Applied Strategy--Current Event-J.C. Penney takes Stake in Martha
Stewart Living
Martha Stewart has joined in a partnership with JC Penney
stores to make her products more readily available to a wider variety of
customers. Martha Stewart Living
products were originally sold in Macy’s stores and still are at this point. But she was recently allowed to serve on the
Board of Directors of her company after being banned from serving for five
years. She has now joined her Board of
Directors again and although she isn’t taking a lead role she is very active in
the decision making process and the development of marketing strategies. Now she has decided to make some strategic
moves to boost her sales by entering in a multi-million dollar deal with JC
Penney stores. JC Penney has agreed to
this deal as well, as a positioning strategy to make their store an American
favorite in the line of retailers. This
is a ten year deal between the two that they are hoping will reignite their
brand that recently had been experiencing a slump in sales.
Martha Stewart as well as JC Penney’s has hired well-known
top executives to serve on the Board of Directors and help run their companies
and oversee the partnership between the two.
Her products should begin selling in February 2013 with JC Penney’s
installing mini-stores within their own stores so that customers can easily
access her products. Her products will
also be sold on her website. Martha Stewart will still remain marketing her
products in her other stores as well. JC
Penney’s will hold 12 percent of the shares in her company. JC Penney’s has previously made a similar
move by housing Sephora stores within their stores and that was a successful
move for them. So they plan to have a
similar success with the partnership with Martha Stewart.
Martha Stewart seems to be determined to make her brand a
household name with her products being marketed and sold in Target, Home Depot,
Macy’s, PetSmart and now JC Penney’s. JC
Penney’s is also making strides to bring high sales and more customers back to
their stores by bringing in a brand that people are already familiar with. There is one risk and that is that Macy’s
stores that have been carrying her products for quite some time isn’t too happy
with her recent partnering with JC Penney and is looking into whether or not
they will continue carrying her products.
So there was a risk in making the new partnership decision. But with careful marketing and having good
strong executives brainstorming the strategies, whether or not Macy’s decides
to carry on won’t hurt the sales volume or profits of Martha Stewart’s line.
The implications of the outcome of this is to bring two
familiar brands together that will play off of each other popularity to boost
the sales for both companies. Practicing
managers should watch the positioning and applied strategy that is going on and
learn from the benefits as well as the mistakes in this deal.
