into unknown territory like the way did with Ron Johnson. Something they can do, in my opinion, what JC Penny can do is first is what are actually what they are currently doingwith the return of their old sales and sickout policy: attempting to bring back the loyal costumers that are willing to come back. The company released an apology ad, stating the company has learned from their mistake and basically want the costumer they lost back. It could at least buy them time to not only increase sales but bring in more costumers and keep them loyal. They could also begin to include moreroducts that are more on trend and able to attract more costumers. This way they'll attract new and returning costumers. At least for right now, this can be a solution to the bottom they fell through.

"In a tough economic environment where consumers have been pinching every penny, Johnson’s plan backfired and competitors pounced on the opportunity.Telsey said for JC Penney to succeed, it would have to lure its core customers back — a move that she said is possible." http://t.nbcnews.com/business/what-jc-penney-must-do-fix-itself-1C9284003

Sources:
http://business.time.com/2013/04/09/the-5-big-mistakes-that-led-to-ron-johnsons-ouster-at-jc-penney/#ixzz2bbmbcvp8
http://www.usnews.com/opinion/blogs/economic-intelligence/2013/04/12/why-jc-penny-failed-under-ron-johnson
http://t.nbcnews.com/business/what-jc-penney-must-do-fix-itself-1C9284003
http://www.forbes.com/sites/clareoconnor/2013/05/01/j-c-penney-releases-apology-ad-begging-shoppers-to-come-back/