Internal Analysis of Jcp

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Assignment #2- Internal Analysis of JCPenney J. C. Penney (JCP) has remained one of the most valued retailers in the United States due to its careful attention to customers' needs, in the past few years J. C. Penney has implemented a new pricing policy in hopes of keeping their edge. When JC Penney replaced its longstanding promotional pricing strategy with an everyday low pricing strategy, sales plummeted. The store typically attracted bargain-aware customers, but these consumers did not immediately associate the chain's new pricing strategy with low price and good value, despite the fact that it was heavily marketed in these terms. Still the company maintains a Price/Earnings ratio of 52, above the average retail industry P/E ratio of 42.7 and above the S&P 500 P/E ratio of 17.7. The company is leaving no stone unturned to become cost resilient, and is focusing on closing underperforming stores and exiting its catalog business. In order to enhance customers’ shopping experience, J. C. Penney is focusing on remodeling and renovating stores as well as refreshing its website functionality, considering the steady increase to online shopping. The launch of fascinating new merchandise and the JCP rewards program should also perform well; likewise the in-store Sephora departments continue to draw younger and more affluent customers. The key success factors within J.C. Penney retail industry are economies of scale, lower input costs and the investment in their brand image, staying on top of these key success factors allows J.C. Penney to stay one step ahead of the competition and gives them a competitive advantage. In order to better analyze, the strengths and weaknesses of J.C. Penney against another competitor in Dillards, we will use financial ratios to look at how both companies operate and utilize their resources and capabilities. First, we will look at current

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