J.C. Penney Company, Inc. is a holding firm with the main operating subsidiary known as J.C Corporation, Inc. The company sells accessories, family apparel and footwear, beauty products, home furnishings, and fine and fashion jewelry in its department stores in America and Puerto Rico. Since its inception, this company has grown to become a major retailer that operates approximately 1,106 department stores by the beginning of 2011. The business of this firm basically consists of selling their products and services through the numerous stores and its online business strategies. This growth has resulted in the company to be ranked as America's largest department-store retailer and catalog business.
Mission, Vision, and Primary Stakeholders of J.C. Penney:
The vision of J.C. Penney Company, Inc. is to become America's shopping destination for inventing great styles at reasonable and attractive prices. This vision is centered on the company's long-range growth initiatives that consist of four integrated business strategies in order to increase its sales, improve its financial performance, and achieve industry leadership. The company's mission is to provide merchandise and services to its global customers at a profit in ways that are consistent with its ethics and responsibilities.
In order to fulfill its vision and mission, J.C. Penney Company, Inc. has several stakeholders that are integral to the success of its operations and profitability. Some of its primary stakeholders are its customers who are its main focus because of the role they play in the effectiveness and profitability of the firm's operations. Since customers act as the lifeblood of this company, it's committed to serving them with quality, smart, and stylish products at reasonable prices. The second primary stakeholders are its diversified supplier base that consists of both domestic and foreign suppliers as the firm is not highly dependent on any single supplier. The other primary stakeholders are its stockholders and investors who also play an integral role to J.C. Penney's profitability in the market.
Competition of J.C. Penney Inc.:
J.C. Penney Company, Inc. operates in the highly competitive business of marketing and services that consists of numerous competitors including Kohl's, Stein Mart, and Dillard's. The competitors within this industry compete for market share depending on brand image investments, economies of scale, and tight cost controls. The five forces of competition for J.C. Penney, Company, Inc. In its business based on an industry analysis are & #8230;
Rivalry among Existing Competitors:
As previously mentioned, this industry is highly competitive with numerous competitors that require companies to aggressively concentrate on merchandising to attract customers and capitalize efficiency in its entire supply chain. Since these companies are competing for the same customers, rivalry among existing customers is a huge force of competition. The success of the firms in this industry is affected by huge economies of scale, high concentration, and lower fixed to variable costs (Bartholomew et. al, 2007).
Threat of New Entrants:
As this sector is highly concentrated with large and small competitive companies, successful department stores have long histories because they have discovered means of thriving in the stagnant industry. While the survival of new entrants is highly unlikely because of various factors, the threat of new entrants is a competitive force for J.C. Penney.
Threat of Substitute Products:
Since this sector is highly competitive, the threat of substitute products will be a constant competitive force for the company. Buyers switching costs can be regarded as low because businesses by department stores serve the same purpose. However, J.C. Penney Company, Inc. faces a moderate threat of substitute products because it targets mid-income families.
Buyers' Bargaining Power:
The overall business strategy of a company is greatly influenced by the bargaining power of consumers. While a higher bargaining power of buyers enable a firm to compete on price, low bargaining power of buyers don't typically influence a firm's business operations. This sector is mainly characterized with relatively lower bargaining power of buyers.
Suppliers' Bargaining Power:
Similar to buyer's bargaining power, this sector is marked with little bargaining power for suppliers since they provide small amounts of inventory. However, J.C. Penney experiences high supplier's bargaining power because it carries exclusive brands in its stores.
Given that these five forces of competition have an impact on the formulation of J.C. Penney's business policies and strategies; it has a major impact on the firm's overall profitability in the highly competitive industry.