Publix Super Markets Macro Environment and Market Factors

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Table of Contents

Introduction
Society/sub-cultural factors
Demographics
Economic factors
The natural/physical environment
Political/legal factors
Technological factors
Market factors
Conclusion and recommendation
References

Introduction

Publix Super Markets macro-environment includes external and market factors in the domestic and global marketplace and market space that affect business operations and services delivery to customers.

Considering the industry of Publix Super Markets industry, the macro-environment factors that affect its operation include societal factors such as the subculture, demographic factors, economic factors, the natural or physical environment, political/legal and technological factors.

On the other hand, market factors include collaboration, competition, suppliers and regulation. The current study focuses on the macro environment and market factors and their implications on Publix.

Society/sub-cultural factors

The Publix Supermarket operates in an environment with customers of different cultural backgrounds and subcultures. Varying market highlights the need to consider subcultural factors in the placement of products, brand selection and service to customers.

With approximately one million people served by the company on a daily basis, the people belong to organizations, groups, subcultures and communities that influence their shopping. Operating mainly in the United States, especially in Florida, Tennessee, Atlanta and South Carolina, and the global market, the people come from subcultures that have different choices and levels of convenience.

Different choice and preferences mean Publix must conduct adequate research to understand different market preferences. Especially on the aspect of eating, the preferences among people vary significantly.

In the current age of information technology and enhanced communication, customers are growingly informed about products, their quality and health, which have implications on decision making at Publix. Customers often check product labelling to see nutritional information, which compels the supermarkets to increase product labelling and level of nutrition (Weinstein, 2004).

Demographics

Demographic factors such as the population, household patterns, age distribution, levels of income and employment status affect customers shopping in the supermarkets. Some places have a large student population and people in employment, which highlights the need for ready to eat foods.

With operation in places where most people are in employment, it means people have enough cash to spend, which requires the company to focus more on product quality and effective customer service. Demographic factors change constantly with implications for Publix, which must move at the pace of change to remain relevant in the markets and improve profitability (Weinstein, 2004).

The people want to feel and identify with the company and to this effect, Publix should engage in community development activities. People involvement resulted in the company’s involvement in community support initiatives such as reusable bags and product sourcing, among other things (Weinstein, 2004).

Economic factors

Trends in the global and domestic markets have major implications on Publix’s operations. Economic factors such as the high rate of unemployment, declining conditions in the market and downsizing among others affect Publix’s business. This relates mainly to the customers’ purchase and spending decision making, as they have to balance between competing priorities.

Furthermore, the company operates in an environment with high fuel prices, high tax and interest rates, which have implications on the spending power of consumers and consequently the supermarket revenue. Indeed, low spending power of customers affects the business negatively as the level of profitability goes down and limited funds available for improvement (USSEC, 2010).

To realize profitability, grow revenue and remain competitive in the industry, Publix must manage the economic factors properly. As seen in previous performances characterized by increased earnings over the years, it means the company is on the right track in managing economic factors (USSEC, 2010).

The natural/physical environment

Publix Super Markets operate in a demanding market place with advocating for environmental sustainability. Sustainability requires the company to operate according to environmental regulations, support and participate in activities aimed at improving the environment and maintaining safety standards. Above everything, efficiency of resource is important, especially the use of water, energy and fuel.

Company buildings should focus on reducing consumption and improving efficiency. For new buildings and facilities, efficiency should be a major consideration in the design process. To reduce water usage and improve water efficiency, Publix maintains the highest hygiene and health standards.

Efficiency also requires the adoption of hybrid vehicles in the supply chain to minimize fuel usage. Similarly, environmental sustainability means the company employs and continues to research on alternatives for reducing, recycling and reusing materials (Publix, 2011).

Political/legal factors

The political aspect has major implication on the company operations. Political factors imply Publix should support politicians and political parties for business gain. With the influence of politicians, especially those in Congress in developing various industries, the company must support the ones who have interests in or support the grocery industry.

Support for politics has been seen with the contribution of funds to support election bids for candidates across the political divide, especially in the local House (Hamstra, 2008). Contributions to support politicians and political parties often come from the company, its employees, political action committee and employees’ families because of the common objectives.

Politics relates to legal factors, as politicians develop laws and regulations at the federal, state and local levels of governance, which have implications on Publix operations (Weinstein, 2004). It requires the company to continue complying with legal requirements to avoid legal proceedings.

Technological factors

With technological advancements and information technology, Publix operates in an environment that demands for process efficiency. Efficient operations require the company to adopt information technology in all business functions. Connection of business units is important in enhancing information sharing to improve processes and understand the market better.

Consequently, investment in new technology is necessary to leverage on the latest platforms and expand company architecture. The company has different functions powered by IT, such as stock replenishment, assortment planning and workforce management, among others (Publix, 2011).

Market factors

Market factors such as collaboration, competition, suppliers and regulation have implications on Public performance. The implications are because the market factors contribute to the development of strategies and new approaches of achieving sustainable growth. Collaboration requires Publix to work with manufacturers and suppliers to enhance future business development through innovative growth tactics.

With collaboration, Publix and manufacturers work on the most effective approaches of meeting the changing market trends and consumer preferences. Meeting demands are possible through common tactics to loyalty programs, supply chain management, innovation, in-store execution, as well as sales promotion among other approaches.

Collaboration contributes to a better understanding of new technological, merchandising, demographic and marketing trends in the retailing and manufacturing industries.

Collaboration is an important aspect in problem-solving and building relationships among stakeholders for sustainable growth. Collaboration presents unique opportunities and interactive platform to obtain an understanding, tactics and tools for best practice as a recipe for business growth (Weinstein, 2004).

Competition and industry regulation are major factors affecting the industry and Publix operations. Competition is intense in the industry as major companies such as K-Mart, Wal-Mart and Sears operate in the same market with significant potential to challenge Publix.

Intense competition highlights the need for enhancing customer loyalty through competitive pricing, product and service quality. Failure to achieve customer satisfaction and retention may result in switching to competitors, which has detrimental implications on Publix (Weinstein, 2004). With the high level of competition in the industry, there are strict industry regulation.

Regulation in the industry is mainly in areas of food standards, environment and legal requirements. Food safety is a major factor, as the company must comply with food safety standards or face product recall from the market (Weinstein, 2004). The environment is critical and all process must comply with sustainability provisions.

Above all the federal, state and local governments develop strict policies and lays aimed at regulating the industry. Regulations in the industry affect stakeholder throughout the value chain with the focus on effective relationships and delivering value to customers through certainty, fairness and transparency between stakeholders. Strict regulations mean the company must ensure process effectiveness and compliance.

The market factors of regulation, competition, suppliers and collaboration influence the consumer’s experience. Exceptional customer experience is the ultimate goal of business. Market factors enhance stakeholders’ engagement, information sharing, identification of new technologies and growth opportunities, and improve business functions in the company (Weinstein, 2004).

Conclusion and recommendation

Publix Supermarkets Inc. is a major player in the grocery and retailing industry with the macro environment and market factors having significant implications on its business operations. The current study examined various macro-environmental factors such as social, demographic, economic, technological, political, legal, and environmental factors that affect the company.

It also discussed market factors such as collaboration, competition, suppliers and regulatory influence on Publix. Overall these factors play a role in developing and implementing strategies for sustainable growth in the marketplace.

References

Publix (2011). Corporate Sustainability Statements. Web.

USSEC, (2010). Publix Corporation, Form 10-k. Web.

Weinstein, A. (2004). Superior Customer Value in the New Economy: Concepts and Cases. Boca Raton, FL: CRC Press.

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