Dollar General Industry Analysis
MEMORANDUM
To:
From:
Date:
Re: Dollar General Industry Analysis Executive Summary: Dollar General is the sixth largest mass merchandiser, and the fourth largest discount store in the U.S. However, significant growth opportunities remain for extreme-value retailers such as Dollar General. Dollar General’s strategic objective is sustainable and profitable long-term growth. The company has opportunities for growth by expanding in the United States to areas that lack an extreme-value retail presence. Continuing to serve low-, middle-, and fixed-income families in small communities will prevent Dollar General from competing directly against mass retailers such as Wal-Mart and Target. Dollar General’s strength has been their ability to remain small, convenient, and cost-efficient; they should continue to do so. Consolidating the fragmented industry via acquisition will increase economies of scale in an industry where low-costs are critical.
Dollar General’s strategic objective is sustainable and profitable long-term growth. The extreme-value retail industry includes companies such as Dollar General, Family Dollar, Fred’s, and 99 Cents Only. The industry is fragmented outside the two largest firms, Dollar General and Family Dollar. An analysis of the industry shows that the highest threats are rivalry of existing competitors and customer buying power. These threats are due to the industry being highly price competitive and selling of undifferentiated products. In addition, the target market is low to middle income families who are price sensitive. The critical success factors are achieving a low-cost business model, economies of scale, merchandising, convenience, and effective customer service. The internal analysis of Dollar General shows that the company relies on serving a focused assortment of branded and generic goods to low-, middle-, and fixed-income families
To:
From:
Date:
Re: Dollar General Industry Analysis Executive Summary: Dollar General is the sixth largest mass merchandiser, and the fourth largest discount store in the U.S. However, significant growth opportunities remain for extreme-value retailers such as Dollar General. Dollar General’s strategic objective is sustainable and profitable long-term growth. The company has opportunities for growth by expanding in the United States to areas that lack an extreme-value retail presence. Continuing to serve low-, middle-, and fixed-income families in small communities will prevent Dollar General from competing directly against mass retailers such as Wal-Mart and Target. Dollar General’s strength has been their ability to remain small, convenient, and cost-efficient; they should continue to do so. Consolidating the fragmented industry via acquisition will increase economies of scale in an industry where low-costs are critical.
Dollar General’s strategic objective is sustainable and profitable long-term growth. The extreme-value retail industry includes companies such as Dollar General, Family Dollar, Fred’s, and 99 Cents Only. The industry is fragmented outside the two largest firms, Dollar General and Family Dollar. An analysis of the industry shows that the highest threats are rivalry of existing competitors and customer buying power. These threats are due to the industry being highly price competitive and selling of undifferentiated products. In addition, the target market is low to middle income families who are price sensitive. The critical success factors are achieving a low-cost business model, economies of scale, merchandising, convenience, and effective customer service. The internal analysis of Dollar General shows that the company relies on serving a focused assortment of branded and generic goods to low-, middle-, and fixed-income families