JC Penney realigns to 'become more like a startup'

Retailer J.C. Penney recently committed to a new approach to business promotions, merchandising and pricing to improve the customer experience, with hopes of providing service similar to that of a startup.

Announced in January, the company plans to cut annual expenses by $900 million by the end of 2013, reducing expenses to below 30 percent of sales. Doing so will allow it to simplify its business model and create a more competitive operational structure with fewer layers of management, wider spans of control and greater accountability.

"Simplicity is one of the guiding principles of our transformation," said CEO Ron Johnson. "In years past, we've motivated our customers with endless promotions and discounts, and that required a lot of process-oriented work. At the new J.C. Penney, we're beginning to inspire customers with great merchandise, an exciting shopping environment and fair and square pricing."

Johnson added that the company is transitioning to a culture based on leadership. "We are going to operate like a startup," he notes, explaining that this means reacting quicker to customer issues and extending the reach of its best talent. To complete the transformation, JCP will also unveil a new logo, likely by fall 2012, NASDAQ reports.