Individual Learning Project 2 for BUSI 601

Individual Learning Project 2 for BUSI 601 - 1 Running...

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1 Running Head: PUBLIX CMT Contemporary Management Technique for Publix Darren Nussel Liberty University
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Publix CMT 2 Target Costing Rationale Publix Super Markets, Inc. is a primarily Florida established grocery store chain which employees over 120,000. Currently, Publix serves over one million customers each day and is also one of the largest employee-owned businesses in the world. Moreover, the company is one of Florida’s leading supermarkets and has tailored to most cultural trends in the grocery industry- organic foods; health foods, natural foods, prepared meals, ethnic ingredients, etc. Publix grocery has benefited from great success in the industry and has expanded out of primary market, Florida. However, with the arrival of globalization impacting margins in almost every industry, the food retailing/supermarket industry has now joined the trend. International and domestic food retailers around the globe have started to internationalize at a brisk rate and open operations around the globe (Mujtaba & Franklin, 2007). The right product pricing is one of the most important matters concerning the growth of companies’ financial performance. Prices should be low enough to draw in customers; however, simultaneously high enough to cover all costs and anticipated profits. Research in the supermarket industry indicates that nine percent of customers leave and shop elsewhere because they think prices are too high. The supermarket business is becoming more and more concentrated as large regional chains such as Kroger, Safeway, Wal-Mart, and Albertson‘s dominate their markets. Publix‘s present strategy is to progressively grow from within and enlarge the Publix culture throughout the stores across different states domestically. If Publix chooses not to go international, they need to be fully equipped to compete with international firms that are planning to attack their market in the upcoming decades. One must contemplate on a strategy for Publix to compete with global
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Publix CMT 3 competitors trying to invade the company’s market. Publix should prepare to protect its terrain from foreign retailers that will be contending with them in the United States (Mujtaba & Franklin, 2007). In an extremely competitive industry, such as food retailing, where even minor price changes attract customers, target costing may strengthen Publix competitive force and expand market share. Determining the price is one of the most crucial and complicated strategic decisions in companies because it normally affects market shares, overall profitability, and the sales volume of companies (Helms, Ettkin, Baxter, & Gordon, 2005). Market shares and sales volumes are universal important business dynamics. Profitability is vital because it allows companies to survive, i.e. to guarantee jobs, payment of dividends, and invest. Consequently, the sales price must be high enough to produce a needed profit over the costs to satisfy stakeholders, yet low enough to offer potential customers a sufficient reason and benefit to buy (Helms,
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This note was uploaded on 01/21/2011 for the course MKG 2300 taught by Professor Perez during the Spring '10 term at University of South Florida - Tampa.

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Individual Learning Project 2 for BUSI 601 - 1 Running...

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