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JC Penney & Joe Fresh Strategic Alliance: A good fit?. G.W SHWARTZ CONSULTING GROUP: Donisha Young, Kent Nunn, Ryan Sloan, Caroline Gilbert . Agenda. Description of Article Internal Analysis: J.C. Penney Company overview Target market analysis Financial analysis

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JC Penney & Joe Fresh Strategic Alliance: A good fit?


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jc penney joe fresh strategic alliance a good fit
JC Penney &Joe Fresh Strategic Alliance: A good fit?

G.W SHWARTZ CONSULTING GROUP:

Donisha Young, Kent Nunn, Ryan Sloan, Caroline Gilbert

agenda
Agenda
  • Description of Article
  • Internal Analysis: J.C. Penney
    • Company overview
    • Target market analysis
    • Financial analysis
    • Retail strategy mix analysis
    • Strengths and weaknesses
  • External Analysis: J.C. Penney
    • Positioning analysis
    • Competitive positioning map
    • Gross profit comparison vs. competitors
    • Porter’s Five Forces Analysis
  • Analysis of New Retail Strategy
  • Analysis of Partnership with Joe Fresh
    • Pros and cons
    • Implications of partnership
    • Expected results
  • Conclusions
analysis of article
Analysis of Article
  • Partnership with Joe Fresh
  • 700 stores
  • 4-year deal
  • March 2013: Store openings
j c penney company overview
J.C. Penney Company Overview

Mission statement:

"To be our customer's first choice for affordable fashion and quality as we enhance the quality of her life by being Bigger, and Bolder.“

Core Values:

  • Associates- We value, develop and reward the contributions and talents of all associates.
  • Integrity - We act only with the highest ethical standards.
  • Performance - We provide coaching and feedback to perform at the highest level.
  • Recognition - We celebrate the achievements of others.
  • Teamwork - We win together through leadership, collaboration, open and honest communication, and respect.
  • Quality - We strive for excellence in our work, products, and services.
  • Innovation - We encourage creative thinking and intelligent risk taking.
  • Community - We care about and are involved in our communities.
j c penney company overview1
J.C. Penney Company Overview
  • Mass merchandiser
  • Operates 1,104 department stores in 49 states and Puerto Rico.
  • Sells variety of products and product lines
  • Owns over 100 private brands
  • Objective:
    • Continue to focus on customer satisfaction and gaining customer loyalty by remaining first in its class in terms of customer service.
j c penney target market
J.C. Penney Target Market
  • Middle class/middle income
  • Women (age 30-50) with dependents
  • Visit store about once every 2-3 weeks
  • Savvy shoppers
financial analysis
Financial Analysis
  • Once the go-to place for home products
  • 13% drop in customer traffic in fiscal year 2012
  • 25% fall in revenues in fiscal year 2012
  • Fewer customers are coming into stores and when they come purchases are smaller
  • Has not participated in the economic recovery as well competitors
  • The financial position of JC Penney shows the urgency to incorporate Joe Fresh in their company. They need to move forward , and Joe fresh is a good fit.
retail strategy mix
Retail Strategy Mix
  • Location: Urban shopping centres
  • Merchandise: Extensive width and depth of

assortment

  • Competitive Pricing: JC Penney is price oriented, and working toward attracting cost-efficient customers
  • New pricing strategy, consisting of "fair and square”

pricing. It includes three types: everyday, regular prices; month long values

  • Atmosphere: Good to excellent
  • Promotion: Heavy ad commercials, also using

catalog use; direct mail, personal selling.

  • Customer Service: medium levels
j c penney s position in the marketplace
J.C. Penney’s Position in the Marketplace
  • Indistinct middle-American value-priced merchandise
  • Neglected building a brand
  • Focused on pricing strategies to drive traffic
  • Perceived as value retailer offering mid-quality products and product lines
slide12

J.C. Penney’s Competitors

J.C. Penney

J.C PENNEY’S MAJOR COMPETITORS GROSS PROFIT (2012)

(*USD in Millions)

new retail strategy
New Retail Strategy
  • Improve declining sales
  • Salvage a brand that has flopped
  • Three elements:
    • Pricing changes
    • New logo/spokesperson/marketing
    • Reinvented shopping experience
1 pricing changes
1. Pricing changes
  • Moving away from frequent and deep discounts
  • Three tiered pricing structure:

1. Everyday prices

2 . Month long value

3. Best prices

implications of partnership
Implications of Partnership
  • Overlapping Target Market
  • JC Penney financial record is risky
  • Could revamp entire department store business model
expected results
Expected Results
  • Other fashion boutiques report promising early results
  • Industry experts expects Partnership won’t gain traction until the second half of the year
conclusions
Conclusions
  • Action was necessary ( history, declining market share)
  • Fits well with marketing strategy
  • Gives the company a unique position