Publix Original Case Study

Publix Original Case Study

Case objectives and Structure

The objective of this case is to effectively elevate Publix Super Markets, Inc. over their competitors. To accomplish that, Publix must sustain growth and profitability, regain consumer confidence, expand Publix private label products, lower prices, develop a more aggressive loyalty and rewards membership program, introduce Big Data Analysis, and Artificial Intelligence (AI) Web services. Combining the Big Data Analysis and AI with IBM’s cognitive, intuitive voice interactive personal shopper assistant, will take the company to new heights and set them well above the competition.

The Argument for and Against the Case

In this case study of Publix Super Markets, Inc (Publix); an employee-owned company headquartered in Lakeland, Florida, we will explore a viable theoretical argument to grow the company’s value proposition, sustain long term customer growth, and stakeholder profits while the company currently experiences a decline in market share.  A new wave of competitors challenge Publix for their customers, stakeholder value, and profits.

Publix faces its most existential crisis to date. Amazon has recently purchased Whole Foods and they are aggressively employing competitive tactics to push their brand center stage as they prepare to engage the market to win customers’ loyalty and gain as much market share as possible. Amazon’s Whole Foods is equipped with the financial backing, technological power, marketing strategy unseen by the competition since its inception. It is a disruptive time for the entire industry.

Each company’s tactical marketing team will have to employ its most sophisticated strategies in order to win over the customer’s ultimate purchasing decision and spend their supermarket dollars.

Amazon’s Whole Foods will be introducing personal shoppers, home delivery services, Big Data analysis, and AI web services together with Alexa’s personal voice interactive shopper assistance across the board. Most effectively, Whole Foods will be cutting prices and expanding their personal private label 365. Other competitors like Walmart and Fresh Market, will be challenging Publix for the market share. As stated by our, MKT 5290 Cases in Strategic Marketing Professor, “Where I live, Publix is also being hammered by The Fresh Market, Safeway, and Lucky’s Market. This means they are being attacked from top, bottom and sideways” (Bendixen, 2017).

Effective Aug. 1, 2017, Publix’s stock price decreased from $39.15 per share to $36.05 per share. Publix stock is not publicly traded and is made available for sale only to current Publix associates and members of its board of directors. The value of the Publix stock is set by an external financial consultant based on the level of performance of the peer group of other supermarket chains that are traded publicly. “This has been a tough quarter for supermarket companies in the stock market,” said Publix CEO & President Todd Jones. “We continue to be focused on growing sales and profits while providing premier customer service”. (Publix Supermarket Chain, Inc, 2017)

As e-commerce superpower Amazon postures to challenge Publix as their newest competitor, analysis of Whole Foods stock reveals their sales have peaked and profits have been dropping for the past year. Whole Foods or should we say a “whole paycheck” as it’s referred to in the marketplace much like its organic produce is beginning to rot on the shelves. Competition in the organic food market has pushed the supermarket companies including Publix and Whole Foods into a plummet which threaten the current marketing models a continual existence and present the opportunity for giant e-commerce companies like Amazon to enter the arena with thirteen billion in investments and a treasure trove of technological resources and take on Publix to win over the customer.

Publix, Sprouts, Walmart, Kroger and many other competitors are entering and ramping up their organic food market, lowering the prices, and introducing private branded labels. Whole Foods is challenged to regain the confidence and its consumers regarding the consumer affairs agencies charges against Whole Foods for overcharging its customers for their products. Amazon has set out to meet the challenge and prove there are continued growth and sustainable profits within the organic, private label, and fresh supermarket industry, as it did similarly with the retail industry and enjoys becoming the world giant leader today. Publix must keep its eye on Amazon’s Whole Foods and other emerging competitors and presents the perfect case study for this theoretical analysis and to further conduct a pragmatic contrast to present as a teaching model.

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