What we can learn from the recent JC Penney Debacle

 

What happens when plans go terribly awry as they recently did with the venerable JC Penney “strategy.”  We can learn some valuable lessons here. Especially the one about the “Retail Drug” the non-strategy “Low Price Strategy.
hbrJCP doesn’t need someone who can “execute” successfully, get back to basics, or any such thing. Just as it needed two, five or ten years ago, JCP needs a strategy. It needs to decide where it is going to play — with what set of shoppers, in what range of merchandise, through what physical and digital spaces. And it needs to decide how is it
going to provide a superior value proposition to competitive alternatives in that chosen space. This is a tough task. The department store business is a brutal one. This is not a business in which half-witted strategies can be profitable.
But if JCP doesn’t figure out an answer to these questions, it will revert entirely to the retailing drug — the “low-price strategy.” This is actually a non-strategy. There is a real strategy called “low-cost,” which can facilitate more attractive prices than competitors. But low prices unaccompanied by low costs is an approach to liquidation — which is where
JCP will be if it doesn’t start to think intelligently about strategy.