CHAPTER 1: RESEARCH PROPOSAL AND INTRODUCTION 4
Section I: Introduction to the Organization 5
Section II: Statement of the Problem 7
Section III: Research Question 8
Section IV: Hypothesis 8
Section V: Research Significance 8
Section VI: Purpose 8
Section: VII: Data Collection/Research Methods 9
Section VIII: Chapter Summary 9
CHAPTER 2: LITERATURE SEARCH 9
Section I: Literature Search 11
Section II: Comparative Company Analysis 12
Section III: Chapter Summary 12
CHAPTER 3: ORGANIZATIONAL OPERATIONS AND STRATEGIES 13
Section I: Current Company Operations 13
Section II: Corporate & Business Strategies 17
Section III: Chapter Summary. 19
CHAPTER 4: SWOT ANALYSIS 19
Section I–Internal Weaknesses and Strengths 19
Section II–External Opportunities and Threats 23
Section III: Evaluating the SWOT Analysis 28
CHAPTER 5: SUMMARY, RECOMMENDATIONS, AND CONCLUSION 29
Section I: Summary 29
Section II: Recommendations 29
Section III: Conclusions 30
CHAPTER1: RESEARCH PROPOSAL AND INTRODUCTION
Theperformance and organic growth in the management of supermarketbusiness has become a rare aspect in the modern days and for goodreasons, somewhat being acclaimed to not work. The supermarketbusiness industry has become somewhat saturated in the United States.This has been acclaimed to be due to long-standing brands andstrained amongst other aspects such as competition from alternateforms of business establishment, and in a way, leaving too littlespace to allow more new names in the supermarket industry, not onlyin terms of physical buildings and locations but also in the minds ofthe consumers and the market available. This has in turn led to theavailable supermarket chains to focus on conquering the availablemarket through the adoption of legacy brands, which also is a riskyendeavor (Samli, 1998).
Sinceits inception, Publix supermarkets have undergone massive growth anddevelopment as well as through ups and downs, and it has not immuneto the different problems that have faced the supermarket industry inthe United States. However, the supermarket chain has managed toovercome many of the obstacles, as it’s witnessed through itsgrowth from its initial store in Florida base to its today operationsin Georgia, Alabama, and South Carolina, among other states (Min,2006). What remains the big question behind the success of Publixsupermarket is, ‘how has the chain stores managed to establish asuccessful business, and how it has managed to maintain itself in themarket?
Themain focus of this capstone project is to reflect on the performanceof the Publix supermarkets in the modern highly competitive. Inaddition, the project will analyze the aspects that have contributedto the success of the chain stores, which was established in 1930,but still operates in the competitive market with other chains(Samli, 1998). Finally, the paper will focus on the business SWOTanalysis, having analyzed it from its history, to its current state.This project remains an important project for my degree as it focuseson the application of the knowledge learnt throughout my courseprogram. The project gives me the chance to put my acquired knowledgeinto practice by writing up the paper. The project will be conductedthrough dedicated research from primary sources as well as secondarysources, online library and also online sources as well. This wouldhelp to gunner the relevant information with reference to thequestion.
Proposalsummary the main goal behind researching on this subject is tothoroughly analyze the performance of supermarket chains in themodern business environment, using the Publix supermarket as thebasis for my research. The research will entail five chapters, whichwill adequately address the main question drawing in the informationfrom Publix supermarket. Each of the chapters will offer a detailedinsight into the subject providing information researched fromdifferent sources. Chapter one, will entail the proposal and theintroduction to the main project. Secondly, there will be literatureresearch, which will offer detailed insight into the business inquestion for this case (Publix Super Market, 2015). There chapterthree is organizational strategies which will entail the chosenbusiness entity operations, SWOT analysis will make the 4thchapter, and finally, there will be a summary, recommendations andsummary drawn from the information obtained.
SectionI: Introduction to the Organization
Theeffective establishment and management of supermarket chains globallyhave led to the establishment some of the prominent chain stores inthe world. Commonly known as Publix, PublixSuper Marketsisan American supermarket that has its primary bases in Lakeland.However, over time it has developed and spread into other locations,such as Florida, Alabama an among other regions. The PublixSuper Markets, Inc.wasstarted in 1930 by a man known as Jenkins George. It’s a privateform of business solely owned by current and past employees (Eastet al, 1998).PublixSuper Markets, Inc.foundedin 1930 by Jenkins W. George. ThePublixSuper Markets, Inc.hadits first store established in winter haven, Florida, on 6thSept 1930. Five years later, the 2ne store was opened in the sameregion. In 1951, its headquarters was moved to Lakeland. In the year2009, the supermarket opened its 1000thstore in St Augustine Florida. In the year 2013, the managementdecided to sell the PIX convenience stores (Eastet al, 1998,PublixSuper Markets, Inc. 2013)
Sincethe starting of the supermarket chains, the business entity continuedto expand to other parts of the country. One of the major aspectsthat should be noted is that, Publix is an employee-owned Americansupermarket. The main shareholders since the business was startedhave been its current and past employees. The supermarket deals witha diverse line of goods which are produced through theirmanufacturing facilities. These entail products such as bakery, dairyproducts, and deli. In addition, the supermarket deals with grocery,and is regarded is one of the widely recognized grocery chains in thecountry. Each of the supermarket chains dealing with specifiedproduct and services in its different departments such as seafood,meat, floral, bakery, bakery, cafes, pharmacy, and liquor (East,Hammond, Harris & Lomax, 2000).
Startedfrom a humble beginning by Georgia Jenkins together with five otheremployees, the supermarket adopted a simplified entry strategy, as itfocused to provide perfect customer services by making its employeesthe owners. The business coined a strong presence that helped it tospread into other locations after fully establishing itself in thestate of Florida. However, Publix supermarket has not had a free rideinto the supermarket business due to the emergence of other competingestablishments. Some of the business or supermarket chains that hasbeen its main competitors includes Kmart, Wal-Mart, Target, WholeFoods, Supervalu, Kroger IGA, among other upcoming and alreadyexisting supermarket chains (East,Hammond, Harris & Lomax, 2000).
SectionII: Statement of the Problem
Publixsupermarket has remained operational since its starting, however, inthe recent times there has been increased competition from otherestablished retail stores in the country such as Wal-Mart (Eastet al, 1998). This has in turn led to the review of the companiesOperatingEnvironment. Inthe fight to achieve the business competitive advantages themanagement and the business has embarked on company’s corestrategies, such as customer service, shopping environment, productquality, convenient locations and competitive pricing in order tomaintain its performance in the ever competitive environment.
Withreference to the Publix supermarket mission statement “ToBe the Premier Quality Food Retailer in the World”the business enterprise has embarked on expanding its territories toother states. The organization management has remained a key aspecttowards realization of its objectives, both short term and long termones. Customer value has remained one of the basic aspects that havedefined the supermarket chain. However, with the increase in thenumber of competing business establishment, Publix supermarket hasremained operational and performing in the market. The key questionremains what is the key aspect that has enabled the supermarketremain in the market despite the numerous handles it has faced(PublixSuper Markets, Inc. 2013).In response to the Publix initiative to overcome the challenges, aswell as its competitors, this research paper or study embarks onestablishing the strengths as well as how the supermarket chains hasremained competitive in the market. This paper focuses on anintensive research into the topic, as well as how the management hasmanaged to steer the supermarket to its current state.
SectionIII: Research Question
Withreference to the modern competitive environment in the businessindustry, is the Publix supermarket capable of successfullymaintaining and/or improving its global performance in comparison itscompetitors, overcoming its main challenge, leadership, diversity,and internal planning.
ThePublix supermarket has faced varying business challenges since itsinception. This can be traced to its ownership details, as well asleadership. This is after years of speculation, after the businesshad failed to establish a single new store for some years back. Thislack of sensitivity can be traced to the leadership of the company,and in turn possessing a threat to its initiative to win customerloyalty through its goods and services.
SectionV: Research Significance
Thisresearch remains important due to the fact that, it will helpidentify the challenges that have faced the business management, aswell as identify how to improve its operation environment so as tosustain its mission, which is to remain the premier quality foodretailer globally.
Themain purpose of this research capstone paper is to perform, andcomplete a thorough and convincing research with a thoughtfulanalysis that could assist an organization in addressing itsweaknesses, reinforcing its strengths, meeting its threats, and/ortaking advantage of its opportunities. Its main focus would be tohelp the chief management, improve the business performance globally,through minimization of the threats, and maximizing itsopportunities.
Section:VII: Data Collection/Research Methods
Inorder to thoroughly examine the primary question as per the paper,there will be detailed gathering of data. The primary methods thatwill be deployed to access the information required to write thisproject entails, analyzing online sources, such as libraries, readingof relevant literatures, journal article, use of business officialwebsite, as well as government records with reference to theperformance of Publix supermarket. In addition, qualitative approachwill be deployed. This is due to the fact that, the paper willfocuses on gaining excellent understanding of Publix Supermarket(Eastet al, 1998).
SectionVIII: Chapter Summary
Insummary, the chapter 1 one has provided an insight into the proposedpaper, what the project will address as well as introduce thebusiness entity in question, (Publix Super market). The chapter hasprovided an introduction to the Publix supermarket, what kind ofbusiness it is, development of research proposals, and history of theorganization is provided, as well as providing a statement of theproblem, hypothesis, and the research question. In a nutshell, thechapter has provided a detailed insight as to what the entirecapstone project will address, how information will be collected, aswell as what is expected from the research.
CHAPTER2: LITERATURE SEARCH
Overtime, there has been different and numerous researches that have beenconducted with reference to the performance of the chain stores inthe American market, with the main aim to focus on identifying thechallenges facing the operation environment the supermarket andretail chains has been operating. The literature review will focus onearlier conducted research addressing the same problem as identifiedin this paper. The retail food industry has over time under constantchange. The changes have been impacted by different factors such aslifestyle changes and demographic changes as well. This has in turnresulted in the demand by the organization`s management to understandthe customers. Customer service and understanding of them has becomean important aspect in any form of business than before party due tothe increased competition in the market. Customer loyalty has in turnbecome an issue for managers and the organization`s leadership towork on as increased customer turnover has become a direct impact tobusiness’s profit margins (Terblanche, 2014). Effective management,as well as customer satisfaction, has become an essential aspecttowards an effort for the supermarket chains have a competitiveadvantage over its rivals.
Themanagement and leadership of the supermarkets and retail chains havebeen felt the most effective parts towards either success or failureof a given business established. Just like the case of Publixsupermarket, different researches have been conducted to determinesimilar cases that have affected the likes of the retail chains inthe United States. One of such retail chains is the here has been thedifferent problem facing the business. One of such researches thathave been conducted is the poor customer service as per thecustomer’s complaints in the Walmart stores. According to anarticle presented on 27th march 2014, “Walmart store manager hasattributed the poor customer service to the issues of understaffing,and lack of hours for the employees to serve the customerseffectively. Walmart has been one of the most known competitors atPublix supermarket however, in the recent times it has been facedwith increased dissatisfaction of its customers (East et al, 1998).
Eachof the retail chains in operation has had different threats andperformance trend. However, Walmart being one of the renowned retailchains in the country has had to face different challenges as well.As identified, the management had to address the customer serviceaspect after the response from its store managers citing poorcustomer service to the inadequacy of the employees. The case ofunder-staffing was also attributed to the scenarios of unstockedshelves and wastage of foodstuffs. However, in November 2014, theworkers responded to the claim, which in turn prompted the Walmartmanagement to respond to the problem by introducing more workingpersonnel’s in their affected stores. In addition, the problem wasalso solved through the improvement of HR depart, as well as thecustomer care which was the most affected part of the management. With reference to the case of Walmart, the negative comments wereattributed to leadership gaps in the retail shops, which in turnaffected customer service which was as a result of executiveleadership for specific stores, in turn solving the problem of poorexecutive leadership (Terblanche, 2014).
SectionI: Literature Search
Competitionhas become an inevitable aspect in the world of business as abusiness establishment continues to fight for customer loyalty. Thiscase hasn’t been exempted from the mighty supermarket industry asmore and more chain stores continue to flock the market. This meansthat supermarket leaderships and management teams have to embark onmeasures to make their organization remain competitive in the marketby winning customers’ trust. Publix supermarket Inc. has not beenleft behind in its measures to satisfy its customers through itsstores in different states in the United States. With reference tothe hypothesis above, the competition in the market adequatelyaffects the ways in which an organization attracts and retainscustomers. There has been articles or researches conducted withreference to how the business culture of the Publix supermarket helpsto win customers. In addition, the power of the tradition ofemployee ownership has also been emphasized by the culture of Publixmanagement (Publix Super Markets, Inc. 2013).
Thethriving aspect of the Publix supermarket has been likened to beingthe opposite or contrast to the Walmart approach to the market. Forexample, despite the customer’s satisfaction being not to its bestat Publix, it is ranked number one with Publix stores by the Americanconsumer satisfaction index. In addition, the product range withinPublix supermarket has been tailored around the fast-growing localmarkets, which has in turn been more successful in comparison to theWalmart case (Hoover`s, 1996).
SectionII: Comparative Company Analysis
Inthis section, you are looking for articles on your company’scompetitors or articles on companies in similar industriesexperiencing the same type of problems you outlined in your researchquestion and hypothesis. Discuss competitor’s problem, how theproblem relates to your research, the solution implemented, and theviability of applying that solution to your organization’s problem. Remember, the focus here is to explore key theoretical concepts inthe research literature to see how they apply to other companies and,ultimately, to the situation in your company (Publix Super Markets,Inc. 2013).
SectionIII: Chapter Summary
Insummary, the 2nd chapter analyzes the literature aspect withreference to the identified problem in chapter one. It is clear notonly has the chain stores in the supermarket, faced with similarproblems such as the case of Walmart. However, different aspects havebeen devised so as to determine customer satisfaction which hasbecome an issue of concern in the supermarket industry as retailmarkets fight to win and retain customers. Customers’ loyalty hasbecome a thing of concern as management and leadership have embarkedon improving customer service.
CHAPTER3: ORGANIZATIONAL OPERATIONS AND STRATEGIESThesupermarket business in the united states has over time grown todifferent and numerous stores established in the line of publicstores dispersed all over the country’s states. Publix SuperMarkets, Inc. is one of the store chains within the business line ofsupermarkets that exists in the American network of the supermarkets,and commonly known for its unique form of ownership. The universitychains are owned by its employees, both old, retired and the new ones(Hoover`s, 1996). Publix Super Markets, Inc. has a range of productsthat it deals with, such as sells bakery products, delicacies, frozenproducts, dairy products, snacks, spirits, groceries, meat,medicines, products, seafood, lottery tickets, fuel, an artificialice, semi-finished products, as well as the financial services ofWestern Union.SectionI: Current Company Operations
a)Recent historical and current financial aspects oneof the major and primary aspects used to measure the growth andperformance of business operations and especially the retail chainsin the American market is the amount revenue realized within anygiven financial year. The more the revenue realized, the better theperformance of the supermarket. According to the company’s incomestatement, since it was started Publix supermarkets have grown interms of revenues year after year. In 2011, the company recorded anet sale of $ 26.9 billion. This increased to $27.5 billion in 2012.In 2013, the company reported retail sales of $28.9 billionindicative of a 5 % growth from the previous year 2012 which had netsales of $27.5 billion (Matsa, 2011).
Thecontinuous growth in Publix’s Financials is attributed to theopening of new supermarkets as well as an increase in the number ofsales in the already existing stores. The increased customer trafficin Publix supermarkets, stores normally due to its extensiveadvertising where the company used approximately $217.5 million in2012 and $208.3 million in 2013 on advertising alone. The inflationof food prices also helped in yielding better prices of foods in thestores contributing to an increase in the sales revenues. Comparingthe sales and profits, Publix supermarkets Inc. has outdone some ofits major competitors, which include Costco Wholesale Corporation andBI-LO Holding, LLC. However, Walmart Stores Inc. which is largest inthe food and grocery industry has outdone it in terms of revenues andprofits and, therefore, presents the greatest competition to Publixsupermarkets Inc. in 2011, Walmart recorded a total revenue of $421.8billion $26.9 billion recorded by Publix supermarkets. In 2012,Walmart had revenues of $447.0 billion alongside $27.5 billionrecorded by Publix. In 2013, Walmart earned $469.1 billion inrevenues while Publix earned $28.9 and in 2014, Walmart earned $485.7billion while Publix earned $30.6 billion (Publix Super Markets, Inc.2013).
Thegross profit for Walmart was $106.6B, $111.8B, $116.7B, and $118.2Bin 2011, 2012, 2013 and 2014 respectively. The gross profit of Publixwas $7.7B, $7.8B, $8.2B and $8.6B at 2011, 2012, 2013, and 2014respectively. This shows that the increased competition from WalmartStores to Publix supermarkets Inc. putting Walmart at an advantagewith a market share of 25.4% as compared to Publix’s supermarketsmarket share of 1.3%. However, in Florida, Publix supermarkets Inc.leads the market share commanding a 43% of the total market sharewith Walmart by having 29% and BI-LO 14% (Publix Super Markets, Inc.2013).
b)Organizational Hierarchy and Structure Publixsupermarkets Inc. has continued to grow since 1930 when it wasfounded by George W. Jenkins. The company’s goal is to continuethis upward trend of growth to reach double its size in 5 years. Thisrequires good leadership and management. The following is anevaluation of Publix’s organizational structure and management. Thecompany was founded in 1930 by George W. Jenkins. He assumed theleadership of the company after quitting his formal job. The companyis therefore privately owned since its inception up to date. At thetop management, the CEO oversees all the activities of the company.Various boards and committees also help in the development policiesand making crucial decisions affecting the company. After the topmanagement, each, the store has its own management, which isindependent, but, however, report to the same manager (Tate, 1961).
Themanagement structure of Publix before 1977 consisted of a storemanager with his/her assistant, other managers depending on the needsof the stores, departmental heads for each of the departments locatedin a single store. These departments were deli, meat, bakery, groceryand produce departments. The management structure was a bottleneckwith the store manager being on top, assistant manager followingsecond assistant manager, grocery key holder, grocery associates andthe departmental heads (Publix Super Markets, Inc. 2013).
However,in 1977, the organizational hierarchy and structure changed to PublixPremiere Leadership Structure (PPLS). The company is now organizedinto various departments. Each department contains similar workactivities, expertise, and skills and use same resources. Eachdepartment also works toward some specific organizational tasks setforward by the top management and also solves its own challenges ifany. The following 7 departments are found in each store meat,grocery, deli, bakery, pharmacy, and produce and customer servicedepartment. A store is headed by one manager known as the storemanager and is responsible for overseeing all these departments. Thisstore manager has an only one assistant. There is no second assistantmanager unlike earlier, but instead, the departmental heads aredirectly below the assistant manager. This has facilitated quickcommunication between the management and the employees. It has alsoreduced some cost in terms of salaries that would pay the secondassistant managers (Publix Super Markets, Inc. 2013).
Theuse of democratic leadership style in Publix Supermarkets Inc. haspromoted the growth of the company as well as that of its employees.The employee based structure has advocated for teamwork and democracyforming the company’s leadership philosophy. This has encouragedmost of the employees to work towards reaching the goals of theorganization. It is due to this leadership style that Publix SuperMarkets Inc. was ranked 14th of the best companies to work for(Publix Super Markets, Inc. 2013).
c)Human Resource Aspects PublixSupermarkets Inc. has employed over 168,000 people who work invarious departments in its 1,098 retail stores. The company is listedamong the best companies to work for by various magazines and studiesdue to its favorable working conditions and remuneration ofemployees. 82% of the employees at report being fairly compensatedand enjoy the working environment. The average salary falls between$25,977 to $68,405 for clerks and store managers. This is higher thanthat offered by most of their competitors with The Kroger Company,CVS/ pharmacy, and Ingles Markets Inc. pays -5% below the market(Borraz, 2014).
Thecompany has a policy of taking care of its employees believing thatthey will take care of the business in return. The employees accruevarious benefits on top of a good salary. These benefits include a 50% match to a maximum of $750 on 401K contributions. It has never hadany incidence of employee’s lay-off. It also provides flexibilityin working hours with its unpredictable shift scheduling, allowingemployees to throw in their requests earlier and adjust theirschedule to be with their families. There is also a comprehensivehealth insurance offered by the company to its employees with varioustests be offered for free on the job. Publix Supermarkets Inc. alsosupports its employee’s growth and development. This is more so ifthey need further education. The company’s reimbursement programfor all those who seek to further their studies ensures that thosewho want to advance their studies are well taken care of. The companyalso trains its employees for 80 hours annually, thus developingtheir skills. Finally, Publix has a promotion from within policywhich ensures that employees, including those in entry level jobs getpromoted over time (Borraz, 2014).
d)Legal and Ethical Issues variouslegal and ethical issues have affected the company with the mostserious one being discrimination against women. The Equal EmploymentOpportunity Council brought a lawsuit in July 1995 challenging thelow number of women in managerial positions in Publix supermarkets.This led to the introduction of an equal employment opportunity whichseeks to balance the percentage of employees in terms of gender(Publix Super Markets, Inc. 2013).
e)Technology and Information Systems Publixhas applied technology and information systems in dealing with itscustomers. The introduction of an online platform for selling groceryled to an increase in sales. The program going by the name of PublixDirect ensures that customers are able to purchase groceries fromtheir homes and have them delivered within a short while. This hasimproved the convenience of shoppers as well as saved on time andimproved sales for Publix Inc. (Publix Super Markets, Inc. 2013).
SectionII: Corporate & Business Strategies
a)MissionPublixmission is to provide the best quality food and grocery products inthe world. This is by paying attention to the customer’s needs andpurposing to meet them irrespective of cost. It also seeks to helpraise the security of associates and provide the best benefits to itsstockholders as well as be patriotic to the communities they operatein. The company places more emphasis on the quality of their productsare less on the money thus attracting customer loyalty (Publix SuperMarkets, Inc. 2013).
b)Corporate Strategy Publixplans to continue opening new supermarkets and exploring new marketsin areas such as North Carolina and Charlotte. It focuses on doublingits stores in Charlotte and North Carolina by purchasing 7 morestores from its competitor BI-LO. The company is also building adistribution center in Orlando with 1 million square foot dimension.This center will help in increasing the number of goods stored andprevent shortages (Publix Super Markets, Inc. 2013).
c)Corporate Strategy and Its Relation to Diversification PublixInc. has become diversified offering extra products that are notnormally found in other stores for example pharmaceuticals. Theopening up of new supermarkets is in line with the companies’objective of growing to twice its size by five years. The discoveryof new markets leads to an expansion of the company bringing forthbetter returns and profits. This in turn leads to the growth of thecompany and diversification of its services (Publix Super Markets,Inc. 2013).
d)Implementation Of The Corporate Strategy thecorporate strategy implementation has been successfully leading toincreased profits since 2011 to date. It added 20 new supermarkets in2012 and 24 more in 2014 as planned. The company managed to buy 7stores from BI-LO and open a new store in Charlotte in 2014 and onein Carolina in 2013 introducing its presence in the two markets. Itis through these new stores that the company is growing andincreasing its revenues year in year out (Publix Super Markets, Inc.2013).
e)Publix’s Competitive StrategyPublix Supermarket organization efforts to become a competitivebusiness, has seen the business utilize the talents of its employees.It employs professionals who meet high standards, therefore ensuringcreativity and innovation at work. It also trains its employees andreimburses those who go to school to promote their knowledge andskills. Publix also promotes its competitive advantage by focusing onquality and the needs of the customer. Finally, the provision of fairprices attracts the most customers, increasing the company’scompetitive advantage (Publix Super Markets, Inc. 2013).
SectionIII: Chapter Summary.
Inconclusion, Publix supermarkets Inc. is among the leading companiesthat retail groceries in the US. The company has managed to securecustomer loyalty due to the importance it places on quality servicesas well as being friendly to its customers over price. The companyundertakes various operations and employs various business strategiesto meet its organizational goals. It has more than 1,000 supermarketswith two-thirds of them being located in Florida. The other storesare located in Georgia, Tennessee, North and South Carolina, andAlabama. It provides a range of products which include dairyproducts, pharmaceuticals, banks, bakery products and fresh foods,fruits and vegetables.
CHAPTER4: SWOT ANALYSIS
SectionI–Internal Weaknesses and Strengths
Thefirst strength of Publix Inc. is its incomparable reputation ofpleasing the customer. The company has since its inception in 1930undertaken its operations with customer orientation focusing itsresources towards satisfying the customer needs. It is widely knownfor its philosophy to never disappoint the customer knowingly. Thishas led to an enormous recognition of Publix’s brands widely in theUnited States, which is advantageous in promoting customer loyaltyand thus ensuring consistent sales. This has ensured that Publix hasa strong market position due to its serviceability. The company isranked 86th in the 100 best companies to work with. It is also ranked8th largest privately owned American company and 7th American foodretailer. These rankings have made the company well known toAmericans and therefore giving it a competitive advantage (PublixSuper Markets, Inc. 2013).
Thecompany also has the strength of operating in-house manufacturingcapabilities. Publix Supermarkets Inc. has 5 manufacturing facilitieslocated in Florida and Georgia. In Florida, there is a dairy plant,fresh food manufacturing plant, bakery, and deli. In Georgia, thecompany has a bakery and a deli. These manufacturing facilities areowned by the company and are coupled with over 1000 distributionstores. They provide the various goods needed in the stores. Bymanufacturing some of the products they deal with, the company reducethe cost of production, thus the retail prices attracting morecustomers and improving its competitive advantage. This in returnleads to better sales and a growth in profits (Publix Super Markets,Inc. 2013). The delivery of quality products that are well renownedin the United States is another strength that the company enjoys. Thecustomer does not have to worry about the quality of Publix’s brandas they are well known to meet the required standards. It is becauseof the company’s dedication to the provision of quality productsfirst irrespective of cost that has made it grow the number of salesas well as capture a good name in the grocery retail industry in theUS.
Anotherstrength enjoyed by Publix is being the largest retailer in Florida.It commands a stunning 43% grocery market, followed by Walmart whichhas 29% and BI-LO which has 14%. This makes it a giant retail grocerystore in Florida and thus increasing its chances of future growth inFlorida more than that of its competitors. It also leads to highersales in the region as well as customer loyalty which overall improvethe profits of the company. In addition, the ideal location of thecompany’s stores is one of the strengths of Publix. The companyenjoys a favorable location of over 1000 stores in variousdemographic locations, ensuring accessibility of its products to manycustomers in various locations. The stores are found in 5 states thusreaching most of the population (Publix Super Markets, Inc. 2013).
Finally,Publix Supermarkets Inc. has the strength of a having awell-motivated workforce. This can be attributed to it being rankedthe 86th among the best 100 organizations to work for as well asfavorable working conditions and good remuneration and benefits. Themotivation of employees has made them work together as a team tofulfill the company’s goals and objectives. This in turn resultsinto innovation, and creativeness of the employees, which in turn hasled to the success of the company from the employee’s hard worktowards realization of the company objectives, and goals (PublixSuper Markets, Inc. 2013).
Finally,Publix Supermarkets Inc. has the strength of a having awell-motivated workforce. This can be attributed to it being rankedthe 86th among the best 100 organizations to work for as well asfavorable working conditions and good remuneration and benefits.There has been a positive response from the employees working in thePublix supermarkets. The motivation of employees has made them worktogether as a team to fulfill the company’s goals and objectives.This leads to innovation and creativeness in employees to the successof the company and as a result hard work ensures the organizationreach its targets (Publix Super Markets, Inc. 2013).
Thefirst weakness witnessed by the company is the negative impact of alawsuit against the discrimination of women. The lawsuit led thecompany to pay $85 million to female employees and make policychanges. The lawsuit which was as a result of the company’smanagement having only 12% women who earned 35% as compared to themale counterparts led to a damage of the company’s image with somepeople still thinking that it has gender imbalance. This weaknesscould be attributed to lack of effective leadership. The hiring andpromotion of employees was concentrating more on the males ratherthan the females leading to the disparity. This lead to the legalimplications of discrimination against women, which cost the companylots of money in legal fees and compensation (Publix Super Markets,Inc. 2013).
Anotherweakness is the slow rate of growth when compared to its majorcompetitors. These competitors include Walmart, which is betterplaced financially, thus has the capability of opening several newstores at once. The lack of vigorous growth in certain geographicareas only gives the competitors an advantage of dominating these newgeographical markets. As a result, Publix Inc. lacks a place toexpand their business to thus leading to less expansion and profitsover time. On the other hand, the reduced growth rate in comparisonto the competition is attributable to the lack of adequate funds toopen new stores. It can also be attributed to poor planning oforganizational resources. For example, the purchase of land inOrlando to build a storage facility in 2010 which was not built until2014 due to lack of clear and concise plans is an indication ofweakness in decision making. The money could have been put into otherproductive means that yield revenue for the company and in so doingpromote its growth in a competing industry (Publix Super Markets,Inc. 2013).
Thehighest concentration of operations in Florida is another weakness ofPublix Supermarkets Inc. The company only commands a larger marketshare in Florida therefore concentration most of its operations inthe same area. This has led to a saturation of the company in thearea while leaving other areas unattended. As a result, the companydoes not discover new markets and the opportunities for expansion arelimited, therefore reducing the company’s nationwide growth anddiversification and limiting it to a single locality where thepopulation is low as compared to that of the whole nation. Theexistence in only 5 states is a weakness as others lack the goods andservices they offer. Finally, Publix has the weakness of dependenceon a single format. The company lacks a variety of designs in theirstores. Most of them have a similar design which is monotonous to thecustomers. The introduction of new better designs would attract somemore customers. This is however limited to the fact that Publix usesonly one design in most of their stores (Publix Super Markets, Inc.2013).
SectionII–External Opportunities and Threats
Thereexist some opportunities for Publix Supermarkets Inc. that if wellutilized can help it obtain maximum profits. These opportunitiesinclude the availability of new markets that Publix can penetrate andexpand its operations. Publix has the opportunity to expand to othermarkets in the US and abroad in other developing countries such asAsia, India and China. There is a huge potential for growth andrealization of better profits for these markets. The alreadyavailable markets can further be utilized through the inception ofbetter strategies and prices or through the introduction of new goodsand products. Additionally, another opportunity that Publix SuperMarkets Inc. can utilize is the diversification of merchandise. Bystocking a variety of products under the same roof in each store,customers enjoy convenience as they do not have to move to otherplaces to buy the rest that are not offered. These merchandises mayinclude beauty products, pharmaceuticals and general goods. Theseextra merchandises also generate important revenue that can be usedto grow the company (Publix Super Markets, Inc. 2013).
Thecompany can also increase its influence on the community they operatein. This can be done by offering a variety of community outreachprograms and benefits. As a result, the community gets to appreciatethe existence of the company as well as rebuild its tainted name bythe legal suits on discrimination against women. An example of suchan outreach program may include offering cooking classes to women andin so doing improve the company’s relations with the community.This in turn promotes customer loyalty since the community memberssupport and feel part of the company and as a result leading to thegrowth of the company (Publix Super Markets, Inc. 2013).
Thecompany faces various threats to its operations. The major one beingthe fierce competition from other grocery stores. These includecompetition from the leading grocery retailers Walmart, which enjoy alarger market share countrywide and better revenues and profits.Other competitor includes BI-LO, Sweet, Bay Supermarkets,Winnie-Dixie Inc. and the Kroger Company. The fast expansion rate ofWalmart coupled with their low price strategies reduces the number ofcustomers that visit Publix supermarkets Inc. This reduces therevenues and market shares of Publix thus acting as a threat to itsexpansion (Publix Super Markets, Inc. 2013).
Anotherthreat faced by Publix Supermarkets Inc. is the increase in laborwages. This is due the change in government policy increasing theminimum and other wages. As a result, the company will be forced topay the employees more than it was used to leading to an increase inoperating costs. As a result, this reduces the profits thus limitinggrowth. Finally, the final threat is the changing economic conditionin the USA. The economy of the country is deteriorating limiting thepurchasing power of customers and this could affect the companynegatively reducing its revenue and sales. This would prevent thegrowth and expansion of the company (Publix Super Markets, Inc.2013).
Porter’sFive Forces Analysis of Publix Supermarkets Inc
BargainingPower of Suppliers PublixSupermarkets Inc. needs various suppliers to provide them with rawmaterials to be used in the manufacturing of their products. Thecompany has therefore contracted various suppliers to provide themwith the much needed raw materials. However, the company is notdependent on one or few suppliers, but rather a wide range. This hasbeen advantageous in ensuring low prices of the various raw materialsmajorly due to the availability of many suppliers as the law ofdemand and supply go. This has lowered the threat of supplier bargainpower faced by Publix Supermarkets Inc. thus leading to better pricesof supplies (Publix Super Markets, Inc. 2013).
Therisk of Entry by Potential Competitors theentry of new companies in the grocery retail business is highlyrestricted by the industry. This is majorly due to the capitalbarriers since it requires a lot of capital to start, governmentregulations, lack of distribution channels, excess competition fromalready established companies and increased tariff rates. Thesebarriers prevent new companies from entering the grocery retailindustry and, therefore, protect Publix Supermarkets Inc. from thecompetition that the newcomers would have brought. As a result, theonly competition that Publix faces is that from the already existingmarket players (Publix Super Markets, Inc. 2013).
TheBargaining Power of Buyers thebuyers do not have the power to negotiate prices of goods andproducts in the stores. As a result, Publix supermarkets Inc. retainthe power to determine the prices of products in the stores. This hastherefore lowered the bargaining power of buyers of Publixsupermarkets Inc. products and as a result, leading to better andprofitable prices and protecting the company from losses that can beassociated with excessive bargaining by the customer. However, thecompany still puts in place incentives such as coupons, to motivatethe buyer to buy despite the low bargaining power they have (PublixSuper Markets, Inc. 2013).
Thethreat of Substitutes varioussubstitute products exist to those offered by Publix SupermarketsInc. These substitutes can be used instead of the products beingretailed in Publix stores thus leading to reduced sales and revenues.The threat of substitute products is, therefore, high. The substituteproducts include Walmart’s low priced goods which can drivecustomers to shift from Publix Supermarkets Inc. leading to areduction in sales, revenues and subsequently profits (Publix SuperMarkets, Inc. 2013).
Intensityof Rivalry among Competitive Firms thereare other companies that offer the same products at PublixSupermarkets Inc. do. This has led to fierce completion between suchfirms and Publix with each trying to adopt strategies to outdo theother. Walmart imposes the most intense of rivalry to Publix as it isthe leading grocery retailer thus making the level of rivalry inalready developed grocery companies very high. As a result of this,Publix focuses to maintain customer loyalty to avoid being run out ofthe market by these giants (Moskowitz et al, 2015)..
Micro-EnvironmentForces and the Importance of Each Factor
GlobalForcesPublixSupermarkets Inc. is affected by global forces such as deterioratingeconomy, resulting into to lack of reduced customer spending andpurchase. This has reduced the amount of sales and decreased therevenues realized. The existence of other global grocery retailersalso makes it hard for Publix to penetrate global markets (Moskowitzet al, 2015).
DemographicForcesPublixSupermarkets Inc. is affected by various demographic factors. Thesefactors include the location of its stores with most of them beinglocated in Florida. It also has stores in the other 5 states whichlead to its expansion of outer markets (Moskowitz et al, 2015).
Political& Legal ForcesPublixSupermarkets Inc. has had a good relation with various politicalparties, and also the political aspects of the country. Theorganization has distanced itself from active politics, while at thesame time establishing positive political relations with thecountry’s political arms. The company has a Political ActionCommittee that is responsible for maintaining good relations with thepolitical bigwigs. The committee pays funds to the political partieswith an estimated $2million given to political parties. It alsoprovides support to politicians who are interested in the groceryinvestments. The company also operates under the federal, state andlocal laws. An example is the government regulation to increase thewages which may affect the company’s operational costs. Any legaldisagreements are solved in court (Publix Super Markets, Inc. 2013).
TechnologicalForces and ChangesPublixSupermarkets Inc. applies information technology to pass crucialinformation to various stakeholders. The company has also used thisinformation system to connect the different departments, thusenhancing quick communication among the employees. Examples ofadvanced information systems used by Publix Inc. include the use ofpoint of sale payment systems, automation of pharmacy and automatedreplenishment (Moskowitz et al, 2015).
SocialForces Varioussocial trends affect Publix Supermarkets Inc. operations. Thesesocial forces include changing demands and preferences. The customerpurchase capabilities also change over time with holidays recordingincreased sales from Publix. The company should recognize thesechanges in social behavior and act quickly to suit the customer needsand prevent losing his/her loyalty. Moreover, Publix SupermarketsInc. also participates in various social activities aimed atimproving its community relations in areas where it operates in.These social activities include teaching the community members andpromoting environmental conservation through various programs such asusing reusable bags to package and reduce environmental pollution,and healthy eating programs (Volpe, 2013).
SectionIII: Evaluating the SWOT Analysis
Theanalysis of Publix Supermarkets Inc. places it in a strong positionfor growth and expansion if only it addresses the following. First,the company should grab the opportunities that exist for theexpansion. This includes measures such as opening of new stores inother geographic locations and more so on the developing markets. Inaddition, the management should also devise strategies to enable itto penetrate the already existing markets more (Moskowitz et al,2015). These strategies include lowering prices while keeping thequality of their goods up to standards. This helps counter the threatof competition, thus promoting customer loyalty and improving marketshare as well as profits. Finally, the company should design newmarketing strategies and train their employees to better serve thecustomers. Doing this would benefit the company and ensure itsgrowth.
CHAPTER5: SUMMARY, RECOMMENDATIONS, AND CONCLUSION
Thischapter offers conclusive information from my capstone research paperas well as my opinion and recommendations that should be implementedby the management towards the alleviation of the problem identifiedin the paper.
Themain focus of the research paper was to analyze and capability andsuccessful maintaining and/or improving Publix Supermarket globalperformance in comparison to its competitors, overcoming its mainchallenge, leadership, diversity, and internal planning. From theinformation obtained in the research paper, it’s clear that,despite the stiff competition in the market, Publix supermarket hasmanaged to overcome challenges such as the ones faced by itscompetitors Walmart. From the SWOT Analysis, it’s clear that oneof the supermarkets strengths has been its ability to satisfy itscustomers’ needs through effective customer care. The paperresearched the on the factors contributing to the successfulmaintaining and/or improving its global performance in comparison toits competitors, overcoming its main challenge, leadership,diversity, and internal planning. Despite the lack of externalexpansion, since the last new store was opened, the supermarket hasmaintained its excellent performance compred to other establishedretail stores. This research has demonstrated that the competition inthe market has been stiff however, Publix has maintained an upperhand in the marketplace and are operating successfully in theenvironment.
Accordingto the information obtained and presented in the research paper, themanagement should maximize the use of technology and new marketingstrategies such as social media to increase the contact between thebusiness and the customers. In addition, the company should embark onmaximizing its strengths as well as reducing the threats asidentified in the SWOT analysis. Moreover, the supermarket shouldembark on its cultural identity among its customers, as it has provedto be a success.
Businesscompetition brings along health business practices as businessorganizations work hard to meet customer demands. This in turn hasled to management and leadership of business entities embark onimproving their performance on the public front. With theincorporation of different aspects such as technology and socialmedia in the business management, Publix supermarket has in turnmaintained its internal performance at the highest level despite thestiff competition posed by its competitors.
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