Académique Documents
Professionnel Documents
Culture Documents
T Analysis
Phillips Edison & Co. is the largest owner of grocery-anchored shopping centers in the
nation. They target vacant or failing shopping centers and focus on transforming it into a
successful grocery-anchored shopping experience for everyone. Our goal is to target the
Phillips Edison & Co. is a company that has been on the rise, with high success rates.
They have strong attributes that help them stand out and excel in a multitude of different areas.
Whether it is a culturally inclusive work environment, their strive for perfection, or their focus
on innovation, Phillips Edison is a force to be reckoned with. The components of their success
Phillips Edison is a company that is very adept in finding their niche in the market. They
mainly focus on properties they are sure they can attain within secondary and tertiary markets for
overall lower costs and higher profit margins. On the other hand, properties in primary markets
prove too costly for the company. In the major markets, competition has meant a meaningful
compression, says Jeffrey S. Edison, CEO of Phillips Edison & Company, in an interview. The
secondary markets have also seen compression, but it has not been as significant. We have to be
selective and disciplined in what we are looking for. Theres a voracious appetite for the top five
or top 10 markets in the country; that will be a difficult place for us to buy. From our
perspective, there will be more opportunities in less frothy markets. While they do invest in
tertiary areas, local grocers tend to have an overall advantage over Phillips Edison because they
know more about their customer base and their buying trends. While these properties are
profitable, Phillips Edison focuses their resources on acquiring spaces in secondary markets due
to higher success rates. Their success is largely due to how they strategically position themselves
in the market.
Every organization has an image in the market based on their goals and ethics. These
goals and ethics derive from their value of teamwork and experience represented by the
company's staff. They say a team is only as strong as its weakest link, which is the type of
thinking Phillips Edison incorporates into their work environment. Phillips Edisons company
culture focus on their employers and emphasizes a balanced work life. Emily Kendall, the
working parent and first time mom, the workplace supported her through the transition. We all
think of one another like family, and that translates into care and respect for our families outside
of work. The company does a great job of respecting our time with our kids, Kendall says. This
boils down to their leadership core of immensely experienced and inclusive professionals. With
an average of 23 years of real estate experience, Phillips Edisons senior management team has
managed to successfully run together for more than 10 years now, and this cohesiveness at the
top is what binds the company into what Phillips Edisons work culture is today for the rest of
the employees. Led by their Chief Executive Office and Chairman of their Board of Directors,
Jeffrey S. Edison has been serving PECO since 1995, along with Robert F. Myers (COO) and R.
Mark Addy (Executive Vice President), Phillips Edison now manages more than $1.7 billion of
together and doing what is right, in turn creating a culture of community engagement and
giving back to society. In an effort to promote this way of thinking they have created PECO
different causes they are passionate about. The organization hosts a quarterly company-wide
camaraderie while giving back to the community said Bob Myers, Chief Operating Officer.
Two of Phillips Edisons core values are think big, and act small along with do the right
thing. They take these two core values and implement them into their charitable projects.
PECO also hosts various charity activities proposed by employees to give back to causes
they are passionate about. This dedication to service and giving back to the community is one of
the many reasons Phillips Edison sees as much success as they do. It has created an employee
base that comes together to help others, bringing them closer to their community and to each
other. Not only is it fantastic for the company image they are trying to build, but it creates a bond
between employees and creates a team of philanthropic, socially conscious, good people.
Another unique part of PECO is the organization PECO NOW. PECO NOW is a program
that is designed to support and empower the women at Phillips Edison & Company. Within the
retail workforce, 48% of the it is composed of women but only 2% of the CEOs are women.
Phillips Edison realizes this and is trying to build awareness for women in the workforce. They
have many events that focus on PECOs mission including: networking events, quarterly
learning events, a golf scramble and scholarship opportunities. Phillips Edison wants women in
high leadership roles and will do what they can to ensure this happens
Phillips Edison is a unique company that truly masters the concept of investing for the
future. They built their company to have a high net worth and successful platform. For any
company to grow, they need monetary income. In order to obtain that, Phillips Edison needs
investors to help them fuel their business to obtain more capital for a larger growth. From the
start, Phillips Edison has depended on investors from a few private investment funds, as well as
high net-worth people. Over the years the number of investors grew, as well as they established
themselves in the retail channel. Therefore, they rely on retail investors along with institutional
investors such as TPG, Zurich, GIC and Northwestern mutual. The company knows how to
attract investors with their numbers, high net-worth, and their assets under management worth
around $6 billion, but that is only half the work. In order to continue getting investors, they need
to establish a secure relationship with each investor. Fortunately, Phillips and Edison have been
obtaining a loyal repeat investor base due to their reliability and follow through. The company
uses the CAR method, they have a need or context, they set out a plan or action and they have
promising result, which is all an investor wants, results. Phillips Edison does so by having a high
net worth, the promise of innovation, stability, growth, a diverse profile including over 280
shopping centers in 32 states and the consecutive creation of value. Therefore, investors feel
confident in coming back and placing their own money in Phillips Edison's hands, making this a
strength.
Although Phillips Edison & Company clearly displays strong qualities, there are a few
areas that the company could improve on. We have narrowed it down to three main concerns:
diversity, local competition, and inability to afford primary markets. Good companies can turn
into great companies by acknowledging their weaknesses and using them as foundations for
strengths. By addressing these concerns, Phillips Edison would be able to create a stronger
company.
One small area that could be improved on is diversity. There have been strides taken to
incorporate women into the business of real estate with the initiation of their PECO programs.
The PECO program for women allows women to gain leadership positions within Philips Edison,
and also create an environment where women feel they have the ability to excel and grow.
Despite these efforts, real estate is such a male dominated field and Phillips Edison struggles to
place women in higher ranking positions with more responsibilities in comparison to their male
counterpart. Phillips Edison currently has 36 senior managers on their team, and only 22% of
these management positions are filled by women. According to the US Department of Labor, in
2016, approximately 56.8% of the US labor force are women, yet only 25% hold executive, or
senior management positions. Sadly, even though Phillips Edison are trying to change these
percentages, the company still reflects an overall workforce that excludes women from receiving
leadership positions. Women are the primary shoppers for groceries, and Phillips Edison even
emphasized that when choosing which store to place in the lots chosen, they often think of what
would appeal to women. Since this is true, Phillips Edisons lackluster amount of women
inclusive to gender, there is still progress to be made in the field of cultural diversity. Cultural
diversity creates an atmosphere that encourages creativity and drives innovation, allowing a
company to be more competitive in the long run. Phillips Edison currently is functioning on a
national level with grocery store anchored locations all across the country. America has always
been a very diverse country with many cultures and subcultures within different regions of the
country. Without a culturally diverse team, Phillips Edison is lacking insight and perspective that
Phillips Edisons second primary weakness is its inability to compete in primary real
estate markets due to price concerns and their fear to take risks. The company currently owns the
majority of their properties in areas that are considered secondary real estate markets. Their
inability and unwillingness to expand into primary real estate markets can be seen as a weakness
due to the fact that primary real estate markets on average accumulate the most profit due to
large populations. The main concern that Phillips Edison has is the real estate pricing of property
in major cities. With an increase of consumers gained by moving into the primary market it
would more than likely make up for the price of the property, and bring in possible investors to
increase potential spending money. Although this pricing is high, it would also be beneficial for
the company to have a more diverse property portfolio. Currently Phillips Edisons property
when the economy falters, tertiary and secondary real estate values may be affected. Primary real
estate markets tend to keep their value even when the economy is bad. Because real estate is so
expensive in these major cities, Phillips Edison isnt able to afford property that could help them
expand into different areas with different markets. Reaching these markets is the gateway to
expanding the company nationwide to areas that havent been in controlled by the company in
the past.
Phillips Edisons third primary weakness is their inferior knowledge of the local
community that local competitors already have when moving into a new area or region.
Although Phillips Edison does their due diligence when looking into and purchasing the grocery
anchored lots that they specialize in, it was brought to light that often even when the company
does the necessary research, they fall short to local competitors that understand the climate of
that specific market better. More often than not, Philipps and Edison can compete with these
local companies on a financial level, but since they are still a relatively small company, they do
not have enough human resources to be able to scout out a location for long periods of time. This
is why local competitors have the edge. They are very knowledgeable about logistics of smalls
locations where Phillips Edison strives with having knowledge about broader regions. If they had
more information than local competitors than the company would face less risky investments and
overall strengthen the company. Overall, online spending and ordering of food, beverages and
other grocery products has reached $20 billion in 2017, and predicted to grow
Phillips Edison is a company that looks to grow and expand at every opportunity. While
their company is already growing profits significantly each year and dominate mostly all of their
competition, there is still always more room to develop. Two opportunities for Phillips Edison
would be to become a public corporation and expand into the global market. Taking their
company public and expanding into global markets both have extremely high potential to
Presently, Phillips Edison is a privately owned company, or in other words, the public
does not have the ability to invest in them through the stock market. Among the many
opportunities for Phillips Edison to grow and expand their company, one of the most prominent
and opportunities is taking their company public. Going public refers to a companys IPO, or
initial public offering. Once a company offers the stock of their company for the first time, they
become a publicly traded and owned entity. However, before the company begins selling shares,
they must first understand the processes necessary to reach this goal.
The process of going public takes about six to nine months. In this period of time, the
main focus of the company will be taken off the company's other objectives and directed toward
the work that needs to be done to go public. This work includes creating a relationship with an
investment bank and making decisions such as the number of shares they would like to offer and
the price they would like set for those shares. Doing this could put the companys growth and
production at a slowdown, but the goal is to gain enough money from investors to help grow the
Once opening their company for people to invest and buys stocks, there are many long-
term benefits. They could experience improved liquidity, have much better access to capital at a
lower cost, and would gain the ability to make more acquisitions, or acquire more real estate.
Looking even further into the future, having a public trading status would most likely lead to a
higher price once Phillips Edison is ready to offer the companys assets. Going public will allow
Phillips Edison to acquire more investors, who will provide capital for the company. If Phillips
Edison went public, they would have the opportunity to grow capital and expand the company as
a whole. In terms of expanding their company, Phillips Edison would be diversifying their
ownership and allow more people to see how big of a company they are and how fast they are
expanding.
In relation to diversifying the company, another major opportunity for Phillips Edison is
to expand globally. Going public could be the first step to making this happen. Increased capital
would allow them to explore taking their brand to other countries. The key to global expansion
would be choosing the right country to begin their expansion. Phillips Edison has expressed
Before deciding to expand globally, Phillips Edison would need to make sure that they
could take on the challenge. It is a long process for a business to cross over into other markets.
Phillips Edison would need to determine the current state of their business before taking it to
other markets. Since Phillips Edison currently has a really strong and stable base for their
company in the U.S. already, expanding into other markets would be a smart next step for their
company. With that being said, Phillips Edison should first make sure that going into other
countries wouldnt cause problems with their business in the American market, since that is the
currently primary focus. If it would take too much time and resources away from the operation in
Another extremely important aspect would be for the Phillips Edison to gain extensive
knowledge about the countrys culture. Understanding the culture of the country would allow
Phillips Edison to see what would work best for their brand in that market. These findings would
require significant amounts of research. For example, the leading retailer in food and pharmacy
in Canada is Loblaw Companies Limited. Phillips Edison would potentially want to analyze
Loblaw for the focus of their shopping centers if they were to pursue Canada. Being introduced
to these new cultures could potentially help the current centers they have in America. Knowing
other customs and cultures could help bring in new, innovative ideas into their American market
as well. This could bring in new customers to their centers and generate more revenue for the
company.
After taking all of these steps and processes into account and with proper execution,
Phillips Edison would be able to experience all of the benefits of global expansion. Phillips
Edison would be able to expand the life of their product by selling them in new markets. For
example, a popular trend in the grocery industry in the United States is the fresh format grocery
stores. Americans are currently very interested in fresh and natural produce, and that is a trend
that Phillips Edison could expand into the markets of other countries. Another huge factor for
Phillips Edison is the condition of the real estate market. If they were to expand globally, when
the real estate market is struggling in one country, it could be thriving in another. Phillips Edison
would not have to be dependent one just one market to make or break their company. When one
market is declining, the other will help keep the company afloat, even profiting. Finally, being a
global company would give Phillips Edison much more knowledge of the global marketplace,
Phillips Edison & Company is undoubtedly a super power of the real estate industry in
the United States, owning well over 300 store locations across the country. Not only do they own
a huge amount of property, but each property is thriving. Very often you will see packed
locations with large amounts of traffic. Even though PECO is one the largest companies in their
area of operation, they still encounter other competitors that can give them a run for their money
and challenge them. The companies that give them the most difficulty are local real estate
businesses. The main advantage they have over PECO is they have many local connections such
as architects and construction agencies that could not only allow them to get to work faster, but
also spend less money. A local company will be more likely to discover the opening of some
profitable land much before a larger firm such as PECO. This allows the smaller local companies
to invest earlier and acquire the land before PECO even knew it existed. Phillips Edison &
Company do try to use local resources as much as possible. Even though this is a great way to
build local support of their store, they simply dont have the same knowledge of certain areas as
the locals. This advantage can be seen through PECO itself. When the company first began to
expand, locations were close to the headquarters in Cincinnati, Ohio. Creating that personal bond
with a community is extremely important, especially when change is occurring. For that reason,
local real estate agencies are a threat to Phillips Edison & Company.
As online technology advances, the thought of online grocery shopping has become a
reality. In fact, there are speculations that sometime in the future grocery store chains will
die out. Newcomers in the online grocery shopping world are the type of shoppers who are
straying from the traditional way of purchasing groceries, but are still in the minority of grocery
shoppers. The majority might argue the fact that going to buy groceries is better because this
method is what they have always done and are comfortable with. On the other hand, online
grocery shopping can save consumers time and money. In fact, online grocery shoppers
experience the same sale prices as in-store shoppers and they have access to online-only
discounts. Online shopping makes buying in bulk a whole lot easier. Finally, an individual can
easily shop for a week of groceries without ever having to leave the comfort of their own home.
Simply add the products you want into your online shopping cart and your groceries will be
delivered right to your door. Online shopping can save you time as well. For example, you dont
have to cut out a large chunk of time in your day to go to the grocery store anymore. Instead,
online grocery shopping is an option at all hours of the day. Another big factor is not having to
wait in line and if you forget to add something to your cart, you have time to add items before
your groceries are delivered. Online grocery shopping can be seen as a potential threat because it
is convenient, is offered 24/7, quality is still a factor, no social interaction is needed, and good
One big internal threat for PECO is the extreme desire for growth the company possesses.
Although aggressive growth might not always be seen as a threat to a company, it should be
considered. The biggest issue with expanding a real estate company rapidly is the quick thinking
the company would put into effect when considering purchasing a lot of land or a current
location. Companies who attempt to grow too large too quickly can often take more risks than a
company that is slow growing would. Because of this extreme ambition, PECO could potentially
come across a dud of a location that they believe they can fix and make thrive. Large sums of
money would be required to turn the quickly acquired location into a thriving one. Some
expenses the company would face are above average repair costs and more marketing and
promoting expenses. By wanting to grow so aggressively, the purchase of a new location can be
rushed and many negatives can be overlooked. Overlooking these problems will come back and
punish the company for being so aggressive with their growth. These problems could be poor
location choice, weak facilities, and other issues with the land. These problems will lead to a
decrease in the traffic of the location and a dip in sales, showing the location to be non-profitable
for the company. In conclusion, rapid expansion isnt always the best choice for a company,
Recession in the grocery store industry has seemed unlikely in recent years, which is
great news for Phillips Edison. However, since they are such a large owner of grocery oriented
real estate countries across the country, this could be a serious threat to the company. Many
believe that grocery chains could die out due to online and other new ways of shopping. Because
of this, it is important that PECO find new locations and ways to get the most customers into
these properties and stores. Choosing the right stores to put in their properties and how that store
or franchise is performing economically should also be a main focus. Ultimately, if the stores are
not bringing people in, PECO is not going to do well at that location either. This is why it is
crucial to choose quality stores, especially since the company has a strong desire for growth.
With new technology and online shopping decreasing in-store sales, PECO could consider
looking at all stores and see what is growing economically which would allow them to expand
outside of the grocery business. However, with growth and prime real estate locations comes
high property taxes for those premier locations. Finding locations with steady property and real
estate taxes will decrease the risk of those fluctuating and will not affect the company as much.
Suggestions
Rapid expansion was identified by Mark Addy as one of the challenges his company
faced and learned from in the early part of this decade. He showed us a chart that depicted 2010
being one of the years where Phillips Edison decided to expand too quickly, resulting in the loss
of 28 properties in one year. The company has since learned its lesson from this expansion, but
in todays strong real estate market, we would suggest revisiting the criteria of each property and
the value and strength it offers to the portfolio. This would help avoid any rapid expansion.
Some properties currently owned in strong markets might be ones to consider selling in
todays market. As part of their expansion, they could sell property in stronger markets and use
those proceeds to buy property in other markets that arent as hot, but have strong value that
meets the criteria to be added to their portfolio of properties. We also suggest looking at
different industries and their real estate needs - for example, buying major online retailer
distribution centers.
One Stop online grocery store pickup services are growing at a rapid rate. Currently
many Grocery store companies are implementing the service across some or all locations. Some
of the larger companies include Kroger, Target, Walmart, etc. It is recommended that Phillips
Edison & Company strongly emphasizes that the stores they select to fill their lots have some
form of online grocery pickup service accessible to customers. Overall, online spending and
ordering of food, beverages and other grocery products has reached $20 billion in 2017, and is
predicted to reach $66 billion in the next five years according to the U.S commerce department.
This service can be seen as extremely profitable. With the service offered in Phillips Edison
grocery anchored shopping centers, its target market will not be limited to Millennials who
currently dominate the online shopping market, but also to busy parents alike. If Phillips Edison
does not begin to emphasize this, they may see some of the grocery stores that sit in their centers
lose business to competitors such as Amazon. Amazon offers services such as Dash Buttons,
which is a device they sell for $4.99 and it allows you to reorder things such as paper towels,
laundry detergent, and flavored drinks. These are products you previously had to go to a grocery
store to buy, but now can purchase at the touch of a button. This takes out the need for multiple
aisles in a traditional grocery store. Amazon has also begun to build AmazonFresh Pickup
stores. AmazonFresh is a service where you can order your groceries on Amazon and select a
time to pick them up. This service threatens everything from meats, to produce, to frozen goods
in a traditional grocery store. Previously Phillips Edison had less to worry about when only
smaller companies offered services that compete with the traditional grocery store model, but
when a massive titan such as Amazon steps into the scene, the more Phillips Edison should focus
on ways to fight back. Since this concept is relatively new for the mass market, Phillips Edison
may not see declining numbers in the next 5 years, but as time progresses, they will notice an
effect. That is why it is strongly recommended that Phillips Edison takes steps to prevent this.
As mentioned in the previously in the the SWOT analysis, one major weakness of Phillips
Edison is their lack of diversity throughout the company. Although Phillips Edison has taken a
step towards diversifying their company through the PECO program, which provides
opportunities for women to rise in status through the company as well as the business of real
estate, they still have a lot of work to do with this aspect of their company. The company
continues to lack in diversity of ethnicity and cultural backgrounds. Considering all of this,
Phillips Edison should strongly consider diversifying their company, and they can do this in a
multitude of ways.
As mentioned in the previously in the the SWOT analysis, one major weakness of
Phillips Edison is their lack of diversity throughout the company. Although Phillips Edison has
taken a step towards diversifying their company through the PECO program, which provides
opportunities for women to rise in status through the company as well as the business of real
estate, they still have a lot of work to do with this aspect of their company. The company
continues to lack in diversity of ethnicity and cultural backgrounds. Considering all of this,
Phillips Edison should strongly consider diversifying their company, and they can do this in a
multitude of ways.
One step Phillips Edison can take to achieve this goal is by simply reaching out to local
institutions. By becoming involved with their local community, Phillips Edison can build many
connections that will provide them with the diversity they are looking for. On a wider scale,
Phillips Edison can become much more involved in non profit organizations such as the National
Diversity Council, the Urban League, or any other organization they feel best represents the
morals and principals of their company. Another great source that Phillips Edison can utilize is a
website called diversityworking.com. Through this web source, Phillips Edison get in contact
Another idea that Phillips Edison should consider incorporating is more developing more
diversity organizations within their company. Considering the success they have had with their
PECO program, Phillips Edison could largely benefit from adding other organizations that focus
on diversity. Similarly, another suggestion for Phillips Edison is to provide diversity training in
their workplace. All employees should have a good understanding of other cultures and
ethnicities. They should also learn to appreciate all of the benefits of having a diverse workplace.
Working to make Phillips Edison a more diverse company will provide many advantages
for the company. Employees from diverse backgrounds can offer many different talents and have
skills and experiences that others do not have. These different skills and experiences will in turn
lead to innovation within the company. Furthermore, embracing diversity will draw a wider
talent pool. Finally, having a more diverse company will draw many more connections for
Bishop, Todd, and Nat Levy. Amazon Finally Unveils Grocery Pickup Service - but Its
www.geekwire.com/2017/amazon-finally-unveils-grocery-pick-service-seattle-
employees-first/.
Chavez, Jon. Grocery Delivery Options Growing Rapidly. The Blade, Toledo Blade, 19 Aug.
2017, www.toledoblade.com/Retail/2017/08/20/Grocery-delivery-options-growing-
rapidly.html.
Corley, Judith Warner and Danielle. The Women's Leadership Gap. Center for American
www.americanprogress.org/issues/women/reports/2017/05/21/432758/womens-
leadership-gap/.
Davies, Malcolm. A Game of Risk. A Game of Risk | CCIM Institute, CCIM Institute,
www.ccim.com/cire-magazine/articles/287317/2013/03/game-risk/?gmSsoPc=1.
DeWolf, Mark. 12 Stats About Working Women. 12 Stats About Working Women | U.S.
blog.dol.gov/2017/03/01/12-stats-about-working-women.
How to Increase Workplace Diversity. The Wall Street Journal, Dow Jones & Company,
guides.wsj.com/management/building-a-workplace-culture/how-to-increase-workplace-
diversity/.
Property Search. Phillips Edison & Company, Phillips Edison & Company,
www.phillipsedison.com/about/our-team.