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?