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Publix Super Markets: The Five Forces Model Of Competition

1358 words - 5 pages

Publix Super Markets Inc
Super Markets are few and far between in the south. There are plenty of different variations within a very small region that when one becomes your favorite it’s usually because if convenience. However throughout the local community of Jacksonville and most of Florida, Publix Super Markets have made a very valuable impression on its current consumers. Founded by George W. Jenkins on the idea of what makes a company successful is how they takes care of their customers but also their employees. Publix being one of the top eight privately traded companies in this industry as labeled by Forbes America’s Largest Private Companies List leaves those asking what makes Publix so different.
Publix Super Markets have a fast developing and quickly motivated group of competitors. This allows for the market to have interesting trends and advances rapidly. According to the Food Marketing Institute’s website, in the year 2012 there were thirty-seven thousand and fifty-three companies in this trade which puts Publix very high on shopper’s lists. Being employee owned is one of the characteristics current workers contribute to the firm’s success. Focusing on the well-being and progress of their team members has given them a sought after job pool.
The framework that will compare Publix Super Markets and its competitors is the Five Forces Model of Competition. The five aspects that will be discussed are the threat of new entrants into the market, the bargaining power of suppliers and buyers, threat of substitute products and rivalry among competing firms. Striving for the optimal position in each of these categories has given Publix Super Markets the reputation it has pride towards earning. It is important to every company to keep a balance between these five forces in order to obtain a healthy growing business.
The threat of new entrants into this industry has grown throughout the years. New technological developments have given way to self-check-out options which allow the market standards to be lowered. This in turn created an easier entry into the market. Publix Super Markets however have placed their foot print in this area with the amount of time they have been present. With consumers making a trip to the grocery store 1.7 times per week the industry will have many opportunities to try a business plan. Switching costs however remain low due to the other companies providing the same overall products. Publix has developed their own brand that sells for lower than the name brand. This creates a demand for that type of supplemental shopping that generates repeat customers.
Secondly the bargaining power of both the suppliers and the buyers within this market remains consistent due to the fact that the products being demanded are very general across the boards. Each company involved in this market demand the same products but the amount of power lies in how much is demanded. The company that has the highest market share will...

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