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Dollar General

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 PrivateThreats

Wal-Mart, Target, Dollar Tree competition Increasing cost of merchandise

Problem/Decision StatementHow 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 interestHigh cost of advertising

Market Expansion Rural AreasProsExperience/relative easeLow competition from Wal-MartEstablished presence in similar areasLow cost

ConsSmall customer baseNo new customer baseHigh profits unlikely

Joint Venture with WalgreensPros253.6 billion dollar industryLeads industry- $39.5 billion in salesDiversifySustainabilitySupply Chain ManagementConsCostLegal feesImplementationTimeFocus

Money ServicesProsConvenienceAdded benefit for target market

ConsMinimal profitsOpportunity costs

PharmacyPros253.6 billion dollar industryIncrease customer baseSubstantial profits Added convenience to current market

ConsExpensiveLiabilityStrict Regulations

Change Retail Store FormatProsClose under-performing storesMore selling spaceCustomer perceptionConsPoor customer receptionRising pricesImplementation cost

Strategic Alliance with Wal-MartProsIncreased salesImproved location

ConsDifficult to maintain business relationshipDifferent company focuses

Horizontal IntegrationProsIncreased market shareConsPotential monopolyHigh costsExpected gains may not materialize

International Expansion in US Border CitiesProsBigger ReachNew MarketEVD widely accepted internationally

ConsRiskyCultural DifferencesHurt chances of success

Go PrivateProsFocus on long termGoals and ObjectivesSustainability

ConsCould hurt in short termLess Publicity

Expansion of Products Grocery SectionProsWider variety of customersCompete with Wal-Mart

ConsLose dollar store feelCostlyTime, effort, and money

Evaluating the AlternativesAlternativesOverallMarketCost (20%)Share (30%)Sustainability (50%)International Expansion in Canada2 (.4)3 (.9)3 (1.5)Go Private 4 (.8)2 (.6)4 (2)Introduce D.G. Presence into California2 (.4)4 (1.2)3 (1.5)Market Expansion - Small Rural Towns2 (.4)3 (.9)4 (2)Market Expansion - Urban areas2 (.4)3 (.9)3 (1.5)Change Retail Store Format2 (.4)4 (1.2)4 (2)Joint Venture with Walgreen's4 (.8)4 (1.2)3 (1.5)Strategic alliance with Wal-Mart4 (.8)4 (1.2)3 (1.5)Expansion of services - Money services3 (.6)2 (.6)2 (1)Expansion of services - Pharmacy2 (.4)3 (.9)2 (1)Expansion of Products3 (.6)3 (.9)3 (1.5)Horizontal Integration2 (.4)4 (1.2)3 (1.5)Using a Scale of 1 to 5.

Changing Retail Format

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