Turnaround of JC Penny
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Case Details: |
Price: |
| Case Code |
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BSTR160 |
Electronic Format: Rs.
400;
Courier (within India):Rs. 25 Extra
Themes--- |
| Case Length |
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14 Pages |
| Period |
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1990 - 2005 |
| Organization |
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J C PENNEY |
| Pub Date |
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2005 |
| Teaching Note |
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Available |
| Countries
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USA |
| Industry |
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Retailing |
Abstract:
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The case looks into the problems faced by J C Penney in the late 1990s and the
changes brought about by the company in the early 2000s. J C Penney, which used
to be a leading retailer in the US, was not able to adapt itself to the changing
business environment of the late 1990s.
The growth strategy, which had made the company successful, became a barrier for
its effective functioning in the late 1990s. To turn around the company, J C
Penney moved from a decentralized merchandising system to a centralized
merchandising system, revamped its HR practices by aligning the HR practices
with the business goals, sold off its drugstore Eckerd in order to focus on its
core business, and repositioned itself as a trendy, yet value offering retailer.
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These restructuring initiatives resulted in increased revenues for the company and improved stock values from $10 in 2000 to almost $50 in 2005.
Issues:
» To understand why companies bring in outsiders at senior management levels at
times of crises.
» To understand why companies need to change with changes in the external
business environment.
» To understand how changes in the external environment force companies to
undertake organisational changes.
» To understand the need for companies to adapt to the changes in the
technological environment.
» To understand the need for aligning people practices like compensation plans
with the business goal of the company.
» To understand how 'focus' on core business can be used as a strategy to
improve the performance of the company.
Contents:
Keywords:
JC Penney, US retail industry, JC Penney Direct, Centralised
merchandising system, Decentralised merchandising system, Inventory management,
Wal-Mart, Catalogue sales, LVMH Moet Hennessy-Louis Vuitton, Eckerd drugstore
chain, Compensation programme, Sears, Roebuck & Co, Retail environment,
Restructuring, James Cash Penney, Merchandising System, JCP, General Merchandise, Stock, York Stock
Turnaround of JC Penny
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