Historical background: 1902–29 Commented [K1]: Remove this? Add dates to the subtitles?

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Penney for Your Thoughts? The Rise of a Business Empire Commented [K2]: If this article is directed at, say, modern
entrepreneurs and what they can learn from history—
specifically J. C. Penney—then the established structure of
1902: A market in the Wild West business principles could work. (I’m a fan of wordplay, so if
not this, then select a title that clarifies exactly what the
In the dawn of a new century, an ambitious young man cashed in his life savings and took focus will be.)
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out a business loan. With his wife and baby, he come out West, chasing prosperity. He Deleted: b
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opened a dry goods store on the high plains. He had several partners, which he soon Formatted: Font: Italic
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bought out.
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James Cash (J. C.) Penney had a dream and a business model for a market in the final Deleted: had
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days of the American frontier. The West was wild, especially for this Midwestern farm Deleted:
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boy. Folks still remembered the great buffalo herds, and running into an occasional Deleted: m
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grizzly bear outside of town was not unheard of. Butch Cassidy, the Sundance Kid, and

Kid Curry were the most wanted outlaws in America. And Tom Horn, the famous Deleted: North

Apache Scout and stock detective, was being tried several counties away for his

murderous participation in a cattle war.

The young businessman had chosen to open up his storefront in a boomtown that was a Deleted:

natural crossroads. It was a hub for mining, ranching, and bootleg liquor.

1903–12: A successful business model Formatted: Font: Italic

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Unless customers traveled to a large city or made their own clothing, local options in

Western towns were quite limited. Buyers could deal with the impartiality and delivery Deleted: rather

schedules of Sears and Roebuck mail order, the five-sizes-fit-all general store selections,

or the expense of local dress and suit shops.

Penney’s operating philosophy was simple: buying clothes should be a personal Deleted: JC

experience. He opened early and closed late. Come into his store, see the displays, get a

feel for the merchandise, and try something on. He offered options, variety, sizes, and

quality. There was no haggling on the cost of an item because he felt his prices were

fair—a square deal if you will. His stores were a hit with shoppers who were used to a Deleted: ,

spectrum of fluctuating price points on clothing and household items.

There was no store credit, so he could keep prices low, avoiding extra bookkeeping and

collections hassles. Such practices also allowed a good credit rating with local banks. Deleted: a

Penney’s friendly and timely way of doing business quickly caught on with a new Deleted: The young man’s

segment of mid-level buyers in the Rocky Mountain West. He targeted hardworking men

and women and their families: miners, laborers, tradesmen, farmers, ranchers,

housewives, children, and office workers.

He took a keen interest in what his customers were thinking. Feedback from customers Deleted:

was a key component in his evolving model. Penney felt it was critical to know what his Deleted: JC

customers were thinking and how he could improve his service.

1913: A code of business ethics Deleted: .

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Within a decade, he had opened thirty-five stores. He moved his growing operation to Deleted: 35

Salt Lake City, Utah, so he could more effectively manage marketing and distribution Deleted: ,

networks, as well as control price points. Deleted: nd

Of course, he recognized the advantages of syndicate buying power. But this would be of Deleted:

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little importance if consumer value was lost. It was imperative all his stores reflect his
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philosophy of Golden Rule business. Long before it was fashionable, Penney built a code Deleted: r
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Deleted: the young businessman
of ethics into his model that stores, management, employees, products, and pricing had to Deleted: must

reflect. Discussing the morality of doing business was a revolutionary concept that would

not be fashionable until the 1970s. Thus, in 1913, at a conference with his managers, he

introduced what was called “the Body of Doctrine,” or the Penny Idea. Several take away Deleted: T

points included: Deleted: are

• Serve the public. Deleted: 1)

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at: 0.25" + Indent at: 0.5"
• Expect a fair remuneration, but don’t take too much profit.
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• Pack the customer’s dollar full of value. Deleted: ‘
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• Train yourself to serve. Deleted: 4)

• Square your actions with what is right and just. Deleted: 5)

• Give back to community. Deleted: 6)

• Provide a high-quality product for less. Deleted: 7)

1914: Profit sharing, private brands, and partners Commented [K3]: Combined this and the following section.
Driving idea being offering incentives to employees and
customers?
Managers would be paid little more than clerks during the business year, and usually out
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of cash flow. However, they would share one-third of the end-of-year profits. But there Formatted: Font: Italic
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was an incentive to expand, since each manager was expected to groom good candidates Formatted: Font: Italic
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and training them. When the new “first man” was ready, he would in turn open up his Deleted: him

own store, and the training manager would therefore receive one-third of the profit from

the new store.

Penney acquired smaller companies and expanded to fuel his growing business. He Deleted: Private brands.He
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started his first private brand, Marathon Hats, in 1914, because suppliers would not give

him the quality-of-product. The lesson was well learned.

Private branding became a critical part of his company’s DNA for the next hundred Deleted:
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years. It gave the business precise marketing advantages and quality control. This Deleted: his company

cornerstone strategy included Big Mac, Penco, Waverly, Towncraft, Fox, Hunt Club,

Stafford, and St. John’s Bay. (As a point of interest, the Waverly cap ad in 1930—at the Deleted:

height of the Great Depression cost $1.98—boasted sales of over 500,000.) Deleted: ,
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1917–25: Retail is detail Deleted: .

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In 1917, Penney moved his corporate headquarters to New York City to be in the nation’s Deleted: he

trade center. He was also closer to banks, raw materials, labor, manufacturers, and

shipping. The move allowed him to be at the center of fashion so that his lines could Deleted: It also

reflect the new designs. Making decent clothes for the working class did not necessarily

mean the consumer had to sacrifice style.

In 1925, the chain had ninety-one million in sales. In spite of his success, however, Deleted:
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Penney never lost his hands-on approach. For him, retail was always about the details. He Deleted: JC
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used the family washing machine in the evening to see how many times he could wash a
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fabric or garment before it faded or showed signs of wear. He took a personal interest in Deleted: ”
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manufacturing and selecting what his stores would carry. He also kept in touch with

customers so stores could offer what was needed. Deleted: his

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1929: A business empire Deleted: .
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Before the Great Depression in 1929, Penney had opened a thousand stores and had a Deleted: d
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long-term goal of a billion in sales by the 1950s. The chain had gone public after store
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managers exchanged their percentages of ownership for stock. Because of private brands Deleted: felt
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and good management, the retailer managed to make a profit during the Depression. On Deleted: d

the eve of World War II, there were 1,600 stores in 48 states. Deleted: the second w
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• Some of the sections could be combined or extended, specifically profit sharing,

private brands, and the ending business empire. The private brands section seems

to have the least direction and purpose currently.

• Needs an introduction and conclusion that clearly state a main purpose. What we

have so far is a historical look at successful business principles that are just as

relevant now as they were then, when J. C. Penney employed and normalized all

these. This is a possible structure and direction:

o Introduction (establishing importance of historical reflection and suggest

the direction of the piece)

o Finding the right / unexplored market

o Establishing a company culture

o Creating a code of ethics to follow (setting expectations)

o Offering incentives (to customers and to employees—combine the two

sections: profit sharing and private brands)

o Being invested, attentive to detail, and involved

o Conclusion (show success of principles and practices of Penney, even with Formatted: List Paragraph, Bulleted + Level: 2 + Aligned
at: 0.75" + Indent at: 1"

the onset of the Great Depression, so we could stand to learn from Penney

and remember what he contributed to the world of business)