The result was lower profits, falling share prices and loss of credibility and creditworthiness in the market.This is a small-time, single store, highly successful furniture seller that markets several branded furniture items and has grown gradually to a highly profitable position over thirty years. Having one outlet, supported by relatively small storage capacity, it has managed very well through good supply chain management and by offering immaculate and timely services to its customers. It is actively planning to double its capacity by adding another store of a similar size at a nearby location which is to be financed through internal accruals. While the plan was on hold awaiting the return of its single owner, news came that IKEA of Sweden was planning to open a huge store with all its customary contemporary furniture along with an enormous warehouse. IKEA is also known to offer comparable quality at 70 percent fewer prices to the customer. This will indeed be a massive competition to Comfort Zone and about seven or eight other similar stores in the same town. In the case of both J.C.Penney and Comfort Zone, the need for competitive advantage has become a question of survival. The problem is finding which of the prescriptive schools suits the situation to make sustainable strategies for gaining competitive advantage.Markets are heterogeneous and companies, irrespective of size and area of operation, need to remain competitive in order to survive and make profits for their owners. Companies need strategies following which competitive advantage can be gained.Environments have a great impact on companies. A strategy is a reaction or response to these external and internal situations. Ansoff et al (1976) state that, amongst other things, responsiveness to the problems is what strategy is all about. The aggressive response to competition, the sublime response to the customers, the firm but a fair response to the managers and workers are but a few ingredients of strategy.
Strategic Management of J C Penney and Comfort Zone