JC Penny recently announced that instead of having massive sales discounts, they would move towards an everyday low-price strategy. This seems to apply to Porter's competitive advantage framework.
JC Penny traditionally has had a broad customer focus and a product differentiation strategy through its private label brands. With a lower everyday pricing model, it will shift towards a low cost, broad market strategy. This strategy seems to have some advantages and disadvantages. Its advantages are that it can appeal to the price-sensitive groups by not making them wait for the huge discount sales. On the other hand, if they drop some of their private label brands because of lower sales prices, they may lose customers who feel that JC Penny represents value and quality. Also, price-sensitive shopper who get exciting about huge 50% off sales may be turned away from JC Penny because there is not as much perceived value in the everyday low prices.
No comments:
Post a Comment