Date post: | 13-Feb-2017 |
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Dollar GeneralJacob BabcockBrian FielderMatt HaskampKirk Howard Mike Russell
http://www.youtube.com/watch?v=O2R5eBVFX1s&feature=related
Dollar General Commercial
Situation AnalysisDollar Store Concept – Woolworth Five and Dime – StrengthDollar General – 1939 – Turner familyWholesale to retail1955- KentuckyStrong Mission Oriented Culture –
Family8,260 stores in 35 states1990s – Expanded its product mix
Situation AnalysisMajority of prices- $10 or less30% - $1 or lessAverage store- excess of 1 million
dollarsMission – Serving the customerMiddle to lower class consumerCompetes – convenience and
priceExample – 20 mins. compared to
50 mins.
SWOT AnalysisStrengths
• Focused Mission Statement
• Strong Niche Market• Economic Conditions
strengthen industry
Weaknesses
• Limited Brand Categories• Supply Chain
Management• No international presence• No West Coast presence
Opportunities
• Potential for new store locations (domestic and
international)• Growth with similar
industries (joint venture)• Urban Market• Going Private
Threats
• Wal-Mart, Target, Dollar Tree – competition
• Increasing cost of merchandise
Problem/Decision Statement
How can Dollar General effectively and efficiently focus their growth?
Alternative Solutions
AlternativesIntroduce Dollar General presence
in CaliforniaMarket expansion – Urban AreasMarket expansion – Small, rural
townsJoint venture with WalgreensIncrease services offered- Money
servicesIncrease services offered- Pharmacy
AlternativesChange Retail Store FormatDevelop a Strategic Alliance with Wal-MartHorizontal IntegrationInternational Expansion into
Canada – US Border CitiesGo privateExpansion of products
Discussion Time
Do you see any similarities/differences between our solutions and yours?
Analysis of Alternatives
Introduce Dollar General Presence in CaliforniaProsLarge marketCurrently no
major extreme-value presence
ConsCostPossible
RejectionAdvertising
Market Expansion – Urban AreasProsNew customer
baseHigh consumer
traffic
ConsHigh ExpensePotential low
customers interest
High cost of advertising
Market Expansion – Rural AreasProsExperience/
relative easeLow competition
from Wal-MartEstablished
presence in similar areas
Low cost
ConsSmall customer
baseNo new
customer baseHigh profits
unlikely
Joint Venture with WalgreensPros253.6 billion
dollar industry◦ Leads industry-
$39.5 billion in sales
DiversifySustainabilitySupply Chain
Management
ConsCost
◦ Legal feesImplementation
◦ TimeFocus
Money ServicesProsConvenienceAdded benefit for
target market
ConsMinimal profitsOpportunity
costs
PharmacyPros253.6 billion
dollar industry◦ Increase customer
base◦ Substantial profits
Added convenience to current market
ConsExpensiveLiabilityStrict
Regulations
Change Retail Store FormatProsClose under-
performing stores
More selling space
Customer perception
ConsPoor customer
receptionRising pricesImplementation
cost
Strategic Alliance with Wal-MartProsIncreased salesImproved
location
ConsDifficult to
maintain business relationship
Different company focuses
Horizontal IntegrationProsIncreased market
share
ConsPotential
monopolyHigh costsExpected gains
may not materialize
International Expansion in US – Border CitiesProsBigger ReachNew MarketEVD widely
accepted internationally
ConsRiskyCultural
Differences◦ Hurt chances of
success
Go PrivateProsFocus on long
termGoals and
Objectives◦ Sustainability
ConsCould hurt in
short termLess Publicity
Expansion of Products – Grocery SectionProsWider variety of
customersCompete with Wal-Mart
ConsLose dollar store
feelCostly
◦ Time, effort, and money
Evaluating the AlternativesAlternatives Overall Market
Cost (20%) Share (30%) Sustainability (50%)International Expansion in Canada 2 (.4) 3 (.9) 3 (1.5) Go Private 4 (.8) 2 (.6) 4 (2) Introduce D.G. Presence into California 2 (.4) 4 (1.2) 3 (1.5) Market Expansion - Small Rural Towns 2 (.4) 3 (.9) 4 (2) Market Expansion - Urban areas 2 (.4) 3 (.9) 3 (1.5) Change Retail Store Format 2 (.4) 4 (1.2) 4 (2) Joint Venture with Walgreen's 4 (.8) 4 (1.2) 3 (1.5) Strategic alliance with Wal-Mart 4 (.8) 4 (1.2) 3 (1.5) Expansion of services - Money services 3 (.6) 2 (.6) 2 (1) Expansion of services - Pharmacy 2 (.4) 3 (.9) 2 (1) Expansion of Products 3 (.6) 3 (.9) 3 (1.5)
Horizontal Integration 2 (.4) 4 (1.2) 3 (1.5)
Using a Scale of 1 to 5.
Changing Retail Format
Questions?