Earlier this year I commented on a decision by Panasonic to rein in R&D; investment in flat-panel televisions and instead expand its reach into the entry-level market (see “Is Panasonic Kissing Its Future Goodbye?”).

The company appeared to be eyeing significant market share opportunities offered up by the 2009 conversion to digital TV in the U.S. It was a bold move, because while it’s easy to cash in your brand equity and go down-market, once the decision is made it’s nearly impossible to reverse course.

Last month another famous brand made that fateful choice. Liz Claiborne, Inc. agreed to license its namesake brand exclusively to J.C. Penney, ending decades-long relationships with department stores like Macy’s, Dillard’s and Bon-Ton. The Claiborne brand has long been in decline, and a Macy’s spokesperson said the retailer could no longer justify expanding the line because of customer confusion between it and the “Liz & Co.” sub-brand that was being sold exclusively at–you guessed it–J.C. Penney.

The Claiborne brain trust may have created their own problem by overextending the brand, a common manifestation of the loss of focus that afflicts many stalled companies. That said, this new decision may work out. It’s not the first time J.C. Penney has partnered with respected, high-profile designers (Polo Ralph Lauren and Nicole Miller, to name two), and Penney is doing better than many of its rivals in this tough economy.

As with Panasonic’s decision, however, this one will be interesting to watch, and will serve as yet another object lesson for any company struggling with stalled growth. Going downscale–where all the value-conscious buyers are these days–can be extremely tempting. But if you do it, make sure you’re extremely comfortable with your decision. There’s no turning back.

Yesterday I had the pleasure of visiting with Tom Keene and Ken Prewitt on Bloomberg radio about the principles in When Growth Stalls (click here to listen). During the course of the conversation, Ken brought up the loss of focus principle in the context of department stores.

My mind immediately flashed on an article that appeared Wednesday in the Wall Street Journal about how Macy’s is “picking at the bones of fallen competitors” by stocking its formal rivals’ most popular products. It’s a profitable yet potentially risky strategy.

For example, the company is expanding its selection of bridal products in the wake of New York furniture and jewelry retailer Fortunoff’s bankruptcy (and considering offering patio furniture, which Fortunoff moved by the truckload). It’s also stocking additional cosmetics in its West Coast locations following the demise of Mervyn’s, and adding premium chocolate and more “moderately priced apparel” in Pittsburgh based on products offered by retailers that have bitten the dust there. All of this in addition to the company’s “My Macy’s” initiative, which already allows local stores to customize up to 20% of their inventory to suit local tastes.

Hmmm. I smell danger. Stepping into the breach of a dynamic competitive marketplace in order to gain market share is smart. Stocking merchandise just because you can sell it is playing with “loss of focus fire,” something with which department stores naturally struggle. If Macy’s isn’t careful, its iconic brand could get burned.