Turn around of JCPenney Essay


JCPenney Company, Inc. has realized the need for a company overhaul in order to remain competitive in their market. They have made positive changes like hiring Vanessa Castagna as the new Chief Operating Officer to incorporate new processes and systems and to ensure that senior management would be educated and on top of things. Her prior experiences with Wal-Mart and Target will ensure that JCPenney has an insight into their competitors marketability. Additionally, the hiring of the new Chief Executive Officer, Allen Questrom will give JCPenney upscale knowledge that will hopefully attract a new line of customers. Allen Questrom was previously of Nordstroms and Neiman-Marcus.


A major weakness of JCPenney was the fact they previously had excess inventory on hand that was taking away from the bottom line. This excess inventory was not able to be sold quickly enough leaving the opportunity to make profits tied up in for long periods of time. Additionally, excess stock that was not being moved off the shelves would result in the company not being able to keep up with the changing fashion trends. The money was tied up in the outdated overstocked items, and they were not able to purchase new merchandise in order to keep shoppers coming back for the latest trends.


Brining in outside upper level management with experiences in other markets will give JCPenney the opportunity to restructure their business plan and marketing campaigns to breathe new life into the company and attract a new line of customers. The new management sees the opportunity to corner the market for medium annual income ranges such $25k – $75k range. They realize that this is an opportunity to attract a huge piece of the market by appealing to middle income families by creating affordable and updated fashions for both the home and the individual. Additionally, JCPenney realized the importance of keeping their internet and catalog sales active.

They made it possible for customers to shop either outlet and if needed, make exchanges and returns via the storefronts for a no hassle service. Also, the use of a centralized purchasing system enabled JCPenney to eliminate their outdated inventory items by almost half. This would allow them to get new in season merchandise into the storefronts a quicker pace. Finally, the cosmetic updates made to their shopping centers would improve their image in the publics eye. By making simple changes like new paint schemes, lighting, and adding new fixtures would create a new look and entice the customers to come back into the stores to see the improved quality.


As with any merchandise retailer targeting middle income levels, the threat of other fashionable reasonably prices merchants is always there. The competition of Kohls, Target and Wal-Mart is something that the executives from JCPenney will have to always keep on top of.


JCPenney needs to constantly focus on their customers and their needs. To do this I would recommend implementing marketing teams that is responsible for researching current fashion trends and performing market analysis on the same type of merchandise retailers such as Kohls and Old Navy. Additionally, using customer satisfaction surveys will ensure the voice of the customer is being heard and their needs are taken into consideration. Finally, the continued use of the electronic inventory systems will ensure that overstocked items and outdated merchandise do not remain part of the stores inventory ultimately tying up cash flow.

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