J. C. Penney: The "Think Big" Strategy

22 Pages Posted: 30 May 2017

See all articles by Paul Farris

Paul Farris

University of Virginia - Darden School of Business

Sylvie Thompson

University of Virginia - Darden School of Business


This case is used in Darden's required EMBA first-year Marketing course. It can also be used in course modules covering Pricing or Brand Management. In the case. a financial analyst considers a presentation by an investor in J. C. Penney and the implications of the company's turnaround strategy. This case provides an alternative approach to the market positioning discussion in the two-part case, “J. C. Penney: Reinventing Fair and Square Deals (A and B)” (UVA-M-0835 and UVA-M-0836). It includes the views of the CEO of Pershing Square Capital Management, who holds more than 18% of the company's stock and believes the company is poised for a major turnaround.



Rev. Apr. 11, 2014


In late June 2012, Morgan Garcia, a senior financial analyst based in New York, had about a week to submit her report on J. C. Penney (JCP). In January 2012, Garcia had joined the investment bank's retail industry group. Her first major assignment was to generate a report on JCP, and she had welcomed the assignment. JCP was undergoing significant changes, so it was a chance for her to highlight her skills as an analyst to her new boss.

The main objective of her report was to provide an independent assessment of JCP's new strategy in light of the “Think Big” presentation given by Bill Ackman on May 16, 2012, at the 17th annual Ira Sohn Investment Conference in New York, a day after the release of JCP's quarterly earnings. Ackman, founder and CEO of Pershing Square Capital Management, held 18.3% of JCP shares and was its single largest investor. As a keynote speaker, Ackman argued that JCP was set for a major turnaround and that its stock was significantly undervalued.

Garcia had obtained background information on JCP by studying public records and company filings. She had also reviewed the company's exciting new management team. Over the previous six months, as part of the retail industry team, she had participated in several major retail events including JCP's January 2012 “In Praise of Fresh Air” event at which it launched its bold new strategy. As part of her assessment, Garcia had to critique its new strategy, including its daring new pricing program. She had worked her way through all the information she had gathered but she still had questions. Could a return to JCP's roots of “Fair and Square” pricing revitalize sales? Was it the right time to execute a major pricing strategy shift, or would it be better to wait until the new store format was rolled out? Were the shocking first-quarter results for 2012 an indication of a fundamental problem with the strategy or just a temporary dip before the turnaround took hold as projected by Ackman? And most important, could Ron Johnson, JCP's new CEO, return JCP to its historical place among the ranks of America's top retailers?

. . .

Keywords: market positioning, turnaround strategy

Suggested Citation

Farris, Paul and Thompson, Sylvie, J. C. Penney: The "Think Big" Strategy. Darden Case No. UVA-M-0841, Available at SSRN: https://ssrn.com/abstract=2974709

Paul Farris (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-0524 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/farris.htm

Sylvie Thompson

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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