Jcpenney

1. General Environment

* Technological segment (new technologies): neutral effect. Online shopping tool creates the opportunity to promote a business and generate additional sales and also increases the competition.

* Economic segment (inflation/ saving rates): negative effect. When facing financial recession and uncertainty in terms of disposable income, consumers tend to reduce spending.

2. Industry Environment.

* Intensity of rivalry among competitors: high effect. Competition from well established brands in industry that is able to effectively implement cost leadership strategy. .

* Bargaining power of buyers: moderate effect. Switching costs are low and allow the customers to change to different product.

* Threat of substitutes: high effect. Online shopping is very popular and gives people easy access to different products and allows price comparison.

* Threat of new entrants has a low effect. Due to the long history of existing department stores and well established brands entering a market and founding a new brand is very hard.

* There is a moderate level of attractiveness for existing rivals. Current competitors understand the need to create value through the cost leadership for its customers and thus seek ways to increase their competitive advantage.

3. Major Competitors

* Sears: highly diversified portfolio for customers. In future may focus more on providing lower cost clothing than on differentiating.

* Kohl’s: targeting narrow market. In future may diversify its portfolio to capture more market share.

4. Value Chain Analysis

* Operations: company puts an emphasis on upgrading the atmosphere of JCPs’ stores and creates new displays and layouts that will limit the threat of online competitors by giving customers a place where they can enjoy shopping. I think that the company is superior in this area because through its approach it is able to provide customers with unique shopping atmosphere which in...