Strategic Assessment: Publixs Business Strategy

Table of Contents

Publix and the Competition
Internal and External Environment, SWOT Analysis
SWOT
Challenges, Risks, and Recommendations
References

Publix is a large grocery chain store, operating on an employee-owned basis. The brand does not operate outside of the US but has a considerable network of stores across the country. Tennessee, Georgia, Alabama, Florida, North Carolina, South Carolina, and Virginia all of these states contribute to Publix scope of influence (New store openings n.d.). According to the information presented on the company website, it is currently planning to focus on its existing range of influence, and open more store locations in the aforementioned states. Alabama, Florida, North Carolina and Georgia, in particular, are next in line for creating more stores (New store openings | Newsroom | About Publix | Publix super markets, n.d.). This strategy has been employed by the store throughout the past year, as well. In order to determine whether this approach to business has paid off, it is possible to consider the stock prices of Publix, and their fluctuation (Fig. 1).

Figure 1. Publix stock prices (Publix stock price | Historical chart and dividends | Publix, n.d.)

According to the graph present on the Publix website, the stock prices of the chain have been systematically rising. The chain was able to profit during the pandemic period and hold its share price relatively stable. Therefore, it can be asserted that the safe strategy of expanding deeper into states where the brand has already established itself is a successful public strategy.

Publix and the Competition

In order to better understand the position of the company on the market, it is useful to compare it to other organizations in the same niche. In the case of Publix, the stores chosen for comparison are Wegmans and Lidl, two other grocery store chains. Out of the three, Publix is the largest among its competition, and has more than twice the number of employees (Publix competitors and similar companies, n.d.). As such, the brand earns more revenue from its work than the competition and gains more notoriety. As such Publix occupies a more dominant position on the market. However, the competition has strengths that may be difficult for the company to overcome. Lidl, for example, is a foreign brand that deals in wholesale goods (Publix competitors and similar companies, n.d.). Customers may be more easily attracted to the curiosity of a foreign store and the savings brought by bulk purchases. In comparison, Publix is an expensive store chain, one that may be inaccessible to an average low-to-middle income family (Brown, 2022). As a result, the company faces difficulty standing against cheaper and more accessible brands, and garners criticism.

Internal and External Environment, SWOT Analysis

Internally, Publix is a company that has both positives and negatives. In a managerial aspect, it can be noted that Publix is majority owned by all of its employees making them essential stakeholders and decision-makers in the growth of the organization. This choice builds investment and creates teams of workers that are satisfied with their positions. In addition, it allows them to participate and feel supported throughout their employment. At the same time, however, the store chains upper management is predominantly white and male (Publix CEO and leadership: Executives and demographics, 2022). A lack of diversity in the organization does not allow it to be more flexible or capable of creating new value for the consumers. The highly concentrated voices at the top of the organization do not allow it to better align itself with local communities and people who may want to shop in the store.

Outside the organization itself, there are a number of factors that lead to the companys success. In particular, the pandemic has proved to be especially beneficial to the company. This is likely connected with peoples needs to buy groceries, and the availability of the online shopping option for the brand. In addition, healthy and more local alternatives to bigger grocery brands are becoming more popular with the passage of time, as consumers strive to make more health-conscious decisions. This trend propels Publix to the center of attention and provides it with more customers.

SWOT

The major strengths of the brand come from its solid grasp on its core markets, and the high pricing set for most products. This combination of factors allows Publix to reap high benefits from a specific collection of loyal customers. This approach saves the company from risk and provides reliable income. However, the tendency to rely on a stable customer base is also a part of its main problem. In particular, most products in Publix are fairly expensive, making it difficult to attract a new audience or expand in any way. Therefore, the company has difficulty gaining an advantage over its competition. There are a number of potential opportunities for the brand, including diversifying its selection of goods, attempting to expand outward other states, or even internationally. All of them would provide good opportunities of gaining revenue. In terms of threats, competition remains a primary issue, which makes a need to make changes and increase revenue more urgent.

Challenges, Risks, and Recommendations

As mentioned previously, Publix currently faces two major challenges overcoming competition and improving diversity. Both of these goals are necessary in order to remain stable in the business arena and follow in the footsteps of changes previously made within the organization. Expanding further or opening new locations in other states is risky, as Publix increasingly relies on customer loyalty for its revenue. It is recommended that the organization focuses on improving diversity as its first priority, as the influx of new voices may bring a change in perspective and approaches to doing business. In addition, it may be necessary to introduce more affordable options in order to appeal to a broader demographic.