Case Study Analysis and Solutions

Case ID: 514063

Abstract:
Case Solution & Analysis for J.C. Penney's "Fair and Square" Strategy (Abridged) by Elie Ofek, Jill Avery
As he gets ready to release 2nd quarter 2012 results, Ron Johnson, the new CEO of department store J.C. Penney, is reconsidering the dramatic changes he initiated for the business model and brand image of his company. A new pricing scheme he put in place in February, dubbed "Fair and square", was a central component of the new strategy. The scheme initially had three pricing tiers and eliminated typical sales promotions in an attempt to simplify the shopping experience for consumers; thus moving J.C. Penney off its previous high-low pricing practice. Other components of the new strategy included a new store layout, the inclusion of several well-known brands, and having special lines designed by well-known designers. However, troubling first quarter results that continued into the summer months seemed to indicate that J.C. Penney shoppers, accustomed to receiving JCP Cash coupons and circulars advertising the week's specials, were slow to embrace the new pricing format and began leaving the retailer in droves. Under enormous pressure to turn things around as the all-important back-to-school and holiday shopping seasons were imminent, Johnson decided to make adjustments to the initial pricing scheme that were set to go into effect August 1st. Were these changes enough to turn things around? Should Johnson stay the course on the other elements of his repositioning efforts? Is Johnson's experience in setting up Apple stores helping or hurting him as he tries to achieve his goal of making J.C. Penney "America's favorite store?"

Keywords:
Advertising, Advertising strategy, Agile software development, Branding, Brands, Breakeven analysis, Business models, Cause marketing, Change management, Consumer behavior, Cross functional management, Cross functional teams, Decision making, Execution, Incubators, Marketing, Marketing strategy, Organizational behavior analysis, Prices, Valuation, J.C. Penney's Fair and Square Strategy Abridged Case Solution

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