J. C. Penny

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

The overall threat of new entrants in the retail market is a high level threat as it is relatively easy and inexpensive to enter

Trader Joe's faces several threats to its business, as competitors try to invade the company’s niche and attempt to imitate the company’s core strategies. The supermarket industry itself faces a major threat, as larger chains such as grocery retailers Wal-Mart and Tesco have begun to open small-format stores that mimic the Trader Joe's approach. This invasion results in additional cost pressure for incumbents like Trader Joe’s, which had to let go employees in order to become more cost competitive.

Competitor analysis is a serious part of the organization therefore; Target must identify and address all issues pertaining to the business. Target must pinpoint the tangible competitors, and substitutes, evaluate opponents’ objectives, strategies, strengths and weaknesses, and opportunities and threats, and uncover what opponents Target should take on or stand clear of. Therefore, Target must analyze the company’s economic, sociocultural, technological, political, and future.

More recently, the recession impelled many bricks-and-mortar retailers towards a damaging focus on discounting that eroded not only many stores’ price positioning but also any point of differentiation or exclusivity.

The intensity of rivalry and the threat of substitutes are strong components for J.C. Penney to consider as they continue to strive for increased revenue and market share. Their two primary competitors are Macy’s and Kohl’s, both of whom have fiercely competitive strategies to be strong retail operations. For instance, while Macy’s offers a multitude of promotional deals and is working hard to choose products based upon demographics and geographic segmentation, Kohl’s is attempting to reduce their inventory levels and improve their marketing strategies in order to become a stronger competitor in the department store segment of the retail industry. In order to compete with their competitors, J.C. Penney aims to focus on their previously successful promotions and home department segmentations by bringing in new reputable designers in order to attract a larger customer base. Due to the fact that the intensity of rivalry and threat of substitutes are both moderately strong in the retail department store industry, J.C. Penney ought to be diligent in their implementation of strategies in order to achieve success in the retail business.

Threat: Forces shaping the Nordstrom’s strategy is that it is operating in highly competitive environment, where apparel sold by it is not only competing with large organized departmental chains but, also from small independent boutiques in the U.S. As a result competition has become very stiff in retail

The first of Porter’s Five Forces that impact Costco is the threat of new entrants. The threat of new entrants into the wholesale and membership retail space is low. There are several reasons why the threat of entrants into the market is low. The leading reason why the threat of entry is low is because an emerging company will struggle to have the volume necessary to compete with Costco. Costco is the sixth largest retailer in the U.S. As a major retailer, Costco has the highest discounts on a majority of its

As one of the major retailers in the United States, JCPenney has 1,104 department stores in 49 states and Puerto Rico as of February 2, 2013. The key success of its business is tremendously depending on the sales performance. However, the retail business is highly competitive, with low barriers to entry and low profit margin. Due to large sales plunge in 2012, the company is in financial trouble. The thorough analysis of JCPenney’s financial statements is vital to judge the future performance of its business.

The industry does not possess major threat from new entrants due to strong barriers to entry and strong competition for retail space. There is also a strong rivalry between competitors as limited space is being contested by major players alongside

New Entrants – The threat of new entrants is moderate. Moderate because of the high cost of entry, but the relatively successful business model Best Buy has outlined.

Bargaining power of suppliers. Suppliers have the ability to leverage, control, and negotiate the cost of their products (Hill et al., 2015, p. 56). In the case of the suppliers of the office supplies industry, more so for Staples, the bargaining power is weak and is considered to be low. The reason for its power being weak is a result of large companies having several suppliers that will easily compete against each other to provide the lowest cost of products.

Increasing competition from Scrambled merchandising from Canadian tire & dollar store chains. Increasing competition is putting a pressure on profit margins as well.

The bargaining power of suppliers is medium. Since corporates conditions vary, whether the power of suppliers is strong should be determined accordingly. But to survive in the online retailing industry, keeping a close relationship with the suppliers is imperative. Many of the multi-national companies in the industry is depending on limited numbers of suppliers that are concentrated in production, differentiated in products, and not heavily relied on a single industry, which give them great bargaining power and can better facilitate the corporations’ success. Small companies may not have established such strong alliance with its vendors.

| * Having very little financial resources can leave Fresh Connections susceptible to the business uncertainties of this industry * Currently highly dependent on a stagnating market segment as Retail make up half their sales