Tuesday, June 19, 2012

Fair and Square

J.C. Penny is transforming itself from a mid-range department store into a low-cost leader.  To do this, they’ve hired Ron Johnson as CEO.  Johnson has proven himself and his strategy once before, having established Target as “cheap chic.”

The aim is to create a blue ocean amongst retail department stores, moving away from coupons and discounts.  Johnson has outlined a four-year plan that will create stores that house smaller boutiques with commodities designed especially for J.C. Penny. If Target is the trendier version of Walmart, then J.C. Penny aims to be a more affordable version of Macy’s.

Yet this transformation into a low cost leader has hit a set back with their marketing.  Michael Francis who lead the marketing strategy left the company last week.  Francis had been with Johnson at Target, yet the J.C. Penny campaign failed to resonating with the market.

Why J.C. Penny is poised to become a low-cost leader in the department store arena, what has yet to be seen is if they can differentiate themselves amongst those peers.  Or if they’ll find themselves with a new peer group by creating a red ocean with Target?

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