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Market Forces Proves To Be Too Powerful For Ron Johnson And The Apple Ways

|Includes:J.C. Penney Company Inc. (JCP)

So what really did Ron Johnson in at J.C Penney? Was Ron Johnson really that bad of a CEO at JCP? He certainly has the resume that look good on paper. In his past two jobs, he executed two seemingly opposite strategies with great success. As the vice president of merchandise at Target he was part of the team that moved Target into cheap but upscale look. Then at Apple, he was said to be the creator of the "Apple Store" and the "Genius Bar". I see him as a person with the capabilities to operate in the tough retail markets. So how did he flop in the most spectacular manner?

Unfortunately this is one environment where Ron Johnson's success in going in headstrong with the Apple Mentality got disastrous results. This is pretty evident in his style of management post Apple that he operated much like Steve Jobs in Apple. The Culture in Apple has slowly surfaced since the death of Steve Jobs that they are headstrong and unyielding. They will force their opinion to oppositions. Under the vision of Jobs, this worked wonders where we bought things after being educated on how we can't live without it.

JC Penney is in a deep downward spiral with brutal competition, humorously price sensitive customers, and a synonymous brand with low end retail. JC Penney has been in decline before the 08 recession, and they never picked themselves up since 08. The company itself couldn't do much to change direction internally, and now they could be on borrowed time. JC Penney is really up against the wall, and they're running out of time.

Johnson's team came in with "his way or the highway" attitude shook up the entire company only to realize that the market is so entrenched with JC Penney's perception. They lost the core with his brand new untested promotion strategies and can't attract new target. Employees within were hard to coordinate from the infighting resulted in inconsistent stores across the channel. All of this led to the epic failure of the coupon less campaign followed by the abrupt reversal. Then the final nail in the Johnson coffin came with legal action by Macy's.

One can argue Johnson is forced to take drastic measures by implementing without testing, or power through deal with Martha Stewart despite her exclusivity with Macy's. Even though he's a great merchant, he is just not suited for this market anymore. In this market, he is the might oak only to be blown over by a storm. Maybe the next CEO can be more flexible and recognize when to yield like a willow tree.
Like in the fable; the willow said to the Oak: "We on the other hand, have not resisted the winds, but have always bent with them. We recognized the superior power of the wind and so, the harder the wind blew the more we humbled ourselves before it."

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: JCP