Jcpenney vs Macy's Essays

5169 Words Dec 22nd, 2012 21 Pages
JCPenney: Every Day Low Prices
Versus
Macy’s: Differentiated and Localized

11/29/12

Executive Summary
The industry we have chosen is the department store-retail industry. Within this industry, we have chosen the department stores of JCPenney and Macy’s. We find this industry, as well as these two companies, interesting from a strategic perspective. JCPenney has recently undergone a massive strategic restructuring in regards to its pricing, brand offerings, and store layout, pushing it away from the typical department store strategy of discounts and coupons. Its new strategy has become much closer to Wal-Mart’s strategy of every day low prices. Macy’s, on the other hand, has restructured with a push from the economic
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Economic: The poor economic climate in the United States may continue to adversely affect the department store-retail industry for many years as the unemployment rate remains higher than average. This can hinder industry profitability due to lack of disposable income for consumers and reduced consumer spending.

Socio-Cultural: The decrease in consumer’s household income is a factor that can greatly impact the industry. According to USA Today, “The typical household has lost ground in seven of the past 10 years and now takes in less cash than it did in 1996 when adjusting for inflation” (Cauchon & Overberg 2012). This decreasing trend may continue in coming years. In addition, the age of the population has been steadily increasing, and this is another factor that will influence the industry and consumer buying habits in future years.

Technological: Many technological factors can influence the industry over time. This industry is heavily dependent on technological advancements in efficiency and operations, including information technology, inventory, and supply-chain advancements. This trend will continue to be of importance to the industry. In addition, online sales will continue to increase, resulting in more developments in internet processes in the future.

Environmental: Fluctuating weather patterns and the need for certain seasonal items make it difficult to predict availability of resources from outside the country in an economy that has

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